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01/11 12:00
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Access earnings results, analyst expectations, report, slides, earnings call, and transcript.
The earnings call reveals several challenges: rail logistics issues, protester activity, and coal price volatility, leading to a 27% drop in EBITDA. Despite a share buyback and interim dividend, the market outlook is cautious due to these operational constraints. The Q&A highlighted management's vague responses on key operational issues, further dampening sentiment. With a market cap of approximately $1.65 billion, these negative factors are likely to outweigh the positive aspects, resulting in a projected stock price decline of -2% to -8% over the next two weeks.
Underlying EBITDA $155,000,000, down 27% year-over-year, largely due to a softening of coal price.
Average Realized Price AUD148 per tonne, a 7% decrease year-over-year.
FOB Cash Cost (Bengala Mine) $75 per sales ton, a 2% improvement year-over-year.
Available Cash Balance $659,000,000 post dividend payment, supporting a share buyback of up to $100,000,000.
Interim Dividend $0.19 per share, totaling $161,000,000.
New Ackland Mine Production: Increased run of mine guidance but reduced saleable production due to rail issues.
Maxwell Mine Production: Ramp up progressing well, with significant improvements expected in early 2026.
Coal Sales: Totaled 2,700,000 tonnes, a 3% increase from the previous quarter.
Forward Sales Book: 70% of production locked in for the next six months, primarily pegged to the 6,000 index.
Safety Metrics: 12-month rolling average TRIFR improved to 3.65, an 11% improvement.
Operational Efficiency at Bengala Mine: Achieved an FOB cash cost of $75 per sales ton, a 2% improvement.
Share Buyback: $100,000,000 buyback program announced, supported by strong liquidity.
Dividend Policy: Continued focus on rewarding shareholders with fully franked dividends.
Rail Capacity Constraints: The New Acland mine is experiencing constraints with rail capacity, leading to product stockpiles nearing maximum capacity. This has resulted in a revision of the mine's FY 2025 physical volumes.
Logistics Challenges: Downstream rail and port logistics are significant impediments to consistent performance at the Bengala mine, exacerbated by recent heavy rains causing congestion at the port.
Protester Activity: Potential upcoming protester activity could further impact rail logistics and operations.
Coal Price Volatility: The company has faced a 27% decline in underlying EBITDA due to softening coal prices, with the average realized price decreasing by 7%.
Market Conditions: The company acknowledges the volatile global market and local challenges, which could affect future performance and guidance.
Shared Rail Line Issues: The shared rail line for coal transport is causing delays and capacity issues, impacting the ability to ramp up production.
Cross River Rail Project Delays: Delays in the Cross River Rail project are expected to impact the company's ability to ramp up production due to required shutdowns.
Lower Coal Yields: Current coal yields are lower due to the mining of high ash products, with expectations for improvement as operations transition to new pits.
Safety Improvement: The twelve month rolling average TRIFR improved by 11% to 3.65, indicating a focus on safety.
Production Performance: Achieved 16.3 million BCMs of prime overburden moved, a 10% increase, and 4 million tonnes of run of mine production.
Cost Control: Maintained FOB cash cost of $75 per sales ton at Bengala mine, a 2% improvement.
Share Buyback: Announced an on-market share buyback of up to $100 million.
New Acland Mine Guidance: Revised FY 2025 physical volumes due to rail capacity constraints.
Coal Yield Improvement: Expect yield improvements as operations transition to the Mani Val West Pit in 12-18 months.
Maxwell Mine Ramp Up: Production expected to significantly increase in early 2026 with the longwall operation.
Revenue Expectations: Locked in approximately 70% of coal production for the next six months, primarily pegged to the 6,000 index.
Capex Management: Focus on deferring capital expenditures that do not impact safety or production targets.
Dividend Expectations: Expect dividends to flow in a timely manner once the longwall at Maxwell mine is operational.
Market Outlook: Current coal prices are lower than long-term averages, but the company is well-positioned to manage market volatility.
Interim Dividend: $0.19 per share for a total of $161,000,000
Share Buyback Program: On-market share buyback of up to $100,000,000 announced during the quarter.
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