Yancoal Australia Ltd

Welcome to Yanko Australia first quarter 2024 report conference call. At this time, all participants are in the listen-only mode. After the speaker's presentation, there will be a question and answer session. To ask a question during the session, you need to press star 11 on your telephone. You'll then hear an automated message advising your hand is raised. You may also submit written questions via the ask questions column on the webcast portal. Please be advised that today's conference is being recorded. I'll now like to hand the call over to Mr. David Malt, Chief Executive Officer. Thank you. Please go ahead.

Thank you, Desmond, and thank you to everyone on the call for joining this briefing on Yancol's first quarter production report for 2024. I'm joined on the call by several members of the Yancol executive team, including our Chief Financial Officer, Kevin Su, Executive General Manager, Marketing, Mark Salem, and our Executive General Manager, Environment and External Affairs, Mark Jacobson. I will give a summary of the first quarter activities, then open the call to a question and answer session. My comments are based on the quarterly production report published to the Australian Securities Exchange and the Stock Exchange of Hong Kong yesterday, the 18th of April. There is no presentation packed for this conference call. The ANCOR website holds past presentations for any participants who require additional information on the company. We have started the year well and will look to build on the first quarter performance. I'd like to acknowledge the dedicated people at all of our mine sites who have driven our performance this quarter. The total recordable injury frequency rate, which is 5.9 at the end of March, remains well below the industry average of 8.4. Continued support from everyone for our safety initiatives is a key factor in the overall success of the company. In the first quarter, our cash balance increased to 260 million Australian dollars, increased by 260 million Australian dollars. This increase in cash is after payment of all our operating capital and corporate costs, including our monthly tax payments. At the end of the quarter, we held almost 1.7 billion Australian dollars. We will pay the fully franked 2023 final dividend of 429 million Australian dollars at the end of April from that cash balance. After the dividend payment, we will still hold more than 1.2 billion Australian dollars, the equivalent of over 15% of our current market capitalization. The cash accumulation was driven by a realized coal price of 180 Australian dollars per ton. The realized price was roughly double the cash operating costs we are targeting this year. And as such, we continue to generate a strong operating margin. Coal markets, particularly thermal coal markets, face declining conditions in recent months. Demand was soft due to the warm northern hemisphere winter and a soft global economy. And at the same time, supply was elevated by export recovery from Australia, Indonesia and other regions. In the context of these factors, we view the modest decline in coal indices over recent months as a positive outcome. It suggests to us coal markets are relatively balanced and remain subject to short-term drivers and trader sentiment. 8.8 million tonnes of attributable saleable production represents an increase of almost 50% from the same period last year. Effective execution of our mine recovery funds through 2023 has re-established our production profile over the past 12 months. As we anticipated, first quarter production was lower than the preceding quarter. The holiday period and seasonal rainfall typically impact the operations at this time of year. 8.3 million tonnes of attributable sales lagged our attributable production by half a million tonnes. The timing of shipments and reduced trade into China during the Lunar New Year period influenced the sales. Production and sales tend to swing quarter by quarter, but we expect them to balance out over the course of the year. As indicated previously, we project our 2024 production profile will be weighted towards the second half. The 2024 production guidance issued in February is unchanged. We are targeting 35 to 39 million tons of attributable saleable production at a cash operating cost of $89 to $97 per ton. Our large scale low cost coal production profile is well suited to the current coal market conditions. Having no interest bearing loans, a large net cash position and robust operating margins gives us the capacity to act should suitable expansion or acquisition opportunities arrive. If such an event materializes, we will inform the market. In the meantime, we're focused on consolidating the production recovery delivered last year, closely managing our controllable cost element and maintaining our position as the leading large-scale, low-cost producer of export quality coal. That concludes the summary of Yancor's first quarter performance. We'll now move to the question and answer session, starting with questions from the phone and moving on to questions submitted by the webcasts. I'll now hand back to Desmond, who will initiate the process for the question and answer session in the first instance of the phone. Thank you. Thank you.

As a reminder, to ask questions on the phone, please press star 11. Currently, no questions from the phone line. Please continue.