Yancoal Australia Ltd

Good day, and thank you for standing by. Welcome to Yankol Full Year Financial Results 2023. I would now like to pass the call over to the Chief Executive Officer, David Malt.

Thank you, Carmen, and thank you to everyone for joining this briefing on Yankol's 2023 performance. I have the CFO, Kevin Hsu, and Company Secretary, Loris Yang, here with me in Hong Kong, and several of our executives have joined the call from our Sydney office. I will provide an overview of Yancol's 2023 performance, then we will open the webcast to questions. The commentary provided is based on the 2023 financial results and associated materials published on the ASX and Hong Kong Stock Exchange on Friday. Slides two and three contain notices and disclaimers relevant to today's presentation and the forward-looking statement it contains. Please make yourself familiar with the content of these two slides. This first slide gives a snapshot of the successful year we had. The first aspect I want to highlight is our safety performance. Through constructive programs and the concerted effort of all our people, key safety metrics improved sharply mid-year and have remained low. As I said six months ago, strong operational and financial results are built on workplace culture and a positive safety mindset. A 35% reduction in but in total your frequency rate is the result of our people embracing safety initiatives and working cohesively. Compared to 2022, 100% ROM production volumes were up 19% and saleable production volumes were up 12%. We met our guidance, but more notably was the trend of the production rate throughout the year. At the start of 2023, We said we needed to prioritise mine recovery plans and would increase output in each successive quarter. We delivered on these targets and in the fourth quarter we produced at our highest rate in three years. We want to carry this momentum into 2024 and I will talk more on this point when we discuss the 2024 outlook. Our average realised coal price for the year was 232 Australian dollars per tonne. Excluding 2022, This is double the average price received for the five years to 2021. A $96 per ton cash operating cost conceals the cost trend throughout 2023. As production volumes increased, unit costs improved. Cash operating costs in the second half decreased to $86 per ton. Many inflationary cost factors experienced over recent years are now embedded. making our three large-scale, low-cost mines more valuable than ever. An implied operating cash margin of $115 per tonne, combined with our production recovery, drove the strong financial outcomes. For 2023 report, $7.8 billion in revenue, $3.5 billion of operating EBITDA, and $1.8 billion in after-tax profits. As we discussed at the half-year result, we repaid the last of our loans in March and paid significant taxes on the record 2022 profit. After returning $1.4 billion to shareholders during the year via dividend, we still held $1.4 billion of cash at the end of December. On the topic of shareholder returns, the Board has elected to return a further $429 million to shareholders as a fully franked final dividend of 32.5 cents per share. Combined with the 37 cents per share interim dividend, the 2023 total dividend is 69.5 cents per share. This is a 50% payout ratio and a 14% yield on the $4.95 year-end share price. As I have mentioned, keeping our workforce safe is always our first consideration. The improvement in the total recordable injury frequency rate accelerated in the first half of the year. Having established a new reference, we worked hard to consolidate and maintain this level by embedding gains made across the mines. It was gratifying to see our leaders and workforce efforts recognized through Janko being named a finalist in the 2023 Australian Workplace Health and Safety Awards. Our focus on sustainability as with safety, is continual and ongoing. This year we are moving beyond the environment, social and governance report published in past years, and in April we replaced it with our first sustainability report, which integrates previous disclosures and begins our transition to align with international sustainability disclosures. We will follow Australian sustainability reporting standards as they develop, as well as the requirements of the ASX and Hong Kong stock exchanges. Existing initiatives include upgrades to our mining fleets and actively exploring new, excuse me, exploring renewable energy opportunities. Slide seven summarizes the operational drivers behind Yancol's 2023 performance. Four year production volumes and the uplift of over 2022 output do not truly reflect the momentum that built throughout 2023. Most of the 19% increase in attributable ROM production and the 14% increase in attributable saleable production was delivered in the second half. Attributable saleable production increased by 32% from 14.4 million tons in the first half to 19 million tons in the second half. This production skew resulted in cash operating costs falling by more than 20% in the second half. International coal market conditions were unprecedented in recent years. In all market settings, we optimize our position. This starts with our production profile and controllable costs. We continually seek to maximize our operational performance and product mix to meet our customers' needs. Turning to the coal markets, a slowing global economy and mild winter in the northern hemisphere diminished demand during 2023. A supply-side recovery compounded the downed pressure on coal indices, notably with Australian and Indonesian exports rising by 22% and 12% respectively. For the past year, we have considered the thermal coal markets remain relatively balanced, but subject to the influence of short-term factors such as seasonal demand drivers and supply disruptions, this still remains our view. Coal indices are currently trending sideways on the current market conditions and price differential for the indices now better reflect the inherent value of different coal types. North American supply disruptions lifted metallurgical coal indices mid-year before weak economic conditions set the tone for the remainder of the year. There were some localized bright spots in the met coal markets, demand from India for low volume but low volatile hard coating coal was good, which in turn was favorable for our low vol PCI products. Last year, 86% of our sales were thermal coal, with the balance being lower grade metallurgical coal. This product split varies a little year on year, depending on which coal seams we are mining at each mine. We aim to keep the mix stable and to maintain our reputation as a reliable supplier with our customers. Our thermal coal volumes range in energy content and ash level. The resumption of Australian coal imports by China in 2023 was a welcome event, with Chinese customers historically being a regular buyer of our higher ash thermal coal. Turning to slide 11, we show our customer split. China is once again a significant off-take partner, both on a volume and revenue basis. Our Japanese customers purchased a significant portion of our high value coal, resulting in this market being our highest revenue generator, but only our fourth in terms of volume. Another observation is the decrease in sales to Europe to almost zero. This is not surprising given shipping coal from Australia to Europe is only economic under exceptional circumstances like those we saw in 2022. Total ROM coal on a 100% basis increased by 19% to just over 60 million tonnes as mine recovery plans took effect and productivity levels improved. This volume includes a 30% increase in the second half over the first half and during the fourth quarter we operated at an annualised run rate of over 72 million tonnes per annum on a 100% basis. Although the La Nina cycle is behind us, we still encounter wet weather events regularly. Our investment in recent years on additional water storage capacity and pumping equipment now gives us a far greater ability to resume operations if there are heavy rain events. Our attributable saleable coal production increased 14% to 33.4 million tons. This also included a 32% uplift from first half To second half, a fourth quarter annualized run rate of almost 39 million tons per annum demonstrated that most of our mines were operating around capacity. As expected, our three large-scale tier one open-cut mines drove our production performance during 2023. While we rebuilt much of the mining inventory in 2023, elements of the mine recovery plan still require further effort over the coming months to ensure we continue operating around at our second half levels. Cash operating costs were $96 per ton. However, as I mentioned earlier, they were down to $86 per ton in the second half, a 21% improvement from the first half. While we are aiming for our cash operating costs to return to prior year levels, the days of producing coal with cash operating costs in the 60s to $70 per ton range are behind us. Cost inflation factors including labour, explosives, electricity and spare parts which were incurred over recent years are now largely embedded in our cost base and may only partially unwind, if at all. Operating costs also escalate naturally as mines mature, typically resulting in higher strip ratios and increased haul distances. That said, we have re-established our position at the low end of the operating cost curve where we see our natural competitive advantages. Turning to slide 15, we see the benefit of maintaining low cash operating costs. Our implied operating cash margin for the year was $115 per tonne. Excluding the record performance in 2022, this was a notable achievement. Keeping costs under control during periods of elevated coal price is more challenging than when prices are low, although not readily apparent in the full-year cash operating cost figure. it was a very good outcome in the context of the overall coal sector. State royalties may have declined from 2022 in line with lower coal prices, but $21 per tonne on 33 million tonnes of sales resulted in Yang coal paying almost $700 million to the New South Wales and Queensland state governments. From the 1st of July 2024, we'll be subject to a 2.6% increase in the New South Wales state government royalty rates on sales made by our New South Wales mines. Re-establishing our large scale, low cost production profile enables us to operate through all points in the coal price cycle. Slide 16 has our operational guidance for 2024. We aim to produce at a level similar to the second half of 2023. Production will vary quarter to quarter due to mine plan sequences, long haul moves and planned maintenance. and there is likely to be a second half skew to the production profile. The 35 to 39 million ton attributable saleable production guidance allows for some downside disruption events, and as the year progresses, we may tighten the low end of the range if nothing materializes. We aim to bring the cash operating cost per ton down from the full year 2023 level, and are aiming for $89 to $97 per ton. This range allows for ongoing cost inflation, the continued use of additional temporary equipment to complete mine recovery plans, as well as scheduled equipment lifestyle maintenance activities. Our capital expenditure guidance is $650 to $800 million and includes some of the 2023 budgeted activities that slipped into 2024. Throughout the year, we will continually balance volume, product quality, efficiency metrics, operating costs, and capital expenditure to deliver the best possible outcome. Slide 17 provides an overview of Yankov's 2023 financial performance. While key items in the income statement are lower compared to 2022, it must be remembered that 2022 was an exceptional year. When looking at the cash flow statement, initially the 81% fall in the operating cash flow stands out. But as I pointed out at the half-year results, this is after a tax payment of $1.4 billion due to our record earnings in 2022. In 2023, we made monthly tax payments on our earnings rather than one large tax payment. As noted at the start of the call, we held $1.4 billion in cash at the end of the year. We also have accrued $1.8 billion in tax franking credits. I will speak to the frank dividend payment in a coming slide. The two charts on this slide show the correlation between realized price, revenue, operating EBITDA, and the operating EBITDA margin. Given our production and operating cost profile, realized coal prices will almost always be the primary driver of our financial results. $3.5 billion of operating EBITDA and a 46% EBITDA margin are excellent outcomes and puts Yanko on the 12-month trailing EV to EBITDA ratio of about two times. The profit after tax and operating cash flow tend to replicate the revenue and EBITDA profiles. The step down in the operating cash flow incorporates a large one-off tax payments I mentioned earlier. The positive aspect of paying tax is franking credit accumulation, also mentioned a moment ago. The Board elected to repay the last of our interest-bearing loans during the first half And in total, we have repaid more than $3 billion of loans since late 2021. The loan repayments made over recent years have saved us almost $300 million in finance costs this year alone. The small difference between the cash position of $1.4 billion and the net cash position of $1.25 billion primarily relates to lease liabilities recognized on mining equipment. Once again, Yankovil is returning cash to shareholders via a fully franked dividend. Franking credits eliminate withholding tax from distribution to shareholders outside Australia. The Board has allocated $429 million to the 2023 final dividend. This is 32.5 cents per share. Combined with the 37 cents per share interim dividend, this is a 50% payout ratio for 2023, and represents a notional 14% yield when calculated on the ASX year-end share price of $4.95. Including the final dividend, we have distributed to shareholders $2.5 billion of unfranked and $1.8 billion of franked dividends, a total of $4.4 billion. This total is 67% of our $6.5 billion year-end market capitalization, or closer to 80% if you add back the franking credit. The remainder of the slides contain appendices and additional information for reference, which I do not intend to speak to. I will now hand back to Carmen so that we can commence the question and answer session. Thank you.

Thank you. And as a reminder to our audience, if you have a question, please press star 1-1 to get in the queue. To remove yourself from the queue, press star 1-1 again. One moment. So far, I don't see any questions.

Thank you, Carmen. I'll start taking some of the questions submitted via the webcast, and I'll come back to you momentarily to see if we have any phone line participants.

Thank you.

One of the first questions we have is from Joanne Lee, asking if we have any comment on the 2024-2025 forecast for coal price and how it relates to our cost profile.

Yeah, thank you, John, for that question. And I might get Mark Salem to come in and comment as well. But the coal price, as we said in the presentation, we believe is fairly balanced. It has come back from its exceptional highs a couple of years ago. But we still see the market is strong. The demand is still strong across the Asia-Pacific region. So we think there is significant support there to maintain coal prices at reasonable levels throughout 2024 and 2025. What I'd like to do is ask Mark if you'd like to come in and add any other comments on your view on the coal price.

Yeah, thank you, David. Look, I support all the comments you just made, David. that we are getting, we remain having strong demand. I think the big concern is going to be the supply that is coming through in terms of everyone's improving their production following the 2022 and 2023 years. And that's something that we're just going to watch very carefully. And that's why at the moment the prices have flattened out and that's likely to continue as the market remains relatively balanced.

Thank you, Mark. Thank you, David. The next question we have from Max Aiken asking us to reconfirm the dividend yield. Perhaps Kevin, I could ask you to comment on the dividend yield.

Thank you. Thanks. As we mentioned in the presentation, the payout ratio is 50%. A notional yield is 14%, which is benchmarked against the $4.95 at the end of 2023.

Thank you, Kevin. A follow-up question from Will King. Can we provide a comment on Yancol's intentions for the cash that remains on the balance sheet? Do we have any observation on the prospects for M&A, whether it be coal or other commodities?

Thanks, Will. I'll pass a comment to start with, and again, I'll hand over to Kevin to comment further. But on your last point on M&A, our team's very active and working extremely hard, and we're looking at opportunities all the time. So having cash available to support that is always useful. So we're working very hard on that side of it. I'd like Kevin... comment on capital management, but it's like everything else. We've repaid all our debt, we've returned significant funds back to shareholders, we've taken a prudent position at the moment in balancing our finances and our cash, because as we go forward, as you know, we're in a cyclic market and sometimes things change. And we could very quickly be in a market where our margins are squeezed very, very tightly. Anyway, Kevin, do you want any further comments to that?

Yes, David. I just want to confirm the mentioned position about the cash balance of $1.4 billion at the end of 2023, which is very high. We agree. And we can confirm we never intend to have very lazy balance sheets. As David mentioned, Normally the capital measurement covers three areas. We pay our debts, we distribute our dividend to our shareholders, and then we fund our growth project. Now we fully repaid everything. We believe we still provide a very decent yield to the shareholders, but we have to realize there's a challenging funding market for a coal company like ENCODE, so that's why with the growth you know, mindset for the management to pursue the other opportunities. We think it's prudent to keep a good cash balance in your balance sheet for 10B. Thank you.

Thank you, David and Kevin. Carmen, could I turn back to you and check if we have questions on the phone line?

So far, we don't. But as a reminder, to ask a question, press star 1-1.

Thank you, I'll continue with the webcast questions and I'll return to you momentarily, Carmen. Kevin, we have a follow-up question on dividend policy from Alan Munro. You mentioned we paid out to the policy. The question from Alan is, has the board considered any modification to the dividend policy?

Thanks, Alan. First of all, we confirmed we paid the dividends as per the policy, but so far as we know, at the bulk level, for now, I don't think we've been talking about changing the current guidance.

And moving on to another question from Kenneth Wan, looking at the production profile, Kenneth is interested in knowing what percentage of coal was linked to the Newcastle ICV6000 kilocalorie benchmark in 2023, and will that vary going into 2024? I think that's one for you, Mark.

Yeah, thanks, Dave. Thanks, Brendan. The variation will depend on production, but it will be very mild variations. At the end of the day, approximately of the thermal coal production that we have, approximately 40% is linked to GCNUC or a combination of GCNUC, and the balance is linked to API FARS.

Thank you, Mark. Looking at some of the other questions coming through, continuing on the concept of coal markets and product splits, From Alan Munro, is there a thinking that Yancol would want to increase their met coal production or assets as the proportion of total coal produced, and how would the company possibly achieve this if they wanted to move in that direction?

Thanks, Alan. I think we've always had a stated target of increasing our met coal percentage, and that's still the same, and we would still be very interested to see to add further MECCOL assets to our portfolio. We monitor very closely what's going off and what is available, and we look at the opportunities as they arrive. If there was the opportunity, then we would be looking very closely at it. So our position will not change on that. Yes, it would suit us to increase that percentage of MECCOL.

Thank you, David. On that topic of production profile, assets in the portfolio. A question from Stuart Harrison asking, where Yancol sits on the cost curve in relation to tiers at home and abroad?

Thanks, Stuart. I haven't seen the latest figures, but I do see what other companies announce publicly in their cost guidance. And I would suggest we are, if not the lowest cost producer in Australia, certainly one of the lowest cost producers or very close to being the lowest cost producer. And that's purely based on what we can see and how we, from the same as you do, from what's publicly available. It's very difficult to benchmark yourself with overseas producers for lots of different reasons. And I mean, Australia is not a low cost environment when it comes to employment and labor and everything else that goes with it. From a seaborne coal producing company that produces a good quality coal, I'm not now talking about Indonesian type coal, we're now talking about GCNU coal, I would suggest we're still a very, very competitive producer. even if you look at this on a global scale. But certainly from an Australian scale, we are, if not the lowest, one of the lowest producers in Australia.

Thanks, David. Another question on the topic of the cost profile. This one from Sarah Chan at Morgan Stanley. Sarah is looking for some more insight on the cost guidance for lowering costs in 2024 relative to 2023 and an observation on that sequential trend through the second half of 2023, and how we carry that forward into 2024.

Thanks, Sarah. What it shows you, I think, if you look at last year's performance, half and half, is how big an impact volume has on our operating costs, and that's basically what happened. I mean, we came out of a high inflation period, or we're coming out of a high inflation period, but the main driver of our efficiency is our volume. And that's what really pushed our cost down to that $86 per ton in the second half of 2023. As we said earlier on, as we get into 2024, our objective is to keep Our mine's operating at the upper performance level, which we were doing during that second half of last year, and we're looking to do that this year. So we'll continue the drive to take real costs out of the business, but the main driver is to get our volumes up and keep driving our mines the way that we did in the second half of 2023 as we go through 2024. Now, there is always the possibility of on-the-scenes light weather. And yes, we've been having some small weather events, but nothing compared to what we had a few years ago. So on the assumption that we have a normal type of year when it comes to external pressures, then I would see that continual improvement coming through over 2024.

Thank you, David. Carmen, could we take the opportunity to check for questions on the phone line?

Definitely, we do have a question. One moment, please. I'm trying to promote the line, sir. One moment. All right, the line comes from Wayne Fong with CMBI. Please go ahead.

Hi, thanks, management. This is Wayne. So my question is more on the cost side you just described. So can I say, so regarding the guidance, is it largely related to the production volume change? And what about other factors like the diesel price and other moving parts? What's your assumption in that to achieve this guidance? And also for the CapEx, so there is expected to be an increase of like 5% to 30% increase in the CapEx. So which projects would you spend the CapEx on? Thanks.

Okay, thanks, Wayne. On the cost one, just to reiterate what I said, yes, a lot of it's to do with volume, but also we put on additional costs over the last year to recover our mines from the low inventory levels we had after the bad weather. So as this year progresses, we'll be looking at removing some of those additional costs from our operations as well. So we've got a volume impact on unit costs, which I think will be very extremely positive, but also as we start to get ourselves back to our normal operating inventory levels, then we'll be removing other costs from each, and mainly from our big mines, because it's the three big tier one mines that we put on additional equipment to achieve that recovery. On the CAPEX side, if you remember in 2023, we had a guidance where we actually came in on our spend. So there is a rollover of capital from 2023 into 2024, which is the 2024 year. And the majority of that is associated with updating our mining fleets. We change our equipment based on operating hours, on a time-based system and at our big mines, and I think we talked about this at previous calls last year, at our big mines at Mount Foley and Hunter Valley operations, when we bought them from Rio that had no capital spent on them for many, many years. So both of those are into a process of upgrading equipment, and that will continue in this year. So it's sustaining capital. The majority, well, all of it. but the majority of it is associated with refreshing our equipment and bringing new equipment in at our large tier one operations.

Thanks, very clear. Thank you.

Thank you. You may continue. I don't have any other questions over the phone.

Coming back to the webcast questions and the topics of dividend and capital management, there are Two questions here, I'll combine them, Kevin. The first one is an observation that the second half dividend was lower than the first half. Could we comment on the split between the two dividends through the 2023 year? And an extension on that topic of dividends, the question before was already asked about a change in the dividend policy to a higher level, but also the comparative options of dividends alternate uses of capital as we contemplate the use of the balance sheet.

Thanks, Brandon. First of all, the question relates to the first half and the second half. Actually, in 2023, this was very straightforward. It is simply based on 50% of NPIT. So the first half NPAT was higher due to better prices what we have received. As a result, we distributed more in the first half and accordingly the second half also strictly following the 50% NPAT as I mentioned earlier. And then just continue on this dividend distribution discussion. One thing I want to remind here, Yanko's commitment is not only 50% NPAT. We actually buy to a 50% NPAT or 50% free cash flow, whichever is higher. So in 2023, the year happened to be the NPAT is a lot higher than free cash flow. And as a result, we choose the higher option. And in certain years, And previously, as many investors already realized, some years Yanko did distribute higher than just because basically in that year free cash flow was higher. On that basis, so the net return normally received by the investors is restricted by the 50% NPAT. I think this question was asked to Debbie previously. I will maintain to the investors. For now, with Yanko only have about around 24% to 25% freeholding in all the shareholdings, we will intend to avoid share buyback to try to better improve our freeholding in our shareholder structure. Thanks.

Thanks, Kevin. And one of the shareholders, Zhao Ting, asking for confirmation with the dividends. Are they still withholding tax-free? And does our policy or expectation for fully frank dividends continue into the future?

To confirm, yes, the dividend is fully franked. The whole 2023, $924 million dividend total distribution, all fully franked. And as what we have discussed in disclosing this announcement, the YANCO has about a $1.8 billion credit balance. And this franking credit balance is very more than sufficient to support a very sizable future, a fully franked dividend distribution. And Yanko will confirm Yanko still continuously paying more to the Austrian government, which means the franking credit will be keep accumulating. Thanks.

Thank you. Carmen, one more check, any questions?

Not at this time, sir.

Okay. Returning to the topic of mergers and acquisitions, we mentioned the concept earlier. Excuse me. One of the shareholders, Royce Kennedy, is curious to know if we're primarily focused on coal assets, non-coal assets, potential renewable energy scenarios,

Thanks, Rob. Renewables, we're at the moment actively looking at an organic site, which is one of our old mines, which we're looking at building potentially a renewable energy hub on. So we're not actually out there looking to acquire renewable energy companies, but we're looking at repurposing one of our sites on renewable energy. On the others, which is met coal assets, coal assets and other minerals, we're looking at both. Met coal, like always, will be easier for us because it fits with our portfolio. We are a coal mining company and we've got a lot of expertise in that area and we'll continue to look for opportunities as they arrive. We're also looking at our Organic growth and people may remember a few years ago. We have For a few years ago a potential underground project that we're looking at currently Which would give us some more organic growth In the coal in the coal sector as well on other minerals we've gone for years of building our knowledge base and understanding and trying to really get that that intelligence into building the end goal, and we'll continue to look. And if opportunities arise, we would be interested and potentially would look at moving on them. We're not intending to bite off more than we can chew. We are very sensible with what we're doing. It's really looking at a way of diversifying the company in a sensible way to add value to shareholders. But as with all M&A, It has to be accretive and really it has to be something that gives hard shareholder value.

Thank you, David. Continuing on that theme, Stuart Harrison asks if there are any restrictions that would apply to Yancol's potential growth scenarios. And asks that question in the context of how our current portfolio of assets is positioned with regard to mine life. from the existing reserves and resources. Okay.

I don't see any restrictions. There are some countries in the world where the foreign investment review process may be easier than others. We do have a 60% Chinese shareholders as you're aware. So we have to be aware of that. But in Australia, we don't think that is a of major concern and certainly we don't see it as something that should stop us in the future. What was the second one again?

Sorry. And how does it relate in terms of our existing portfolio of assets and resources in the mine life?

Well, mine life, as with a lot of Australian companies, as we get towards 2040, the number of operating mines in Australia, you've got to quite considerably, not just Yankel, I mean that's across the whole of the industry because there is no new mines being developed at the moment and of course if there were the financing of new coal mines in Australia is very difficult as well. With our own profile Hunter Valley Operations is our longest life mine and has a life well into past The other mines start to come towards the end of their reserve life as we get towards 2040. One of the drivers for us is to get replacement capacity come in on stream so that we've got continuity of our business going into the future. So that's what we're really looking for at the moment, and that is really bringing on new opportunities as we can get them to ensure that as some of our older mines start to come to the end of the life, we're replacing that capacity to maintain and sustain Yankola for the future. Thank you, David.

Continuing on with the webcast questions, Could we reiterate our focus for the coming 2024 year and our primary objectives?

2024 year, our focus really is to reestablish all of our mines at their optimum production levels. And we always push our mines to their capacity. So when we're talking about optimum production levels, we're talking about either reaching approval capacity or our operating capacity at our operations. So the focus this year is really to get volume up and re-establish Yankole exactly where it was prior to the rain events the last couple years. Thank you.

On the topics of the dividend, one of our shareholders has made the observation that the franking account could support a special dividend or an additional dividend. Do we have some comment on the utilization of the franking credits at this time or looking forward?

For year 2023, I think the position is very much confirmed. 924 meaning in total, fully franked. For the future years, I can't make comments. It really depends on the future carbon management priorities. We at Yanco appreciate the kind of challenging and difficult funding environments, and we also focus on the growth opportunities. We believe as a company, we have to grow, and we have to make sure we have sufficient liquidity to support such growth. So for that reason, for now, I think the current distribution of dividend is prudent, but I will remind, be open to all options in future. Thank you.

Thank you, Kevin. We've got a question related to our production profile and expansion from Daniel Pogson. If the New South Wales Biodiversity Conservation Act of 2016 has impacted expansion in any of the New South Wales mines, significant extent.

Thanks for the question. I'll just pass a very quick comment, but I might ask Marc Jacobs, who's on the line, who looks after all our approvals and government relations, to comment as well. My easy answer is no, it hasn't, I don't believe, constrained any of our current operations, and we're not seeing any any major impact. It's like all of these types of changes to legislation, though. It puts another layer of difficulty in there when it comes to achieving approvals for mining up wells. So, Mark, is there anything you want to comment on?

So, Mark Jacobs here confirmed that biodiversity changes have not impacted any of the current operations or any of the current approvals. but it adds a layer of complexity to forward-looking approvals and is likely to be more time-consuming to obtain those forward approvals. But we don't see any impacts to current operations or to operations in the near term.

Thank you, Mark.

I have one last question on the webcast at the moment, so a quick reminder to anyone, if they want to submit a question, nine minutes time the question coming through relates to the renewable energy hub that's potentially considered is it too early to comment on a capex profile at this time given the stage of assessment I think the easy answer is yes we are halfway through the feasibility we still do geotechnical

drilling work firming up all the details and of course the details of that feasibility will ultimately drive the design which will ultimately drive the capital profile so I think yes it's a bit early for me to comment on the capital profile for that project at the moment.

Understandable thank you David. A quick reminder that all the people on the webcast if you want to submit a question please do so now If not, I'll be handing across to David for closing comments shortly. I'll stand by briefly to give you a moment for questions over here. I don't see any other questions coming through on the webcast. I have confirmation from Carmen, no more questions on the phone line. David, could I hand back to you for closing comments?

Thanks, Brendan. I'd like to thank everybody for all your time this morning. I think listening to Janko's 2023 performance was a good year for us. It was a year that it would be, but we achieved everything we said we were going to achieve and we've gone into 2024 with a momentum that I will see that we will continue to drive us back to that performance level that we had pre all the rain events of the previous year. As always, Brendan Fitzpatrick is available. Details are on the presentation if you have any questions that come in afterwards. Good questions this morning and a good diversity of questions. So I'd like to thank everybody for your involvement. We look forward to an excellent 2024.

Thank you, David. Carmen, could I hand back to you to close the webcast, please?

Thank you, everybody, for participating in today's conference. You may now disconnect.