South32 Limited

I would now like to hand the conference over to Mr. Graham Kerr, Chief Executive Officer. Please go ahead.

Thank you. Good morning, everyone, and thanks for joining us today. On the call with me is our Chief Financial Officer, Sandy Subbanala, and our Chief Operating Officers, Vanessa Torres and Noel Pallay. Before I give a summary of our financial results, FY25, I'd like to acknowledge the tragic loss of our colleague, Jose Luis Perez, who was fatally injured at Cerro Matosa in September. Our thoughts remained with Ms. Perez's family, friends and colleague. An investigation into the incident was completed and we shared learnings across our business with actions taken to prevent a similar incident from happening again. During the year, we continued to implement our Safety Improvement Program, which is supporting measurable improvements in our safety performance. While it is encouraging to see a positive shift in our leading and lagging safety indicators, we remain focused on continuously improving and embedding safety leadership across our organisation. Nothing is more important than our people going home safely at the end of every shift. Turning to FY25 results. We increased our production of minerals and metals critical to the global energy transition. delivering annual production growth of 20% in copper and 6% in aluminium. Our strong operating performance enabled the group to capitalise on improved commodity prices, with underlying EBITDA increasing by 7% to US$1.9 billion and underlying earnings increasing to US$666 million. Operating free cash flow increased by US$272 million and we improved our net cash position by US $885 million to US $123 million, supported by proceeds from the sale of Illawarra Metallurgical Coal. At the same time, we invested US $517 million to grow our future base metals production at Hermosa and return US $350 million to shareholders. Reflecting our strong financial performance today, we have announced a fully frank ordinary dividend of US$117 million or US$2.6 per share in respect of the June 2025 half year and a 12-month extension of our capital management program with US$144 million remaining to return to shareholders. We are focused on maintaining our positive operating momentum into FY26. We are developing a new bauxite mining area at Worsley Illumina after securing primary state and federal government approvals to extend the operation's mine life earlier in the year. Improved bauxite availability is expected to support a 4% increase in production in FY27 and improved operating unit costs as refinery returns towards nameplate capacity. Brazil Illumina is expected to operate near nameplate capacity in FY26 and unit costs are expected to trend lower due to a reduction in plant maintenance and lower bauxite prices from MRN. In aluminium, Hillside continues to test its maximum technical capacity, and in Brazil, volumes are expected to increase by 16% in FY26 and a further 3% in FY27 as the smelter continues to ramp up. As announced earlier this month, Due to the uncertainty of electricity supply, we have stopped pot relining at Moselle aluminium and currently expect that the smelt will be placed on care and maintenance in March 2026 when the current agreement expires. Turning to our base metals operations, FY26 production guidance at Cerro Gorda is unchanged and we expect 5% production growth in FY27 due to higher copper grades. Cerro Gorda continues to progress Bramfield growth options to increase future volumes and unlock the exploration potential of the Catabella North East prospect. At Cannington, we have completed our mine plan review designed to manage more complex underground conditions and deliver reliable mining rates. We are working to embed further cost savings as we optimise contractor and equipment requirements. and advancing options to extend the current reserve life of six years with the remaining underground resource and open pit opportunity providing significant potential. At Australian Manganese, we completed the operational recovery plan following the impacts of tropical cyclone Megan, with export shipments on track to reach full capacity this quarter. With the recovery plan now complete, work is underway on options to extend Jemco's mine life. We continued our portfolio transformation FY25, realizing significant value through the sale of Illawarra Metallurgical Coal and exiting lower returning businesses. This has further streamlined our portfolios towards higher margin businesses, reduced complexity, and unlocked capital to invest in our higher returning growth options in base metals. At our regional scale for most of the projects in Arizona, we achieved key construction and permitting milestones for Taylor, ZIG-led silver project in FY25, and construction activity for the shafts and surface infrastructure is set to increase in FY26. Costs of packages awarded to date for Taylor have been within fit expectations. While we have not seen material direct impacts from US tariffs, we continue to monitor potential inflationary pressures as we progress through remaining packages. We are progressing work to unlock value across Formosa's highly prospective land package and today announced an upgraded mineral resource for the Peak deposit. Exploration results from Peak support the potential for a copper-dominant mineralised system and we are continuing study work on the potential to add copper production from Peak, leveraging the infrastructure established for Taylor. In closing, we have simplified and improved our portfolio. Our operations are performing well, our balance sheet is strong, our pipeline of base metals options has the potential to underpin significant growth and our unchanged capital management framework is designed to reward shareholders as we capitalise on increasing demand for the minerals and metals needed for the global energy transition. I'm happy to take questions from here.

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