Whitehaven Coal Limited

Good morning, everybody, and thanks very much for joining us for our half-year results presentation for FY25. I appreciate you all taking the time. I'm here with our CFO, Kevin Ball, as usual, and, of course, our COO, Ian Humphreys, for any questions and supported here, of course, as always, by our investor relations team in the room. I'll go through the presentation, and Kevin will deal with a bunch of slides here in relation to certain sections of the presentation, and then we'll get to Q&A because I'm sure there's There's going to be a few questions. And I know you've all got a busy day, so I'll try and get right through it with many companies releasing results. I do want to just momentarily at least draw your attention to the fact that, as you can see from the presentation, there has been a bit of a change in terms of the branding of the company. So Whitehaven has refreshed its brand. I don't want to make too much of it. And for those worried about costs, it's not an expensive exercise. We've been very frugal in doing that, but we have modernized it and given it a nice contemporary update. And you'll see a bit of a change there. The business has doubled. So we've taken our triangle and added another triangle. So we've got two triangles and we've rotated 90 degrees to form our W. So If I've lost all of you with the marketing speak, just go to our website and have a look and you can see how that works. But we think the company has changed. We've entered a new chapter over the last 12 months and a contemporary branding and refresh we thought was appropriate given the transformation of the company. But we're still cold. Cold's in our DNA. Very proud of the industry we're in and the business we've created. So no change in that regard. Over the page is the usual disclaimers because we do have some forward-looking statements that are involved in this presentation, so I'll draw your attention to that. And then we'll get over to the highlights. Dealing firstly with safety, safety results at our TRIFA at 4.9 is a solid start to the year on a combined basis, being this our first full financial year of our expanded footprint. So 4.9 was definitely a good result, but there's no There's no doubt in our minds that there's more work to be done here and making sure that our expanded footprint, everybody's working together across the same stance with the same safety systems, we know we can do better than 4.9. On the environmental front, we are entering our third year now of zero enforceable actions on the environmental front, so very pleasing to see that progress continuing. If I move over now to the operational and financial results for H1, for FY25, Some of these numbers will be familiar with you already. 19.4 million tonnes obviously for ROM production and 14.2 million tonnes on equity sales. We've effectively doubled our volumes and sales with the addition of Dornier and Blackwater. We've achieved, as you know, an average price of $232 Aussie across the group, being $247 for Queensland and $211 for New South Wales. Unit costs have done well. So the first half, we're at 137. That's total costs, not mining costs, which is below the bottom of our guidance range. So we're tracking very well there. Encouraged to continue that momentum for the balance of the year as well. Revenue of $3.4 billion was 64% metallurgical coal sales and 36% on the thermal side of our business. Underlying EBITDA was $960 million. Very good result. Queensland contributing $588 million. to that underlying impact of the business was $328 million for the first half. Certainly seeing the benefits now of a bigger business with scale and diversified across both met and thermal products. We had $32 million of acquisition-related costs in there and transition costs pre-tax. And we've reported $326 million of non-cash-related financing adjustments in relation to FX adjustments and also discounting unwinding through our finance line. So Kevin is going to pull that apart for you with some slides a little bit further later on. We are going to pay a fully franked dividend of $0.09 per share, which will be paid on the 14th of March, representing a payout ratio of 37% of profits from the New South Wales business in line with our stated dividend policy. We've also announced the resumption of a modest share buyback of equal value in dollar terms, being $72 million, which will be executed over the next six months. On a combined basis, the return to capital represents 44% of the payout ratio for the underlying group impact for the half year. The board's confidence to reinstate the buyback at a modest level at this point was certainly influenced by the on-time returns confirmation, one-time formation of our joint venture, Blackwater, coupled with recent share price movements, you know who you are, which made the buyback look very compelling from our perspective. Now, just over to these charts on our revenue, you understand this, you've seen this before, but just confirming again, metallurgical coal, We have clearly transformed our business. The revenue share is 64% versus 10% metallurgical coal for the previous year. Japan certainly is the premium bedrock of our business and on our expanded footprint still represents 50% of our sales. But if you look to the right there and look at those sales, you can see there's a nice spread of other customers and emerging markets, which bodes well for the future. India now 11%, China 11% of volumes, all metallurgical coal sales in those two markets there. Korea, Malaysia, and Taiwan in aggregate about 20%. And in the case of Korea and Taiwan, moving more into the metallurgical coal space as well, having historically been more thermal-based markets for us. So the acquisition, as I say, is delivering diversification benefits and looking very positive for that spread of new jurisdictions, all which have nice growth opportunities in them for the future. Over again, these charts will be familiar to you, so I won't really dwell on them too much. Global supply demand on the left-hand side there in terms of the high CV thermal market and the same for the metallurgical coal market on the other side. Certainly, these commodity insight graphs depict certainly an interesting drop-off in supply, but growing demand at the same time, giving rise to those deltas. You can see they're 139 million tonnes on the thermal side of things, out to 2040, and over the same time horizon, a 74 million tonne deficit on the metallurgical side of things. I think the interesting trajectory here, just on the left-hand side in particular, is the runoff of available supply of high CV thermal, which We're certainly very well leveraged, too, and look forward to capturing the benefit of that delta as it continues to expand driving prices in the right direction for us. I'm over now on the market conditions slide. Now, there's a lot of stuff in here, so just bear with me as I get through it. But we'll just cover off on some of the dynamics. Demand for our met coal and also thermal coal is very strong. So we're not seeing any changes in there, despite what we'd say is a relatively soft market. On the thermal side, we've obviously got long offtake agreements there, which allow us to move our way through cyclical changes pretty well. And pricing and premiums remain good based on that contractual position. I would say, though, that if you're trying to move incremental times outside of that and you've got high CVE coal, the best you can see at the spot market at the moment is a GC flat outcome. But that's if you're uncontracted and looking to move incremental times. On the MET side of things, MET's actually been relatively resilient. We'd like to see the Indian market pick up a little bit more, and we certainly had expectations of that. Having said that, there's obviously lots of cheap Chinese steel in the marketplace, and I think that is putting a little bit of a weight on the market overall. But for the first half, the PLV averaged about US$206. As I say, for Queensland, we got US$247 for the sales in Queensland and US$211 for New South Wales. Excuse me. Now, just a note, just worth noting just on the contingent payments for our Queensland acquisition. That number previously advertised in our quarter had been tracking around the $33 million mark, I think. But given the softness in the market, we think that's going to come off a little bit further. Excuse me. Scratch the throat. On the cost side of things, as I say, 137 is a good result. We think that with the momentum in the second half, we can continue to keep our costs down the bottom end of the range. So very encouraged to continue to do that. We're certainly seeing productivity and cost out opportunities materialize in the results we've got to date. In Queensland, we see further upside of being able to continue that pathway into the future. I do note that our New South Wales cost base does have, is going through a period of temporary higher costs, and we thought we'd draw some of that out for you and highlight some of those dimensions of that to you and when those costs might be alleviated. And Kevin will go through that in one of these slides a little bit later on. I'm over now to the operational side. Again, I won't dwell on this too much because you've seen both of the slides on New South Wales and Queensland, but just to reiterate, 19.4 million tonnes for the first half on a managed ROM basis and 15.8 million tonnes on a managed sales basis across the business as well. So ROM basis 90% up on period on period and doubling of our managed coal sales. Splitting this apart a little bit, New South Wales, 9.4, good results. A little bit less than our period on period, I have to say, but that is in accordance with our plan. All mines operated well in their plans, if not better on their plans. And certainly a little bit more weighting of the open cuts to the second half than there is in the first half. Narrabri, as you know, goes through a long wall changeup in this half. And Vickery is ramping nicely. Queensland side of things, again, 9.9 million tonnes. This bears well compared to traditional performance of these sites. So I won't dwell on that too much, but both sites doing well. Blackwater certainly doing better. And Dornier certainly showing some real signs of improvement here, which is very nice. And numbers in the first half, which they haven't seen for many years. So that's very, very encouraging. We're excited to see where we can take this in the year. But in aggregate, ROM and sales certainly pointing towards the upper end of our guidance range. With that, over to you, Kevin.

Yeah, thanks, Paul. So let me start with earnings for the half year. We reported $960 million of underlying EBITDA. The DNA side of that, we've given you some guidance in the back of this pack on how that will run for the rest of the year, because I think that's... point of education, was $340 million, which is $107 million for the New South Wales business, which most people understand, and then $233 million for Queensland, which reflects amortisation of acquisition costs. We had an underlying net finance expense of $151 million, which is about $100 million relates to the interest payments on the US $1.1 billion credit facility, and the balance of about 50 is drawn from leases. interest charges on provisions as they unwind and an amortisation of upfront fees. And that gets you to an underlying income tax expense of about 30% or $141 million, which gets us down to $328 million in NPAT There were $22 million of post-tax transaction and transition costs. And this is predominantly IT systems and some restructuring redundancy costs as we optimize the Queensland operations. When we stood SAP up in Queensland, we stood it up in five months and we naturally understood that this was gonna take a little more work to flesh that out over the balance of fiscal year 25. So that's what you see in that number. And the followers of Whitehaven will know that we now have US denominated debt, cash, on our balance sheet and deferred consideration to BMA, they're all expressed in US dollars. So as the Australian dollar fell from about 0.66 at 30 June 24 to about 0.62 at 31 December, the US dollar denominated cash and debt needed to be adjusted to that current rate. And that's what really led to the underlying non-cash. There were also discount unwinds on the deferred consideration and the contingent consideration. And you can see all that set out in note 4.2 to the financials, which will give you all the detail. But once again, they're all non-cash adjustments. And in years to come, as that Aussie bounces around a little bit, you'll see that come through in these adjustments to underlying financing costs. Over the page onto slide 16 and looking at the five-year financial graphs, you really can see that FY22 and FY23 were years that enjoyed record thermal coal prices. But arguably the first half of FY25 represents a more average pricing outcome, albeit that we think met coal market was relatively soft. We've said we expected the GCNUC to be fairly resilient in that $120 to $150 range, and it was in half one FY25 at US$139. But the PLV hard coking coal index averaged 206 for the first half, and we believe that's soft, relatively speaking. So with a half-year underlying EBITDA of $960 million, or close to $2 billion annualised, you can see the significant scale benefits coming through from acquiring Dornier and Blackwater. With met coal revenues accounting for 64% of our revenues, you can see the acquisition has provided Whitehaven with substantial diversification benefits. And this is in a year when Whitehaven has temporary higher costs. As Paul flagged, and I'll talk you through this cost position in the next slide or two. So what this means is these results are translating well into cash generation, and that really does put the board in a good position to reconsider Whitehaven's capital allocation framework at the end of FY25. Of course, we see the proceeds from the sale then of Blackwater coming in on the 31st of March. That US $1.8 billion will help with the balance sheet and increase flexibility. And our net debt position at 31 December of about $1 billion will soon reduce when that US $1 billion comes in. And of course, we still have to make that first of the deferred payments to BHP and Mitsubishi on 2nd of April, 25. So segment results on the next slide. On a revenue basis, Queensland contributed $2 billion in the first half, being close to about 60% of our overall revenues. So this is, again, the scale benefits coming through. And the EBITDA contribution from Queensland was $588 million compared to $395 million of EBITDA from New South Wales business. The first half of financials show me the benefit of the diversification in product and in markets and of the increased scale of Whitehaven's business. And we did all that without issuing a single Whitehaven cost share. We know we can do more in the years to come as we continue to simplify and reshape the Dornier and Blackwater mines. Over the page, we're giving you the EBITDA margins. A $67 a ton margin on 14 million tons of sales is attractive. But there's a lot going on in this slide, so let's try and have a closer look. We think we can continue to improve our costs, I think we keep saying that, and our revenues. At the group level, we realised an average price of $232 a tonne for half one fiscal year 25 and a unit cost of production of $137 a tonne with an average realised royalty of $27 a tonne. In Queensland, royalties averaged about 13%, while in New South Wales, the average royalty rate is closer to 10%. I would say to you that on the cost side, when we set guidance at 140 to 155, we knew fiscal year 25 would be a higher cost year. And we'll talk through that. You can see those New South Wales operations points at the top of that slide. So Dorney and Blackwater both delivered first half results that we're very pleased with. We've got productivity improvements coming through at each operation. and there remains room for further improvement. We're on track with our plans to reduce costs in Queensland at the annualised run rate of $100 million per annum by the end of this financial year, and we're seeing cost efficiencies coming through from streamlining operations, including reducing duplication, reducing travel and accommodation costs associated with fly-in, fly-out workforce. We're also seeing improvements in maintenance programs and in scale and other benefits from procurement. At Blackwater, we're rebuilding blasted inventories and we're rebuilding pre-strip inventories. Both these initiatives are expected to support productivity improvements and more sustainable production volumes in the future. As Paul said, in New South Wales, we are in a higher cost period, but we expect to see improvements. And on this slide, we provided you with additional context and timing around that. New South Wales volumes and unit costs in the first half reflect current mine sequencing. We're mining through the hill at Tarrawonga, which comes with a higher strip ratio, and that'll continue into next year. And as you know, we're digging the box cut at Vickery as part of early mining, so costs are naturally higher at Vickery for a few years. In the first half of this year, we had a strip ratio at Malls Creek that was about one turn of strip higher than our full year, so we expect the second half from Malls Creek to be contributing to the lower strip ratio. We've talked about incurring additional port and loading charges at NCIG as the shareholders agreed to increase those charges so that the NCIG could accelerate its debt amortization. Across New South Wales, these charges, we're paying an additional $4 a tonne. And once the senior debt is fully amortized, which is around fiscal year 30, we would expect about $9 a tonne to come out of the New South Wales cost base. And finally, as we close Warris Creek, and volumes that existing mines have moderated, we've seen unit costs increased because of underutilized take or pay costs on the rail and port. We're in the process of renegotiating our New South Wales rail haulage contracts to better align with our actual volumes. And when we do this, we expect New South Wales unit costs to reduce by about $3 a ton in fiscal year 27. We see this as temporary. On the port side, over and above the NCIG debt amortization, we're seeing about $2 a ton of additional costs because of underutilized take or pay volumes. We don't expect this to change much until we see volumes from full-scale victory or the volumes lift from the existing operations. So I hope that gives you a bit more colour about those costs. Come over the page onto EBITDA in the first half. I love this slide because this really tells me we had 632 million in EBITDA in the New South Wales business in first half of fiscal year 24. And with coal price change, with sales volume costs, that fell by about 236 million. But with the Queensland acquisition, we've added $588 million of EBITDA, and that's gotten us to this $960 million for the half year. Net debt of $990 million. At the start of fiscal year 25, we had a net debt position of $1.3 billion. And by the end of the first half, we had about $990 million. So cash generated from operations was a solid $922 million. And we paid $110 million in interest. We received a tax refund of $12 million. We paid a total of $245 million in capex and other acquisition costs. That's a combination of a couple of things. We bought a seat at the table at DBCT. That cost us in the early 20s. And we made $16 million payment to EDF for the final payment to EDF for the acquisition of the 700% in Narrabri. And again... We paid $104 million to shareholders, being the 13 cent final dividend in FY24. There are about $160 million of loan repayments, ECAs and lease payments. And then there's a little bit of tidy up there in the foreign exchange. So we finished at $9.89. That $9.89, I'd expect when we get the billion and 80, that will be quite strongly placed. So liquidity, I'm confident there are a number of people who've been running around in a softening coal price with a view about liquidity in this business. But I'd say we're lightly geared. We're prudently geared. We maintain a strong balance sheet. And historically, and since we acquired Dawn Air and Blackwater, we've maintained sufficient liquidity to comfortably meet our commitments. And with the receipt of the proceeds from settling down the 30%, our liquidity will again improve. Our leverage on a trailing 12-month basis is less than half a turn of EBITDA. In the second half of fiscal year 25, we paid the $363 million of stamp duty on the 2nd of January, and we'll have a little bit of tax to pay on this Blackwater sell-down, but we're well positioned to do that. Somewhere in 26, I'd expect us to reposition our funding sources and structures over time to take advantage of What you see is a really strong balance sheet, strong leverage, strong gearing, and strong liquidity. So we've got great relationships with capital providers, and we'll look at that in 26. Let me hand back to Paul to comment on the capital allocation framework.

Thanks, Kevin. The capital allocation framework is serving us very well, has been consistent for many years now, as you know. This slide is familiar to all of you. And it underpins the disciplined approach that we've taken to sustaining and growing our business and returning capital to shareholders, be that through dividends and buybacks. As I mentioned earlier, today the board has declared a $0.09 fully franked dividend and an equally sized in dollar terms buyback to be executed over the next six months. As we've mentioned before, The board will be reviewing in its entirety the parameters within the capital allocation framework. The framework itself we're very happy with, but the parameters in terms we set the payout ratios and so on, as we previously said, we'll review that in full at the time and release that to you at the time of the full year results for this year. That process remains on track. But, of course, the sell-down opportunity and confirmation of the timelines for that did give the board the opportunity to reinitiate the Viabac at this earlier juncture. Again, the dividends, first half to second half, our usual practice is to be a little lighter in the first half. The board likes to see the full cash generation from the business and wants us to get an eyeball on the full MPAT outcome. And so, again, we'll be a little lighter in the first half versus the second. Just back on the payout ratios, that's 37% of the underlying MPAT for the 9 cent dividend, 22% of the underlying MPAT of the entire group. If you add the buyback of $72 million in there, then the payout ratio is 44% of the underlying group MPAT for this half year. Just moving over to guidance quickly, nothing much changing here. Guidance remains as it was. with one exception, of course, now with the confirmation of the joint venture formation. There's a small adjustment to equity coal sales to take into account, obviously, the formation of the joint venture on the 1st of April, where we obviously only retain 70% of Blackwater for the balance, or for there on in, but for as far as the quarter goes, the remaining quarter of our guidance. So there are some small adjustments for you there to take into account. um as it relates to equity coal sales now there are small adjustments also there on costs of coal and also total capex but we view those to be relatively modest in the context of things so we've just left those the way they are but there will be some small there will be some small adjustments to the good side of that both those metrics as we get to the end of the year And I'll just take you to our focus for the balance of FY22 slide. Now this again, this is a little busy, so I'll get through it. Just bear with me. There's lots going on in the business as you can tell, but I hope you get a sense that just from the discussion with capital allocation framework and what we've done in this six month period, we do keep an eye on the wood for the trees, but this is indicative of the amount of work that's going on in the business today. And she would expect that that's the case, given the size and change of the business. Delivering safe and productive operations is absolutely our focus, both in New South Wales and Queensland. We need more consistency in that front, and I know we can drive our safety outcomes down, as we said earlier. Costs out and issues in Queensland are going well, as Kevin mentioned, and we remain on track for the $100 million reduction in our Queensland cost base on a run rate basis as at 30 June. That's how we'd like to enter the new financial year. Ramp up in Vickery is going well. We're preparing well for the change out at Narrabri. And the one thing we haven't been able to get to, so my apologies for that, is that we did say we'll be revising our stage three CapEx for you, but that will be a little bit delayed for a month or two. And the only reason for that is just that we're obviously going through the motions with our friends in our joint venture. So there's more people involved in that process than just ourselves, as you understand. So we'll just need a little bit more time Just to bottom that out. But I can tell you that there are hundreds of millions of dollars reductions in capital there, whether they be absolute reductions and also deferrals of capex as well. So that's that we very positive. We'll get that to you shortly. As far as the products go, Blackwater and Dornier, as I mentioned earlier, the qualities of the products as published previously have been revised and we circulate those with customers and that's getting a very positive reception. So we do expect to see realisations improving. Over time, obviously, as I mentioned in the last call, the customers who already have the call understand what they're getting. And we're obviously just having a discussion with them about paying for all the benefits of that. Whereas new customers, the conversation starts at a different level. And so we are seeing incremental change there in realizations with new customers and also with the existing as well. At a group level, there are lots of things to be done there. Obviously, IT and internal reporting, there's lots of things going on as we bring the business together. The business is still on two different systems as far as the IT goes, New South Wales versus Queensland. We will address that over time. And completing the sell-down of the joint venture formation for Blackwater, that's very exciting. The 31st of March is now the date confirmed for all to see. But there's a little bit of work that's required from on our side just to make sure that all comes together, you know, joint venture formation, reporting and so on that goes with all that. So we're well onto that. But overall, I'm very pleased with what's been a very good and strong first half of the year. We've set ourselves up well for the full year. As I say, our guidance is tracking to the better end of our guidance on pretty much every dimension, which is very positive. And it's nice to have turned the corner to the second half with some good results behind us. The capital allocation framework has allowed us to draw in some flexibility to that. So I hope that's welcome news to our shareholders, but we will remain diligent and to drive the outcomes and cost reductions that we expect and to make sure that we generate the maximum returns for our shareholders over time. So with that, I'll just thank our people for the hard effort they've put in this year, the board for its support, and shareholders for their ongoing support of the company. So with that, I'll hand back to the operator for the Q&A session. Thank you.

Thank you, sell-side analysts. If you wish to ask a question, please press star 1 on your telephone and wait for your name to be announced. If you wish to cancel your request, please press star 2. If you're on a speakerphone, please pick up the handset to ask your question. Your first question comes from Adam Martin with E&P. Please go ahead.

Morning, Paul. Kevin, just on unit costs, obviously it looks a pretty good result in the first half. You've maintained guidance there for the full year. I suppose what's driving that? Is that conservatism? Are you worried about weather? Perhaps just talk us through that, please.

Yep. Thanks, Adam. Yeah, look, we did certainly position our guidance in a conservative way. And so we gave it a little wider based on the fact that we had doubled our business and two very new assets turned up in our budget, you know, with relatively short amount of time to actually pull the budget together. So acknowledge the conservatism there. Having said that, I don't want to take anything away from the team in terms of what they've done from a cost out perspective and a productivity benefit. Both sites are, as you can see, in Queensland performing well relative to the historical context. So we're keen to keep that going. Obviously, weather, as you say, is a feature. And in more recent times, we've had certainly some weather issues just the tail end of the quarter. And then since the quarter closed as well, we've had more weather, as everybody knows. Certainly in the month itself, it's been more than we would expect in a given month, but on a year-to-date basis, we're actually doing okay in terms of our allowance of weather days, if you like, if I can call it that, weather days relative to how many days we've lost year to date. So that gives us the confidence to keep our guidance where it is and continue to say to you that we think we'll be in the upper end of our guidance ranges, which is positive.

Okay, thank you. Just a second question just on costs. I mean, you've got the $100 million target. It sounded pretty positive just the way you were talking about it. I mean, it's probably a rough split of what you're sort of seeing, sort of people versus maintenance. And do you think that targeted sort of risk is improving at the end of FY25?

Yeah, look, there's a whole range of projects that underpin that $100 million project. And it ranges across a number of different areas, as you mentioned, procurement, maintenance and people. So we feel very confident we are able to deliver that. So far, the team's doing a great job in managing that themselves on site. So their ownership of that is actually very encouraging and continue to drive that in a way that that makes us feel that we'll get to 30 June with a rebased business with $100 million less. But there's probably 20, 25 projects in that list, so I won't try and recite them all for you, but it's tracking very nicely. You can see the benefit in our costs already. It's not miraculously going to appear on 30 June, but you can see our costs certainly improving along the way.

Okay, thank you. I'll let someone else go.

Thank you. Your next question comes from Raoul Ann with Morgan Stanley. Please go ahead.

Hi, morning, Paul, Kevin and team. Thanks for the call. Two from me. Look, firstly, perhaps a more forward-looking question for you, Paul. Just wanted to test, you know, you've obviously talked about how the supply side looks or the supply-demand balance looks tighter for high-CV thermal coal. And... Last quarter, you had a 60-40 split on metham thermal. What's the flex, I guess, in the NSW business to perhaps go down that path a bit more and perhaps do majority or all of its thermal, even in future periods, even bringing sort of Vickery into the mix, which currently sits at about 60-40? And that kind of perhaps creates a bit more positive pricing for your Queensland products anyway in the semi-soft end of the market. Just wanted to test that theory a bit and how you think about that, given you're outlining that supply-demand imbalance more in the thermal side.

Yeah, thanks, Raoul. That's actually a good question, but it probably takes longer than I got to answer that one because... There's a lot to that. On the supply side, we definitely see constraints on the supply side. As I'm pointing there, in terms of the high CV thermal market, there's a runoff there that's more aggressive than you can see on the met coal side of things. Our capacity to switch semi-soft in New South Wales into the thermal market is, well, we have absolute, if I could say that, control of that, if you like, in terms of what we can do. Historically, you would have seen the Metcoals split in the New South Wales business higher. In the last few years, of course, we've been talking about that in great detail. And 10% revenue last year is indicative of where that has sort of gravitated to. So if we need to switch more, we can, Vickery included. Vickery Semisoft will be better than Malls Creek. So that may be a little stickier in the market. People will want that. But again, this is just an economic question. If If there's more money in selling it as thermal than you've seen us do this in the past, we'll do so. Queensland Semi-Soft is different. It's qualitatively better, and so it does sit in a different market with different pricing, and that really being a function of the fact that these are real met coal products that come from a met coal scene as opposed to our New South Wales going to our Basin-based products. So they price differentially, and they are stickier in the market when things move around.

Does that help? Yeah, absolutely does. Just one follow-up there very quickly. In terms of the Queensland operations, you put it quite well. I just wanted to perhaps check if you're able to give us any sort of understanding in terms of, I know you can't provide 100% visibility, but like the products pricing, I mean, are some of these products or what proportion of these products out of the Queensland mines getting priced off the I guess the premium low vol index and what's being priced off, I guess the lower quality indices would be an interesting point to learn if you can shed a bit of light on that.

Yeah, thanks, Raoul. Yeah, look, we won't be giving splits on the four different products because we think that's just a difficult thing for everybody to be able to manage. But what we'll say is, and we said this when we actually purchased the mines and we'll repeat it again, our drive is actually to get the majority of the products actually priced off a relative PLV basis. And that is our objective. And that will take some time. We've made good steps with that already with some of our customers, but not all. We've still got people pricing off the low-vol hard coke and our realizations on that front are actually doing better by virtue of the fact that those specs are better than what previously had been published. The PCI out of Dornier prices off the PCI, so it won't be a plv hard cake that we're able to move that one too but we are trying to simplify this for you so we with each quarter we will continue to give you an average realization for those four products of the plv just so that everybody in time can feel more comfortable about in aggregate where do those four products sit now they'll move they move quarter to quarter as we've said before and they move month to month you know if you've got A hard coke shipment out of Dornier slipping from one month to the next, and that happens to be at the quarter end, you get a variation. But that's not the way we manage the business in terms of month-to-month basis. So we are trying to help you in giving you a landing on an aggregate realization across those four products, say, for instance, over a year, rather than delving into the minutiae or four different products per quarter. I think that would just be too difficult to manage. And we give that to you historically anyway, but it would be very difficult for you to manage prospectively in your model. So we think that the aggregate of the four is a better way to go.

Got it. Okay, now that's clear. Look, just if I can sneak one more in. You talked about how the first half tends to be lighter on the payout. Obviously, your policy currently is 20 to 50. You've done about 44. in the first half, if we include that dividend as a capital return. So obviously, it's above at least the past couple of years. Is that directionally where we're going in terms of payouts and capital returns to shareholders with this, you know, re-look at the policy that's coming up?

Yeah, the payout ratio is obviously, is in our current form, based on the thermals. business and so what we're saying is when we get to the end of the year we'll be able to reset the parameters um that we're using and because we've de-risked um the balance sheet with the formation of of the jv which i have to say the team's done a tremendous job on executing well to make sure the regulatory hurdles that we don't control have been actually cleared in a timely fashion so done a great job there um Yeah, the board will be able to reset those parameters for everybody at the year end. But, you know, suffice to say, the levels we've pictured that already, I think we understand that there are expectations that go with doing that. And so we're mindful of that when we settle on new parameters at year end.

Got it. Okay. That's all for me. Thank you, Paul. Thanks, Kevin.

Thank you. Your next question comes from Paul Young with Goldman Sachs. Please go ahead.

Good morning, Paul and Kevin. Kevin, great to see a counter-cyclical buyback. Just want to dig into that a little bit. I know last time we did a buyback, I think back in 22-23, the rationale was that the fact that your free cash flow per share was really attractive. So I just want to understand how you measure the buyback. Are you trading at a decent discount to NAV? Is it purely... A valuation call?

You know, you had $5.20. It wasn't a tough call. You know, what have we got? $1.7 billion coming from two partners. It's AAA rated on the 31st of March, so call that $1.5. That's $2 a share. So the rest of the business is worth $3, is it? So this wasn't a hard call. You do the math, and this thing... You know, we've got a view that says that the market looking forward is robust and strong. We've got a really strong platform here. We've got an unlevered business, pretty much unlevered business. You know, if you didn't put the buyback on, I think if Paul went offshore, they'd be almost flogging him in the meetings offshore. So I think the board took a view that said, you know, three times EBITDA looks a bit light.

I think the framework, we've stuck to it through the time and that's working. And I think it's the right way to think about how do we employ the incremental dollar of capital that's available to be allocated. And I think that's served us well. I'm glad you've described it as the counter-cyclical buyback because I don't want to be involved in a cyclical one.

Yeah. I mean, it's a great decision, guys. No pushback from me. So I guess the question then is that know investing in your own portfolio or buying back your stock um and i know the queensland assets that you only spent 100 million in the in the half and they're probably well capitalized so so now is this what you just continue to do just keep on buying back stock and and don't invest in organic growth that's the right decision at current a current share price well i think this is this is dynamic as you know paul right i mean these levers they're important levers that you must have available to you at all times now

The variables in terms of how you assess them change. Now, as Kevin has rightly pointed out, the share price makes the case for this very compelling. And the board will reset the payout ratios, as I said, in August when we release our full year results. So that will be the right time to more formally reset that based on the fact that we've got a bigger, more robust business that's generating good cash. And so we see all these things being important to us. But as you know, not all those different considerations in our framework are executable at the same point in the same time, whether it be internal growth, whether it be investing more capital in existing businesses. Vickery, whether it be M&A, all these things happen in different timeframes. And the ones that we control, obviously, in terms of capital deployed internally in the business and capital returns to shareholders, those ones we've looked critically at this time. And we said this is the right time to do it because the share price is where it is, and we're very confident about the future of our business.

Yeah, understood. Paul, can I ask just about the thermal market? It's really cracked. Right, in the last sort of four weeks, you know, China was stockpiling a lot towards the end of last year and importing a lot. You know, their domestic mines have been performing well. It looks like the market is well supplied and obviously got the impacts and the relation with the gas price as well. But it should have been a little bit more seasonally stronger and now we're heading into sort of shoulder season in six weeks' time or so. So any thoughts or any views on the thermal market? thermal price and what's really driving it down.

Yeah, that's a good summary, Paul, of your dimensions. Yeah, good summary. Look, I think consumption of the coal is actually pretty good. We've got a cold winter, which is nice, around the place, so that will deal with some of that. I think the one thing, just to add to your mix of factors there, is that in the high CV market, there has been a little bit of extra production turn up, and Australia might even be the culprit for that. So there has been a bit more. But the consumption is actually good. So our key markets are doing well in terms of consuming and purchasing. So we're not seeing any change in behaviour on the contracted positions we have because, as you know, we're pretty well contracted on our thermal side of business in particular. There's been no change to that. Nobody nominating for less tonnes. That's all been fine. So I think this will wash its way through. And I think what we're seeing... seeing at the moment, will wash its way through. And that's why we feel that it's just a good opportunity. We're comfortable with the business going forward, that our customers are in a good position and premiums are holding up. And you'll see this adjust in time.

Okay, great. Thank you. Thank you, Jens. Appreciate it.

Thank you. Your next question comes from Rob Stein with Macquarie. Please go ahead.

Paul and Tim, thank you very much for providing the updates. Just on the buyback versus M&A consideration, you completely understand the points made around the value of your own stock and how you view that. I guess the point would equally... lie to potential M&A targets at this point in the cycle. How do you think about M&A in that context, given that there's a few assets changing hands and that gives you an opportunity that you might not get at other points in the cycle?

Yeah, thanks for that, Rob. Look, well, it's probably useful just to be clear on that. There's nothing that we're excited by in that dynamic at all. So I can allay any concerns that that Whitehaven's interested in doing anything particular at the moment. We're very satisfied with the M&A that we've done. There's lots of work to do to continue to improve those assets. We know there's plenty of upside there. We're doing the necessary work to try and make sure we can liberate that value as quickly as possible. And so it was a pretty easy discussion from our perspective in terms of how to allocate that incremental dollar. As you say, there's a few assets floating around, but they're not They're not ones which we would say can add value to our business. And so we're just focusing on maximizing the benefit of the strategic M&A that we executed nine months ago.

So then really the case going forward from a capital allocation point of view is a deleveraging play, increasing yield, and we can see that yield come back via a buyback slash dividend, depending on the relative price of the day, i.e. the buyback sort of underpins the valuation, and then we can sort of expect it to be a yield stock in that regard. Is that fair? Not that there's anything wrong with that, by the way.

Not that there's anything wrong with that, but I would say that that sort of simplifies the nuances of that discussion at a board level, I would have to say, because, you know, coal prices change, share prices change with it. Opportunities within the business to drive improvements also have capital or stickers attached to them. And so in terms of how we allocate capital within the business, within the business, I'm saying, rather than externally, is important as well. We have aspirations to do more, there's no doubt, not just with the Queensland assets, which are great. We also have Vickery up our sleeve. There'll be a time when that gets looked at as well. But from our perspective, in the meantime, we want to balance all those requirements that you just summarised and make sure that shareholders are actually getting a good result out of all this you know we've got some 30 000 shareholders they've all got different views and we're trying to thread the needle to make sure that we keep them engaged and rewarded for their support thank you that's really insightful appreciate it thank you your next question comes from lyndon fagan with jp morgan please go ahead oh good morning everyone um just on the cost guidance obviously a great

result coming in below the bottom end of the range, what's stopping you from changing the range or at least taking the top end down?

Well, I think now that you've seen where we are, you can pretty much dismiss the top end, I would have thought. So whether we do it or not, you can see where it is. In terms of the bottom, that's a fair call. I think, Lyndon, I think the challenge there is really we've obviously gone through some weather. There may be some more. Even though we think we're heading in the right direction and there's further cost-out momentum in the business, I think we're steering you in the right direction with what we published in the first half. But we have had some weather since these numbers have been closed. And so I think it's prudent just to leave it where it is.

Okay, great. And then similarly with the CapEx, obviously coming in at the bottom end, can you speak to what's driving that and whether there's potential to actually save some money this year?

Yeah, I mean, our CapEx generally come in a little conservatively on our CapEx year on year. I think that pattern of behaviour is probably understood. And of course, but there always is a little bit more capex in the second half than there is in the first half, if you look at our numbers historically. So we've nodded our cap at least to the fact that given that our biggest site, Blackwater, we will hive off 30% of it for the last quarter. There is a capex impact, which will no longer be in our numbers for that. So that's small though. That's why you haven't really played around with the numbers too much. in our guidance. We've left them where they are, but we just acknowledge that that will occur. But we're always trying to make sure that we're responsible with the capital. And again, come back to the beginning of the year, we set this up in a way which was relatively conservative based on the newness of these two new sites to our business. And so we've left it just where it is, acknowledging that continues to be conservative.

Right, and just a quick one for Kevin, just the net finance costs and the underlying adjustments going forward, did we just basically assume that the actual interest bill is what comes into the underlying P&L and essentially all the other items will be stripped down?

You should assume that because what we've got is we've got US dollar debt that's going to bounce around with the exchange rate, Lyndon, and We just don't see that as being useful coming into underlying impact. What you want to understand is how is the business really performing, not how is exchange rates bouncing around a debt that's due in 2029. So, yes, you should assume that.

Yeah, and those bigger ticket items sort of. those variables in terms of the unwind of the discounts on the deferred and contingents, they have a very short life. So that will disappear over the three years and we're almost at the end of the first year of that. So there's only two more left to go at that. So those components will disappear in two years. Well, they'll shrink in years.

They'll be smaller in year two and smaller in year three than year two and they'll disappear at the end of year three. So that's the reason why they're stripped out.

Thank you. The next question comes from Paul McTaggart with Citigroup. Please go ahead.

Good morning, all. So, Paul, I just want to – you may have seen Japan's seventh strategic energy plan, which came out mid-December. And so in prior years, it's really emphasized reduced dependence on nuclear power as much as possible. There was quite a shift. Now they're basically saying – I guess, to meet green targets. They want to get nuclear back up and running at full capacity or near enough, and they want to obviously increase renewables. So it takes them, their target is to go from a thermal energy mix, coal, from roughly 70% in 23 to 40% in FY30, which is not that far away. And I know they're half-year off-take, right, for a customer base. I just want to get a sense of, you know, is this just a pipe dream or do you think this is a fundamental shift? And are we going to start to see your key thermal off-taker start to take less coal through time?

That's a good question, Paul. But again, that's another one that requires much more time than what we've got here. But just a couple of points. I don't... I'm in favour with the notion that they've been de-emphasising nuclear in their previous six plans. I don't see that at all. In fact, of each of those plans, they've set aspirations for nuclear which haven't been met. And so I wouldn't agree with that part of it. And I have seen the seventh plan, draft as it is, and you've done well to read it given it's only in Japanese now, so someone's translated it for you. Yes, someone has translated it. Yeah, we have the benefit of our Tokyo office sorting that out for us, which is good. So we have seen it. Obviously, the seventh plan is quite interestingly drafted because there is more flexible language in that document than what we've seen in the past, in fact. And there's a focus on a longer data profile than the more immediate hurdles, which I think they're... tacitly acknowledging are not realistic. That would be my interpretation of what's going on there, of course. And then, of course, being less specific in this plan about which fuel does what. And so it's interesting. More nukes, I think that's always been the case, that they wanted more nukes on. We agree with that. I think that's very good for them as a country. given all the infrastructure that's already built and been sitting idle largely since Fukushima, other than maybe 11 units. So that's very positive for them. The alternative, obviously, is gas, which is still more than twice the price of the equivalent coal price. And so the notion of doing more gas, I think, is a very challenging one for them, given that they already are very, very dependent on it, and still quite a bit of fuel oil in that market as well, which is less than ideal. So we don't feel like there's a thermal runoff of any great concern here at all. I think, as everybody's saying, you may have noticed that energy consumption actually in Japan has gone up, and that's a big change from where there'd been in the past with a declining population. And what they're citing that is it's just sort of – it's just everybody saying the same thing. It's sort of data – data-driven consumption uh is is is arresting if you like the decline in energy consumption electricity consumption in particular uh in their market and uh now that these um i know everyone's seen the quotes that you know chat gpt searches 10 times more power consuming than a normal google search and uh that is seen to play out in their market just as much as is playing out in anyone else's so my sense of that and the discussions that we have with the government is that um the existing power stations, coal-fired power stations, are actually going to have to stay on for a lot longer than what people are thinking. And that's just my personal view, but that's what I take away from the discussions with the Japanese government officials that we meet with. So we feel pretty good about that. And coupled with the fact that they're asking when we're going to bring on Vickery tells me that they need more coal, particularly of that quality.

Thanks, Paul. Thank you. Your next question comes from Jonathan Sharp with CLSA. Please go ahead.

Hi Paul, Kevin, Ian and Aya. Just first question on the $100 million cost out target. Where are you seeing the biggest efficiencies there? You know, is there just a lot of little things, you know, like improving lightning procedures, improving uptime, or are there any low-hanging fruits and big things that you're quite excited about that you may not be able to implement for a little bit?

Ian's been desperately waiting for a question to answer here. So given that that sits under his operational things, I'll give him a quick summarise for you, acknowledging the shortness of time we've got remaining on the call.

Yeah, look, I mean, the short answer is there's no silver bullet there. There's got to be at least 50 initiatives. I mean, we have a program in place. As you can imagine, there's a pipeline from everything from ideas to things that are in play and some that are already executed. And some of them are the low-hanging fruit that you might talk about, easy wins, and some take of higher value. But obviously the people issue, we've talked about the maintenance side of it. I mean, one of the ones that Kevin didn't throw in is explosives, for example. We are really putting a lot of effort into sites as to the design and ensuring we've got the right powder factors, et cetera. It's a very broad remit across all aspects and the productivity aspects and all the rest of it fall into there. We track it. We've got fortnightly meetings. It's all being reported up and we continue to keep the foot on the throat of everybody to keep adding things into the pipeline.

Okay, thanks for that. And just my second question, I found it quite interesting, just the comment about the potential pre-drainage at Blackwater and Dornier. Can you just expand on that? What is the composition, the gas composition, the content of the seam, and what is the potential plan there? Thanks.

Jonathan, not sure what you're referring to there. No, that one you've Where does that come from? Maybe we're going to take that one offline. I'm not sure where you're getting that from.

Okay, there's something in the presentation that... Pre-drainage? We will take that one offline. Okay. Yeah, we're happy to take it offline. Thank you. Pre-drainage at Blackwater and Dornier. I'll take it offline. Thanks. Thank you.

Thank you. Your next question comes from Chen Jiang with Bank of America. Please go ahead.

Good morning, Paul and Kevin. Congratulations on a strong result. Two questions from me, please. So firstly, on your proceeds, the 30% sale of Blackwater, US $1 billion, I guess after you pay BHP US $500 million on 2nd of April, you will have the remaining $500 million left, which is exactly what you need to pay BHP for the second year of the deferred payment. So I guess... Is that fair to say the proceeds will just be used to the deferred payment in total of $1 billion in the next 40 months? Thank you.

Jen, good question. I'd say that cash is fungible, but I would also say to you that the We did the sell-down on the basis that we had two very good joint venture partners coming in in the form of JFE and Nippon Steel. The billion dollars turned out to be, the billion dollars after tax, roughly speaking, turns out to be the two first payments. All we see that is just means of strengthening the balance sheet in Whitehaven Coal for the next two years. what that transaction does and what that money does is really just support the balance sheet and make a bulletproof for a couple of years. So I wouldn't be trying to suggest that that money is available for distribution. I would be saying that it would fall into the pot of the cash flow coming out of the business, and then we would look at what cash flows are coming out of the business in future when we look at capital allocation. So, yeah. Yeah.

Sure, sure. Thanks for that, Kevin. Well, and then another question, Kevin, just to follow up on the underlying net finance cost. So the first half, FR25, $151 million. If I annualize that number, which gave me $300 million, right? But that's $190 million below your indicative guidance of $490 million. How can I think of your net finance cost in the second half? Will that be making up the remaining of that guidance? So which means your net finance cost will be much higher than the first half for the second half. Thank you.

No, I think you've got the underlying and the unwinds of discounts confused in there, Chen. The way to think about this is that the senior debt should cost me about $200 million Aussie a year. um the balance between the 150 and 101 today is unwinds on our rehabilitation provisions and some upfronts that we amortize and some leasing expenses. But my take on life is that you should take the 200 as being a gross cost on the facility. And then you should have probably double the 50 that goes on there. And then that should get you to about $300 million in interest cost. And the rest of that will be unwinds from things that will come through not in the underlying.

Okay, okay. I guess that's not only for FY25.

That will apply in the next... As we said, in 26, it'll be a lesser number because the unwind on the deferred payments to BMA will be smaller because we'll have repaid a part of that. And then in 28, I think it's... Sorry, in 27, it's pretty much... It's minimal because you're down to the $100 million that's left at that point and a couple of other things. You've only got one year of discounting left. Yeah, you've only got one year of discounting left. So I'd be happy to give you a masterclass in how that gets accounted for after this event. Were you interested? But don't knock me over in a rush.

Yeah. Yeah. Thank you. I appreciate that. Maybe last question, if I'm kind of squeezing about your share buyback or follow-up because, you know, I guess the market didn't expect you to have a share buyback announced today. Okay. By looking at the, if I divide that by the number of shares, it implies around 8.6 cents per share, which is similar to a dividend. So it looks like your capital return is kind of splitting almost evenly between your dividends and share buyback. I'm just wondering what's the thinking behind that when the board made that decision and how should we think forward? I know you will announce capital allocation in August again, just trying to think ahead. Okay.

Let me try and answer that one for you. So the board came out with a nine cent dividend and then, or the board discussion was around a nine cent dividend. And the register has about a little over 30,000 shareholders, which is split offshore and onshore, roughly about the same. Offshore guys like a buyback generally a little bit more than the onshore guys. So if you've got a nine cent dividend, we simply match the nine cent dividend. And that's about the story.

Okay, so it's about the number of shareholders onshore and offshore and the franking dividend.

You may recall, Chen, the split before being about 60-40 in terms of how we've allocated that in the past. So this is a slight refinement to that, but I think as Kevin's saying, it's a nod to the offshore component of our register relative to the onshore. And it's modest, but as I say, the full capital allocation framework parameters will be revised and published as part of the full year results.

Sure, sure. Thank you so much, Paul and Kevin. I'll pass it down. And again, congrats. Thank you.

Thank you. Your next question comes from Glyn Lawcock with Baron Joey. Please go ahead.

Morning, gents. Lucky last, hopefully, for you guys. Kevin, just a question on the lease payments that are coming through now. They've stepped up, obviously, with the integration of the BMA assets you bought. What does that look like going forward from the 76 million and a half? Because, I mean, if I double that alone, if I do my maths right, it's about $6 a tonne of additional costs. And I assume that's excluded from your cost guidance and any CapEx guidance as well. Thanks.

Yeah, Glenn, good question. I'd say to you that when we brought on the excavators in Queensland and we brought on the trucks, we've leased those. And so what we're expecting to see is this business generate improved returns in years to come that should actually see that being self-funding. So it depends on how you think costs are going to work in the future. And traditionally, that's how we've run the load and haul fleet through our business. So I would expect you to deal with the way you've described it.

Okay, so I should think about it as Bottom end of your guidance is 140. I've got your capital guidance, and then I add another $6 a tonne of cash outflows, and I assume those lease liabilities will run for as long as the life of mine's run in Queensland?

But all that happens is that's reducing your net debt. So it's actually neutral on your valuation. So move on. That's how I think about it at least. Thanks.

OK, I'm quite sure I understand it's cash flow out the door of 75 million and a half. But yeah, maybe I'll take it offline as well. And just quickly, Paul, just the met coal markets. I mean, they too are suffering. India doesn't feel like it's come back. There's, you know, met coal sloshing in from Russia at discounted prices. And if Trump does what he says he'll do and gets rid of the Russia-Ukraine conflict and ends it, you know, we could potentially see more Russian thermal, more Russian met in the market. Does that, how does that all play out in your mind?

Yeah. Yeah. Look, it's definitely, they're definitely uncertain times, which is, um, which is actually pleasing to see the prices holding up the way they had in fact. So I think that's pretty robust given that uncertainty. Um, The challenging part of what you just described there is actually the fact that the Russians obviously don't sell the premium-grade coals in the hard coke space, so that's not going to really change that dynamic at all too much. But the Russians obviously have been moving lots of lower-rank met coals and causing a big spread between PLV and, say, semisoft and PCI, because that's where they play, the semisoft and PCI market. If there was to be some normalisation, hopefully stop fighting, that would be great. Then that actually might actually be useful in terms of normalising the spreads because they don't have to offer their product into the market at big discounts to get around sanctions and so on. Back to the broader concept of the steel market itself, yeah, you've got lots of production, no doubt, about that coming out of China and India is taking advantage of that. So that was an easy way for them to actually do that rather than buy... other input costs when they can take advantage of that steel. And then you did see the Chinese make an announcement just on importing coke into the country, which constrained that, which I think is useful for us generally. But India has been just taking advantage of that surplus steel. So I think that's definitely moderated things in the in the short term, but we do see them directionally being very constructive for the balance of supply and demand in the market. So we're seeing lots of opportunity to sell the coal into India in particular. And I note that the two premium products out of the two sites, the hard coke out of Dornier and the semi-hard out of Blackwater, are both of great interest to them. So we do see us growing our footprint there in that market.

All right, that's great. Appreciate the colour. Thanks very much.

Thank you. Your next question comes from Daniel Rodden with Jefferies. Please go ahead.

Hello, Paul, Kevin. Yeah, sorry, hopefully the last one for me. I'll make it really quick, I think. So just on the coal markets, Paul, back in January, you talked on, I guess, the price realisations going into Q3. I just wondered if you could provide a little bit of an update after a bit of a soft Q2, how are the price realisations going for the coal mix?

On the thermal market, what was that, Daniel, you were saying?

Just the cold realisations in Q3 to date, cold price realisations.

Well, we haven't put out any data on Q3, so I think that what I mentioned there before was that on the thermal side in particular, we're heavily contracted on the thermal side of things, so our contracts and prices with premiums are... are contracted for the majority of our coal. As I mentioned, if you wanted to sell uncontracted high CV coal into the market at the moment, the best you could get probably is GC flat outcome. That's what we're seeing. So that's our business. Our business generally, through realisations over time, we've said that In a flat market, then we will see GCNU perhaps a little better on average across our portfolio now that the Warris Creek quality has been removed and our Vickery tons are starting to come on. So that momentum should continue. But as I said before, prices being what they are, but we're not seeing any change in behaviour on the physical side of things. Our customers are honouring all their contracts and doing all the right things in that regard. So I think we're well positioned.

Okay, awesome, thank you. And maybe one for Kevin and just a bit of a clarification on the unit cost of the 137 in the first half. I just wanted to understand if that includes building unwinds of inventory costs, and if so, I guess the implication there being in the March quarter and second half of FY25, if we see a drawdown in inventory, is that going to have the, I guess, the inverse effect on those unit costs?

The way we do accounting for that is that inventory, we pick up a cost of goods sold, which includes the movement inventory. And if we build stocks, they come out at the average cost in that period. They go back in at the average cost in that period. So the cost, the movement inventory really just impacts the working capital coming through the cash flow, not necessarily the P&L. So the 137 is a full P&L cost for that period. Now, it includes, and you can see it on the back slides there. Dan, you can see the back slide in that pack that tells you what the mining costs were, what the selling and distribution costs were, what the admin was, et cetera. But I would only be thinking about inventory in terms of working capital and actual cash flow generation. And that's where it comes in to come in. But again, there's a level of stock we hold, generally speaking, and that really isn't a big mover in the numbers unless we've got some slippage from one quarter to another.

Yeah, perfect. Thanks, Paul. Thanks, Glenn. Appreciate your time.

Thank you.

We've run out of time there.

That concludes our question and answer session. I'll now hand back to Mr Flynn for closing remarks.

Thanks very much, everyone. I know everyone's got a busy day. Sorry for that going on. But the interest in the results and the company as well, appreciate it. Thanks very much. And if there's any further questions, we'll be seeing many of you over the coming days and weeks. Thanks very much.