Whitehaven Coal Limited

I'm Paul Flynn, Managing Director and CEO of Whitehaven Coal, and welcome to this short overview of Whitehaven's results for financial year 21. Firstly, our safety performance. Our safety performance by industry standards is very good, but compared to our own aspirations of continuing to drive to zero incidents, we need to do more. The safety outcome for the group for the 12 months ending 30 June 2021 was a total recordable injury frequency rate of 5.86, primarily driven by a series of minor injuries in the second quarter. During 2021, our Gunnedah Coal Handling Plant and Rockland site, now in rehabilitation, both achieved recordable injury frequency records of 3,000 days. This is a great result and reminds us that injury-free operation is possible. We continue to focus on improving our safety performance through targeted programs that aim to increase hazard reporting and safety interactions. Both are measures focused on preventing incidents before they happen. During the past 12 months, our operations have remained COVID-19 free. So I thank all of our employees and contractors for maintaining appropriate hygiene and distancing standards. FY21 was a mixed year for both the coal market and Whitehaven from an operational perspective. During FY21, coal prices across both metallurgical and thermal coal segments have increased significantly from the lows experienced in mid 2020. The thermal coal GCNUC index, which the majority of Whitehaven's thermal coal is priced off, has more than tripled from the low of just US$48 in August of 2020, now currently reaching US$170. At an operational level, our open cut operations, Malls Creek, Tarrawonga and Werris Creek, have become more consistent and we are seeing better performance across our coal production and overburden movements. Our largest mine, Malls Creek, recorded record wrong production for the year of 12.7 million tonnes, while at our Narrabri underground mine, performance was significantly impacted by ongoing issues resulting from a previously undetected geological fault structure encountered in November 2020. At a group level, wrong production of 20.6 million tonnes was achieved, which is in line with the prior year. Maintaining production levels means keeping people in work, both inside the vine gate and for the countless local businesses that depend on our presence. During these challenging times, our positive role in the regional economy and communities is more important than ever. Our reported underlying earnings for the year finished at 205 million Australian dollars, down 33% on financial year 2020. Several important variables contributed to this result. Narrabri produced less coal than expected, and the coal quality was heavily impacted in the fault affected area, resulting in lower realized prices. Average coal prices were low in the first half of the year, but recovered significantly in the second half. Additionally, with almost all our revenue denominated in US dollars, the significant strengthening of the Australian dollar compared to the previous year saw our Australian revenues decrease. After depreciation interest in tax, we reported a net loss before significant items of $87.3 million. The significant items recorded by the company reflect an impairment charge of $650 million before tax, the majority of which, being $549 million, relates to the Narrabri mine. This charge reflects the reduction in dual coal reserves for the current narrow row mining lease arising out of an optimisation plan which has been developed to focus on the production of higher quality coal over the balance of life and mine and adopting conservative price assumptions considering uncertainty in coal markets. The balance of the impairment charge relates mostly to Weres Creek with a $90 million impairment reflecting the revisions of its closure plans with production ending in FY24. After accounting for these significant items, we have reported a net loss after tax of $543.9 million. Having not recorded a net profit in this year, and in accordance with our dividend policy, the Board has made the decision not to declare a final dividend for financial year 2021. During the year, it was pleasing to have reached key milestones on each of our development projects. Firstly, in August 2020, we obtained the NSW Independent Planning Commission's approval for our Vickery Extension project. This will enable the project to operate at up to 10 million tonnes per annum of open-cut metallurgical and thermal coal. Our Narrabri Stage 3 Extension project's environmental impact statement was submitted to the NSW Department of Planning, Industry and Environment. The EIS has now gone through the public exhibition phase and we are awaiting the Department's whole-of-government assessment report. We have also submitted the draft environmental impact statement for our Winchester South open cut metallurgical coal project to the Queensland Government. Located in the well-established Bowen Basin, it is our first development project in Queensland. And just earlier this month, the draft EIS was released for public comment. During the year, we also released the project's maiden reserve statement. As you can see, we are continuing to progress our development pipeline. but work is proceeding cautiously and in line with our strict capital allocation framework. I want to thank all of our shareholders, our employees and the communities in which we operate for their continued support. Looking forward to FY22, we start the year with record high coal prices in a very tight market. Our focus will be threefold, to drive consistent operational performance, optimise the most margin accretive coal product offerings and maximise the cash generation opportunity in this robust market. This will ensure that we achieve our goal of retiring debt in the near term and returning value to our shareholders. Thank you.