Financial Performance - Yancoal achieved a record revenue of AUD 5.4 billion in 2021, with an EBITDA of AUD 2.53 billion, reflecting the company's strong operational performance during a challenging year[10]. - The company reported a net profit after tax of 791 million AUD for the year ended December 31, 2021[195]. - The operating profit before tax rose from a loss of AUD 218 million in 2020 to a profit of AUD 1,413 million in 2021, a 746% increase[175]. - The total revenue for the year ended December 31, 2021, was reported at 6,146 million AUD, a decrease from 6,163 million AUD in the previous year[198]. - The company reported a significant increase in revenue, achieving a total of AUD 1.2 billion for the fiscal year, representing a 15% year-over-year growth[62]. - The company achieved an operating EBITDA of AUD 2,531 million in 2021, with an EBITDA margin of 46%, up from 21% in 2020[45]. - The average actual selling price of metallurgical coal reached AUD 160 per ton, reflecting a 41% increase from the previous year[25]. - The average selling price of self-produced thermal coal rose from AUD 76 per ton in 2020 to AUD 134 per ton in 2021, an increase of 76%[152]. - The average cash operating cost per ton rose from AUD 59 in 2020 to AUD 67 in 2021, influenced by uncontrollable factors such as rising diesel prices and increased demurrage costs[45]. Production and Sales - The company sold 47.5 million tons of coal, with a sales volume of 37.5 million tons, while metallurgical coal sales increased from 11% to 15% of total sales[10]. - The company reported a total coal production of 3.7 million tons, with a significant increase of 50% compared to the previous period[24]. - Coal production decreased from 68.1 million tons in 2020 to 63.2 million tons in 2021, representing a decline of approximately 7%[135]. - The attributable sales volume for the year was 37.5 million tons, a 1% decrease from the previous year, with an increase in the ratio of coal to thermal coal[45]. - The company anticipates further growth in 2022, supported by its diversified asset portfolio and commitment to operational excellence[6]. - The projected coal production for the next fiscal year is expected to reach 4 million tons, indicating a growth strategy in response to market demand[24]. Cost Management - Operating costs per ton were AUD 67, with cash costs increasing by approximately AUD 3.50 per ton due to external factors such as rising diesel prices and adverse weather conditions[10]. - The average cash operating cost was AUD 114 per ton, which is significantly lower than the average selling price, ensuring healthy profit margins[25]. - The average cash operating cost per ton increased from AUD 59 in 2020 to AUD 67 in 2021, primarily due to wet weather in New South Wales and rising diesel prices[132]. - The company experienced a significant shift in sales distribution by customer region, with a 17% increase in sales to major Asian shipping markets[154]. Community and Environmental Initiatives - Total community donations in 2021 amounted to AUD 1.4 million, supporting various community initiatives and organizations[11]. - The company is committed to maintaining its ESG performance, which will be detailed in the upcoming ESG report[11]. - The company invested AUD 1.4 million in community support programs, positively impacting local health, environment, education, arts, culture, and community activities[39]. - Yancoal is preparing for a transition to a low-carbon economy by replacing diesel-powered mining equipment with electric alternatives and introducing renewable energy sources[39]. - The company aims to achieve zero harm in its operations, adhering to strict safety and environmental standards[35]. Strategic Initiatives and Future Outlook - Yancoal plans to diversify into renewable energy projects and other minerals to ensure long-term sustainability, aligning with global trends towards decarbonization[7]. - The company is focused on optimizing its sales strategy and enhancing product quality to better meet customer demands, particularly in high-end markets like Japan and South Korea[5]. - The company plans to expand into other minerals and commodities both domestically and internationally[11]. - The company is exploring opportunities in potash exploration licenses in Canada[56]. - The company is open to acquisitions of other mining assets or diversification into other minerals, energy, or renewable energy projects, subject to careful evaluation and board approval[45]. Governance and Management - The company has a strong management team with extensive experience in the coal mining industry, including the CEO and CFO[15][16]. - The board is responsible for overseeing risk management and financial investment decisions, including those related to climate change[41]. - The board emphasized the importance of corporate governance and compliance with regulations for listed companies[56]. - The management team has extensive experience in financial control and corporate governance[56]. - The company has established a register for interests and short positions as required by the Securities and Futures Ordinance[73]. Safety and Compliance - Yancoal Australia reported a total recordable injury frequency rate (TRIFR) of 8.4, an increase from 7.41 at the end of 2020, but still below the industry weighted average of 10.22[37]. - The company's safety performance was below the industry average, with a rolling TRIFR of 8.4[77]. - The TRIFR increase was attributed to the re-inclusion of the Watergong underground asset into the group's performance metrics[37]. - The company has implemented strict governance processes to improve its environmental, social, and governance performance[141]. Financial Stability and Debt Management - The company reduced its debt ratio to 24% and resumed dividend payments to shareholders[11]. - The debt-to-equity ratio improved from 41% at the end of 2020 to 24% by December 31, 2021, following the repayment of USD 500 million in debt[45]. - The company reported a net debt level that has returned to manageable levels, enhancing financial stability[26]. - The company has a commitment letter from Shandong Energy to support its operations and ensure solvency as long as it holds at least 51% of the company's shares[188].

Financial Performance - Total revenue for the six months ended June 30, 2021, was AUD 1,775 million, a decrease of 10% compared to AUD 1,969 million for the same period in 2020[3]. - Loss before tax (excluding non-recurring items) was AUD 177 million, compared to a loss of AUD 45 million in the previous year, representing a 293% increase in loss[3]. - Loss after tax (excluding non-recurring items) was AUD 177 million, compared to a profit of AUD 593 million in the previous year, indicating a 130% decline[3]. - Basic loss per share (excluding non-recurring items) was (9.8) cents, a 250% increase in loss compared to (2.8) cents in the previous year[4]. - The net loss attributable to shareholders was AUD 129 million, a significant decline from a profit of AUD 605 million in the first half of 2020, representing a 121% decrease[50]. - EBITDA for the first half of 2021 was AUD 341 million, down 17% from AUD 1,088 million in the previous year, resulting in an EBITDA margin of 19%[47]. - Operating EBITDA for the first half of 2021 was AUD 406 million, with an EBITDA margin of 23%, slightly down from 25% in the first half of 2020[15]. - The company reported a net loss before tax of AUD 177 million for the six months ended June 30, 2021, compared to a profit of AUD 593 million in the same period of 2020[129]. - The company reported a total of AUD 344 million in customer contract receivables as of June 30, 2021, up from AUD 223 million at the end of 2020[134]. Production and Sales - Coal production decreased by 11% to 29.3 million tons in the first half of 2021 compared to the same period in 2020, while salable coal production fell by 10% to 23.2 million tons[13]. - Revenue decreased by 10% to AUD 1,775 million in the first half of 2021, primarily due to an 8% reduction in coal sales[15]. - Coal sales volume fell by 8% from 17.8 million tons in H1 2020 to 17.2 million tons in H1 2021, attributed to a 5% reduction in available coal production and adverse weather conditions[55]. - The total saleable coal production from the company's major assets decreased from 16.8 million tons in the first half of 2020 to 15.4 million tons in the first half of 2021, reflecting an 8% decline[39]. - The proportion of thermal coal sales decreased from 85% in the first half of 2020 to 80% in the first half of 2021, impacting the overall pricing dynamics[35]. - The metallurgical coal production increased by 32% from 2.8 million tons in the first half of 2020 to 3.7 million tons in the first half of 2021, indicating a shift in production focus[39]. Costs and Expenses - The average cash operating cost increased from AUD 63 per ton in the first half of 2020 to AUD 66 per ton in the first half of 2021, influenced by rising diesel prices and production disruptions due to wet weather[13]. - The overall average cash operating cost per ton increased from AUD 63 in the first half of 2020 to AUD 66 in the first half of 2021, primarily due to wet weather in New South Wales and hard rock intrusion at Morabbin[36]. - Employee benefits decreased by 4% to AUD 284 million from AUD 295 million in the previous year[47]. - Transportation costs increased by 5% to AUD 289 million compared to AUD 276 million in the same period of 2020[47]. - Coal procurement expenses dropped by 51% from AUD 199 million in H1 2020 to AUD 97 million in H1 2021, mainly due to climate factors limiting procurement opportunities[74]. Shareholder Returns - No dividends were declared for the current financial period, compared to AUD 280 million or 21.21 cents per share in the previous year[6]. - The company reported a net financing cost of AUD 121 million, which increased by 52% compared to AUD 109 million in the previous year[47]. Market Conditions - The coal market and benchmark coal prices have shown significant improvement over the past six months due to favorable global economic conditions and international coal trade[18]. - The average API5 price was USD 60 per ton during the period, with a closing price of approximately USD 76 per ton[14]. - The company plans to enhance the production of higher-quality thermal coal to capture more price arbitrage between API5 and GCNewc indices[14]. Environmental and Safety Compliance - The total recordable injury frequency rate (TRIFR) increased to 8.4 from 7.4 in the previous year, although it remains below the industry average of 11.13[11]. - The company has implemented strict environmental approvals and processes to ensure compliance with regulatory requirements[11]. - The group has implemented systems and processes to manage compliance with environmental approvals and permits, with ongoing improvements and third-party audits[44]. Strategic Initiatives - The company aims to increase salable coal production to approximately 21.5 million tons in the second half of 2021[13]. - Yancoal is open to acquisitions of other mining assets and diversifying into other minerals, energy, or renewable energy projects[17]. - The company continues to assess its product portfolio and market conditions to align with customer needs and maximize operational profits[18]. - The company continues to seek quality acquisition opportunities and focuses on internal growth strategies[102]. Financial Position - The company has cash and cash equivalents of AUD 539 million as of June 30, 2021, with over AUD 800 million in undrawn debt facilities[16]. - Total assets decreased by AUD 178 million to AUD 10,877 million, mainly due to amortization leading to a decrease in mining rights of AUD 151 million[94]. - Total liabilities decreased by AUD 210 million to AUD 5,652 million, reflecting a reduction in interest-bearing liabilities by AUD 230 million[94]. - Total equity increased by AUD 32 million to AUD 5,225 million, primarily due to an increase in contributed equity of AUD 216 million[94]. Governance and Compliance - The company has adopted the corporate governance code as part of its policies since its listing on the Hong Kong Stock Exchange on December 6, 2018[20]. - The independent auditor confirmed compliance with independence requirements during the review period[32]. - The financial statements for the half-year ended June 30, 2021, were not audited but reviewed by the audit and risk management committee[28].

[Company Overview](index=2&type=section&id=Company%20Overview) [Chairman's Address](index=14&type=section&id=Chairman's%20Address) The Chairman reviewed a challenging 2020, highlighting the company's resilience through cost reduction and expressing confidence in future diversification - In 2020, the company faced three major challenges: the COVID-19 pandemic, a cyclical downturn in the coal market, and trade disruptions in Asia; despite weak coal prices, the company responded by improving operational efficiency[31](index=31&type=chunk)[602](index=602&type=chunk) - The company's contributions to community groups and organizations reached **AUD 2.2 million** in 2020, a **38% year-on-year increase**[31](index=31&type=chunk)[602](index=602&type=chunk) - The company's future strategy includes seeking expansion and potential diversification beyond coal into other mineral, energy, or renewable energy projects[32](index=32&type=chunk)[603](index=603&type=chunk) [CEO's Address](index=16&type=section&id=CEO's%20Address) The CEO reported achieving all operating targets in a challenging 2020 through cost reduction and market diversification, despite a 26% drop in coal prices 2020 Key Operating and Financial Indicators | Indicator | 2020 | 2019 | | :--- | :--- | :--- | | Average Coal Realized Price | AUD 82/tonne | AUD 111/tonne (-26%) | | Operating Cash Cost | AUD 59/tonne | AUD 64/tonne | | Attributable Marketable Coal Production | 39.3 million tonnes | - | | Operating Cash Flow | AUD 605 million | - | | Year-end Cash Balance | AUD 637 million | - | | EBITDA | AUD 748 million | AUD 1.72 billion | | EBITDA Margin | 21% | 14% (2016) | - To counter Asian coal trade disruptions, the company successfully redirected sales to emerging markets, exporting to **19 countries** in 2020[36](index=36&type=chunk)[607](index=607&type=chunk) - Significant investments in 2020 included acquiring an **additional 10% stake in Moolarben** and a **USD 775 million financing arrangement** with Yankuang Group for Watagan restructuring[37](index=37&type=chunk)[608](index=608&type=chunk) [Management Team](index=18&type=section&id=Management%20Team) The report introduces key management team members, including the Executive Director, CEO, and CFO, highlighting their extensive industry experience - Management changes in 2020 included the appointment of Mr. Zhang Ning as Executive Director, Vice Chairman, and Chairman of the Executive Committee, Mr. David Moult as CEO, and Mr. Su Ning as CFO[41](index=41&type=chunk)[42](index=42&type=chunk)[43](index=43&type=chunk) [Business and Asset Portfolio](index=20&type=section&id=Business%20and%20Asset%20Portfolio) The company holds a diversified portfolio of low-cost coal mining assets across Australia, detailing each mine's economic interest, production, and reserves 2020 Overview of Major Mine Assets (100% Basis) | Mine Name | Economic Interest | 2020 Marketable Production (million tonnes) | Marketable Reserves (million tonnes) | Implied Mine Life (years) | | :--- | :--- | :--- | :--- | :--- | | **Moolarben** | 95% | 19.7 | 201 | 10 | | **Mount Thorley Warkworth** | 82.9% | 11.9 | 188 | 16 | | **Hunter Valley Operations** | 51% | 12.0 | 640 | 53 | | **Yarrabee** | 100% | 3.0 | 37 | 12 | | **Watagan (Ashton)** | 100% | 1.8 | 11 | 6 | [Financial and Operational Highlights](index=22&type=section&id=Financial%20and%20Operational%20Highlights) The report highlights 2020's key financial and operational metrics, showing maintained operating margins through cost reduction despite lower coal prices, and a prudent dividend policy - In 2020, the company successfully reduced cash operating costs to counter declining average coal selling prices, aiming to maintain operating margins[66](index=66&type=chunk) - **2020 operating EBITDA and margins** were significantly higher than in 2016, reflecting five years of efficiency improvements despite similar coal prices[36](index=36&type=chunk)[70](index=70&type=chunk) - After distributing over **AUD 900 million in dividends** in the prior two years, the company adopted a prudent dividend policy in 2020 due to market challenges[70](index=70&type=chunk) [Business Strategy](index=24&type=section&id=Business%20Strategy) The core strategy focuses on leveraging tier-one assets for robust cash flow, strict capital allocation for growth and debt reduction, and potential diversification beyond coal - The core strategy is to generate robust cash flow through efficient operations and strict capital allocation to support growth, debt reduction, and shareholder returns[75](index=75&type=chunk) - The company is open to future growth, potentially diversifying into other mineral, energy, or renewable energy projects beyond coal[75](index=75&type=chunk) [Environmental, Social, and Governance (ESG)](index=25&type=section&id=Environmental,%20Social,%20and%20Governance%20(ESG)) The company views ESG as fundamental to its success, outlining 2020 initiatives on climate change, mental health, and Indigenous heritage, and detailing its economic contributions to Australia - The company considers ESG crucial for business success, developing strategic ESG issues in 2020 including climate change, mental health, and Indigenous cultural heritage[81](index=81&type=chunk) 2020 Economic Contributions to Australia | Contribution Type | Direct Impact | Indirect & Total Impact | | :--- | :--- | :--- | | **Value-Added Impact** | AUD 2.9 billion | AUD 7.4 billion | | **Employment Provided** | ~4,300 | ~38,200 | | **Wages & Salaries** | AUD 656 million | AUD 2.9 billion | | **Government Tax Contribution** | AUD 506 million | - | - In 2020, the company donated **AUD 2.2 million** to **135 community groups** through its support program, primarily for social and community (58%) and education and training (21%) initiatives[86](index=86&type=chunk)[88](index=88&type=chunk) [Board of Directors' Report](index=32&type=section&id=Board%20of%20Directors'%20Report) [Operating Review](index=32&type=section&id=Operating%20Review) The operating review covers 2020's key activities, focusing on safety performance, community investment, and greenhouse gas emissions, which totaled 1.89 million tonnes CO2e - At 2020 year-end, the company's Total Recordable Injury Frequency Rate (TRIFR) was **7.4**, outperforming the industry weighted average of **8.4**[93](index=93&type=chunk) - Total Scope 1 and 2 greenhouse gas emissions for the period ended June 30, 2020, were **1.89 million tonnes of CO2 equivalent**, a **3% change** from the prior year[95](index=95&type=chunk) [Operations](index=33&type=section&id=Operations) The company operates nine coal mines, exporting to Asia with ample port capacity, and holds brownfield expansion projects while remaining open to diversification into other energy projects - The company has ample infrastructure support, holding **30.0% and 27.0% stakes in PWCS and NCIG** at Port of Newcastle, respectively, with a combined port allocation capacity exceeding **54 million tonnes per annum**[97](index=97&type=chunk) - Potential growth projects include a Warkworth underground mine with a potential annual production of **5 million tonnes**, and Moolarben expansion approvals to increase run-of-mine annual production to **24 million tonnes**[98](index=98&type=chunk) [Corporate Activities and Dividends](index=33&type=section&id=Corporate%20Activities%20and%20Dividends) In 2020, the company acquired an additional 10% stake in Moolarben for AUD 300 million, regained control of Watagan, and paid a 2019 final dividend of AUD 280 million, but declared no 2020 dividends due to market conditions - The company paid a **final dividend of AUD 280 million** in April 2020 but declared no interim or final dividends for 2020 due to challenging market conditions[99](index=99&type=chunk) - A significant acquisition involved an **additional 10% equity in Moolarben for AUD 300 million**, increasing total ownership to **95%** and generating an accounting gain of **AUD 653 million**[100](index=100&type=chunk) - On December 16, 2020, the company regained accounting control of Watagan, with its financial results to be re-consolidated into the group's statements[101](index=101&type=chunk) [Directors' and Management Information](index=36&type=section&id=Directors'%20and%20Management%20Information) This section details the background, qualifications, and committee roles of current directors and management, including their 2020 meeting attendance records - The report details each director's membership and chairmanship in the Audit and Risk Management, Nomination and Remuneration, Health Safety Environment Community, and Strategic Development committees as of December 31, 2020[120](index=120&type=chunk) - The report discloses 2020 Board and committee meeting attendance, with **17 full Board meetings** held during the year[122](index=122&type=chunk) [Remuneration Report](index=42&type=section&id=Remuneration%20Report) [Remuneration Report Overview](index=44&type=section&id=Remuneration%20Report%20Overview) The Remuneration Report reviews 2020's challenges, noting reduced executive pay due to market impacts on profit, and outlines 2021 framework adjustments to enhance individual accountability - Executive remuneration decreased from 2019 due to challenging market conditions and unmet pre-tax profit targets, resulting in reduced Short-Term Incentive (STI) payouts[136](index=136&type=chunk) - The 2021 remuneration framework will introduce individual performance weighting for Short-Term Incentive outcomes to enhance individual accountability[137](index=137&type=chunk) - The executive leadership team underwent structural changes in 2020, with new appointments to key positions including CEO, Chairman of the Executive Committee, and CFO[135](index=135&type=chunk)[140](index=140&type=chunk) [Remuneration Framework and Structure](index=47&type=section&id=Remuneration%20Framework%20and%20Structure) The executive remuneration framework, comprising FAR, STI, and LTI, aims for market competitiveness and shareholder alignment, with STI based on a balanced scorecard and LTI on long-term performance targets Executive Remuneration Structure | Remuneration Component | Form | Purpose and Assessment Basis | | :--- | :--- | :--- | | **Fixed Annual Remuneration (FAR)** | Cash salary, superannuation, etc. | Attract and retain talent, reflect role responsibilities | | **Short-Term Incentive (STI)** | 50% Cash + 50% Deferred Equity | Reward achievement of annual financial, operational, and strategic objectives, based on a balanced scorecard | | **Long-Term Incentive (LTI)** | Performance Share Rights | Reward and retain talent influencing long-term company performance, based on 3-year relative EPS and cost targets | 2020 Short-Term Incentive (STI) Scorecard Weightings | Key Performance Indicator (KPI) | Weight | | :--- | :--- | | **Profitability** | 60% | | (PBT 30%, Cash Cost 20%, ROM Tonnes 10%) | | | **Health & Safety** | 15% | | **Strategic Objectives** | 15% | | **Environment** | 10% | [Remuneration and Company Performance Link](index=50&type=section&id=Remuneration%20and%20Company%20Performance%20Link) This section details the link between remuneration and performance, noting that despite unmet profit targets, strong performance in other areas led to a 58.9% STI payout and partial LTI vesting - 2020 Short-Term Incentive (STI) results: Despite unmet pre-tax profit targets, strong performance in cost control, safety, and strategic objectives led to an overall scorecard achievement of **117.8%**, with key management personnel receiving **58.9%** of their maximum incentive opportunity[167](index=167&type=chunk)[168](index=168&type=chunk) - 2018 Long-Term Incentive (LTI) vesting forecast: The **60% of awards linked to EPS** are not expected to vest, while the **40% linked to cost targets** are expected to vest **100%**[170](index=170&type=chunk) [Statutory Remuneration Disclosure](index=53&type=section&id=Statutory%20Remuneration%20Disclosure) This section provides statutory disclosure of executive and non-executive director remuneration, detailing compensation components, fee structures, and changes in equity holdings 2020 Total Remuneration for Key Management Personnel | Name | Position | 2020 Total Remuneration (AUD) | | :--- | :--- | :--- | | Zhang Ning | Chairman of Executive Committee | 957,470 | | David James Moult | Chief Executive Officer | 3,468,786 | | Su Ning | Chief Financial Officer | 894,992 | - The total fee cap for non-executive directors is **AUD 3.5 million per annum**, with **AUD 894,209** actually paid in 2020; non-executive directors nominated by major shareholders do not receive fees[179](index=179&type=chunk)[180](index=180&type=chunk)[182](index=182&type=chunk) [Management Discussion and Analysis (MD&A)](index=55&type=section&id=Management%20Discussion%20and%20Analysis%20(MD%26A)) [Business Review](index=57&type=section&id=Business%20Review) The 2020 business review highlights a 26% drop in average coal selling prices due to global economic conditions, offset by a 7% increase in marketable production and reduced operating costs 2020 vs 2019 Production Comparison (Attributable Basis) | Coal Type | 2020 (million tonnes) | 2019 (million tonnes) | Change | | :--- | :--- | :--- | :--- | | Thermal Coal | 33.6 | 30.2 | +11% | | Metallurgical Coal | 5.7 | 6.7 | -15% | | **Total** | **39.3** | **36.9** | **+7%** | - The company's overall average mine-gate selling price decreased by **26% to AUD 82/tonne** due to global coal price declines, with thermal coal at **AUD 76/tonne** and metallurgical coal at **AUD 124/tonne**[192](index=192&type=chunk) - The COVID-19 pandemic significantly impacted coal prices, leading to a substantial decline in financial performance and cash flow, with mine-gate coal sales revenue decreasing by **AUD 881 million (-26%)**[199](index=199&type=chunk) [Financial Performance Review](index=60&type=section&id=Financial%20Performance%20Review) In 2020, the company reported a post-tax loss of AUD 1.04 billion, driven by reduced coal sales revenue and a AUD 1.383 billion non-cash loss from Watagan's re-consolidation, despite effective cost management 2020 Consolidated Statement of Profit or Loss Summary (million AUD) | Indicator | 2020 | 2019 | Change | | :--- | :--- | :--- | :--- | | **Revenue** | 3,473 | 4,459 | -22% | | **Operating EBITDA** | 748 | 1,654 | -55% | | **Loss/Profit Before Income Tax** | (1,143) | 767 | -249% | | **Loss/Profit After Income Tax** | (1,040) | 719 | -249% | | **Basic Loss/Earnings Per Share (AUD cents)** | (78.8) | 54.5 | -245% | - The significant performance decline was primarily due to reduced revenue from falling coal prices and a **one-time non-cash loss of AUD 1.383 billion** from Watagan's re-consolidation[202](index=202&type=chunk) - The company achieved effective cost control, reducing cash operating costs per tonne of marketable coal (excluding royalties) from **AUD 64 in 2019 to AUD 59**[215](index=215&type=chunk) [Cash Flow Analysis](index=66&type=section&id=Cash%20Flow%20Analysis) In 2020, net operating cash inflow decreased by 61% to AUD 605 million, with net investing outflow of AUD 591 million and financing outflow of AUD 314 million, resulting in a net decrease of AUD 300 million in cash 2020 Cash Flow Summary (million AUD) | Cash Flow Type | 2020 (million AUD) | 2019 (million AUD) | | :--- | :--- | :--- | | **Net Cash from Operating Activities** | 605 | 1,548 | | **Net Cash from Investing Activities** | (591) | (392) | | **Net Cash from Financing Activities** | (314) | (1,209) | | **Net Increase/(Decrease) in Cash** | (300) | (53) | [Financial Position and Liquidity](index=66&type=section&id=Financial%20Position%20and%20Liquidity) As of year-end 2020, total assets were AUD 11.055 billion, with net debt increasing to AUD 3.568 billion and gearing to 41% due to Watagan's re-consolidation 2020 Year-End Financial Position (million AUD) | Indicator | December 31, 2020 (million AUD) | December 31, 2019 (million AUD) | | :--- | :--- | :--- | | **Total Assets** | 11,055 | 11,093 | | **Total Liabilities** | 5,862 | 4,930 | | **Total Equity** | 5,193 | 6,163 | | **Net Debt** | 3,568 | 2,536 | | **Gearing Ratio** | 41% | 29% | - The gearing ratio increased from **29% to 41%**, primarily due to Watagan's re-consolidation leading to increased interest-bearing debt[234](index=234&type=chunk) [Significant Investments and Capital Expenditures](index=68&type=section&id=Significant%20Investments%20and%20Capital%20Expenditures) In 2020, capital expenditure was AUD 279 million, with a significant investment of AUD 300 million to acquire an additional 10% interest in Moolarben, while pursuing internal growth and external acquisitions - 2020 capital expenditure cash flow was **AUD 279 million**, primarily for investments in property, plant, and equipment[237](index=237&type=chunk) - The company completed the acquisition of a **10% interest in the Moolarben joint venture for AUD 300 million**, funded by operating cash flow and Hong Kong listing proceeds[237](index=237&type=chunk) [Financial Statements](index=54&type=section&id=Financial%20Statements) [Auditor's Independence Declaration](index=56&type=section&id=Auditor's%20Independence%20Declaration) The auditor, ShineWing Australia, declared no contraventions of independence requirements or professional ethical standards during the 2020 audit - Auditor ShineWing Australia confirmed its independence in the 2020 financial year audit, adhering to relevant regulations and professional ethical standards[190](index=190&type=chunk)[761](index=761&type=chunk) [Consolidated Statement of Profit or Loss and Other Comprehensive Income](index=71&type=section&id=Consolidated%20Statement%20of%20Profit%20or%20Loss%20and%20Other%20Comprehensive%20Income) The statement shows a swing from profit to a **AUD 1.04 billion post-tax loss** in 2020, driven by falling coal prices and a one-time non-cash loss 2020 Consolidated Statement of Profit or Loss Key Data (million AUD) | Indicator | 2020 | 2019 | | :--- | :--- | :--- | | **Revenue** | 3,473 | 4,459 | | **Loss/Profit Before Income Tax** | (1,143) | 767 | | **Loss/Profit After Income Tax** | (1,040) | 719 | | **Total Comprehensive (Expense)/Income** | (688) | 841 | [Consolidated Statement of Financial Position](index=72&type=section&id=Consolidated%20Statement%20of%20Financial%20Position) The statement shows total assets of AUD 11.055 billion and total liabilities of AUD 5.862 billion as of December 31, 2020, with total equity decreasing to AUD 5.193 billion 2020 Year-End Consolidated Statement of Financial Position Key Data (million AUD) | Indicator | December 31, 2020 (million AUD) | December 31, 2019 (million AUD) | | :--- | :--- | :--- | | **Total Assets** | 11,055 | 11,093 | | **Total Liabilities** | 5,862 | 4,930 | | **Net Assets** | 5,193 | 6,163 | [Consolidated Statement of Changes in Equity](index=73&type=section&id=Consolidated%20Statement%20of%20Changes%20in%20Equity) The statement details changes in shareholders' equity, which decreased from AUD 6.163 billion to AUD 5.193 billion due to comprehensive expenses and dividends - Shareholders' equity decreased from **AUD 6.163 billion** at year-start to **AUD 5.193 billion** at year-end, primarily due to **AUD 688 million in total comprehensive expense** and **AUD 280 million in dividends paid**[243](index=243&type=chunk)[814](index=814&type=chunk) [Consolidated Statement of Cash Flows](index=74&type=section&id=Consolidated%20Statement%20of%20Cash%20Flows) The statement summarizes 2020 cash flows, with net operating inflow of AUD 605 million, net investing outflow of AUD 591 million, and net financing outflow of AUD 314 million, resulting in a net cash decrease of AUD 300 million 2020 Consolidated Statement of Cash Flows Summary (million AUD) | Item | 2020 (million AUD) | | :--- | :--- | | **Net Cash Inflow from Operating Activities** | 605 | | **Net Cash Outflow from Investing Activities** | (591) | | **Net Cash Outflow from Financing Activities** | (314) | | **Net Decrease in Cash and Cash Equivalents** | (300) | | **Year-End Cash and Cash Equivalents** | 637 | [Notes to the Consolidated Financial Statements](index=75&type=section&id=Notes%20to%20the%20Consolidated%20Financial%20Statements) The notes provide detailed explanations and supplementary information on the basis of preparation, accounting policies, estimates, performance, assets, liabilities, capital structure, and group structure [B. Performance](index=77&type=section&id=B.%20Performance) This section details performance, including segmental data, revenue composition by market and product, expenses, and remuneration for key management and highest-paid employees 2020 Coal Sales Revenue by Region (million AUD) | Major Regional Market | 2020 Revenue (million AUD) | 2019 Revenue (million AUD) | | :--- | :--- | :--- | | Japan | 683 | 1,139 | | Singapore | 610 | 465 | | China | 455 | 683 | | South Korea | 413 | 546 | | Taiwan | 385 | 533 | | Australia | 338 | 453 | [C. Operating Assets and Liabilities](index=86&type=section&id=C.%20Operating%20Assets%20and%20Liabilities) This section details major operating assets and liabilities, including property, plant, and equipment, mining rights, and intangible assets, with a focus on impairment testing assumptions for future coal prices and exchange rates - Key assumptions for long-term asset impairment testing include: long-term thermal coal prices of **USD 57-103/tonne**, metallurgical coal prices of **USD 103-177/tonne**, an **AUD/USD exchange rate of 0.75**, and a **10.5% post-tax discount rate**[300](index=300&type=chunk)[302](index=302&type=chunk) [D. Capital Structure and Financing](index=101&type=section&id=D.%20Capital%20Structure%20and%20Financing) This section details capital structure, financing activities, and financial risk management, covering interest-bearing debt, equity, dividends, and analysis of market, credit, and liquidity risks 2020 Year-End Interest-Bearing Debt Composition (million AUD) | Debt Type | Amount (million AUD) | | :--- | :--- | | Bank Loans | 2,019 | | Bonds | 1,006 | | Unsecured Loans from Related Parties | 1,059 | | Lease Liabilities | 121 | | **Total** | **4,205** | [E. Group Structure](index=117&type=section&id=E.%20Group%20Structure) This section outlines the group structure and significant 2020 changes, including acquiring an additional 10% Moolarben interest and re-consolidating Watagan, which resulted in a AUD 1.383 billion non-cash loss - After acquiring an **additional 10% interest in Moolarben**, the company gained accounting control and recognized a **bargain purchase gain of AUD 653 million**[414](index=414&type=chunk)[416](index=416&type=chunk) - The re-consolidation of the Watagan Group on December 16, 2020, resulted in a **one-time non-cash loss of AUD 1.383 billion** from this business combination[419](index=419&type=chunk)[420](index=420&type=chunk) [Directors' Declaration](index=142&type=section&id=Directors'%20Declaration) The Board declares the 2020 financial statements comply with regulations, fairly reflect the Group's position, and confirms the company's ability to pay debts, supported by CEO and CFO declarations - The Board confirms the financial statements are true and fair, and the company has the ability to continue as a going concern[483](index=483&type=chunk) [Audit and Governance](index=141&type=section&id=Audit%20and%20Governance) [Independent Auditor's Report](index=143&type=section&id=Independent%20Auditor's%20Report) Independent auditor ShineWing Australia issued an unmodified opinion on the 2020 financial statements, identifying key audit matters including Watagan's re-consolidation, Moolarben acquisition, and long-term asset recoverability - The auditor issued an **unmodified audit opinion** on the 2020 financial statements[485](index=485&type=chunk) - Key audit matters include Watagan re-consolidation, acquisition of additional Moolarben equity, long-term asset recoverability, valuation of interest in Zhongshan Coal Mine, and tax treatments[486](index=486&type=chunk)[487](index=487&type=chunk)[488](index=488&type=chunk) [Corporate Governance Report](index=149&type=section&id=Corporate%20Governance%20Report) This report outlines the corporate governance framework, detailing Board structure, independence, committee roles, risk management, and other key practices, noting non-compliance with ASX independence recommendations - The Board comprises **9 directors**, including **3 independent non-executive directors**; the Chairman and most members are not considered independent due to controlling shareholder nominations, not fully complying with ASX Recommendations 2.4 and 2.5[493](index=493&type=chunk)[501](index=501&type=chunk) - The company has four standing Board committees: Audit and Risk Management, Health Safety Environment Community, Nomination and Remuneration, and Strategic Development, to assist the Board[504](index=504&type=chunk) - The company has a comprehensive risk management framework, overseen by the Audit and Risk Management Committee, identifying significant operational, regulatory, environmental, geopolitical, and financial risks[516](index=516&type=chunk)[518](index=518&type=chunk) [Other Disclosures](index=169&type=section&id=Other%20Disclosures) [Related Party Transactions](index=171&type=section&id=Related%20Party%20Transactions) This section details 2020's ongoing related party transactions with controlling shareholders and associates, covering coal sales, purchases, and financing, confirming adherence to normal commercial terms 2020 Overview of Major Related Party Transactions | Transaction Type | Counterparty | Annual Cap (USD) | Actual Transaction Amount (USD) | | :--- | :--- | :--- | :--- | | **Coal Sales** | Yankuang Group | 250 million | Approx. 53.2 million | | **Coal Sales** | Yankuang International Trade | 93 million | Approx. 13.7 million | | **Coal Sales** | Glencore | 350 million | Approx. 142.2 million | | **Coal Sales** | POSCO | 600 million | Approx. 163 million | | **Coal Purchases** | Yankuang Group | 65 million | Approx. 3.5 million | | **Coal Purchases** | Glencore | 350 million | Approx. 62.5 million | [Coal Reserves and Resources](index=178&type=section&id=Coal%20Reserves%20and%20Resources) The report discloses 2020 JORC-compliant coal resources and reserves, showing attributable total resources of 6.884 billion tonnes and marketable reserves of 833 million tonnes, with slight decreases from the prior year Coal Reserves and Resources Changes (Attributable Basis) | Item | 2020 (million tonnes) | 2019 (million tonnes) | Change | | :--- | :--- | :--- | :--- | | **Coal Resources** | 6,884 | 6,911 | -0.4% | | **Recoverable Reserves** | 1,154 | 1,196 | -3.5% | | **Marketable Reserves** | 833 | 872 | -4.5% | [Shareholding Data](index=182&type=section&id=Shareholding%20Data) This section provides shareholding structure information as of March 3, 2020, showing controlling shareholder Yankuang Energy holding 62.26% and the top three shareholders collectively holding over 84% - As of March 3, 2020, the major shareholder was Yankuang Energy Group Co., Ltd., with a **62.26% stake**; the top 20 shareholders collectively held approximately **99.32%** of the shares[561](index=561&type=chunk)

Financial Performance - Total revenue for the half-year ended June 30, 2020, was AUD 1,973 million, a decrease of 16% from AUD 2,350 million in the same period of 2019[5]. - Underlying profit before tax (excluding non-recurring items) was a loss of AUD 45 million, down 108% from a profit of AUD 492 million in the previous year[5]. - Underlying profit after tax (excluding non-recurring items) increased by 22% to AUD 593 million, compared to AUD 492 million in the prior year[5]. - Basic earnings per share (excluding non-recurring items) was a loss of 2.8 cents, down 111% from 26.1 cents in the previous year[6]. - Net profit after tax for Yancoal was AUD 605 million, an increase of AUD 41 million from AUD 564 million in the first half of 2019[13]. - Total revenue decreased by 16% from AUD 2,363 million in H1 2019 to AUD 1,980 million in H1 2020, primarily due to a 17% drop in coal sales revenue from AUD 2,272 million to AUD 1,897 million[52]. - Operating EBIT for H1 2020 was AUD 95 million, down 85% from AUD 646 million in H1 2019, with an EBIT margin of 5%[51]. - Operating EBITDA fell by 49% from AUD 940 million in H1 2019 to AUD 481 million in H1 2020, with the EBITDA margin dropping from 40% to 24%[71]. - Net profit after tax rose by 75% from AUD 345 million in H1 2019 to AUD 605 million in H1 2020, increasing the profit margin from 15% to 31%[78]. Production and Sales - Total saleable coal production for the first half of 2020 was 25.6 million tonnes, a decrease of 3% from 26.4 million tonnes in the first half of 2019, while attributable production increased by 7% to 19.0 million tonnes[17]. - The total coal sales volume for the first half of 2020 was 18.4 million tonnes, with thermal coal sales of 16.5 million tonnes and metallurgical coal sales of 1.9 million tonnes[15]. - The total raw coal production from the Moolarben mine was 11.1 million tonnes, a 2% increase from 10.9 million tonnes in the first half of 2019[16]. - The total raw coal production from the MTW mine was 8.2 million tonnes, a decrease of 10% from 9.1 million tonnes in the first half of 2019[16]. - The total raw coal production from the HVO mine was 8.4 million tonnes, a decrease of 5% from 8.8 million tonnes in the first half of 2019[16]. - Saleable thermal coal production increased by 10% from 14.8 million tons in H1 2019 to 16.3 million tons in H1 2020[45]. - Saleable metallurgical coal production decreased by 26% from 3.8 million tons in H1 2019 to 2.8 million tons in H1 2020[45]. Costs and Expenses - The cash operating cost was slightly below the target of AUD 61 per tonne, aided by lower input costs and ongoing operational optimizations[12]. - The average cash operating cost, excluding government royalties, decreased from AUD 62 per ton in H1 2019 to AUD 60 per ton in H1 2020[41]. - The total production cost, including cash and non-cash operating costs, was AUD 91 per ton in H1 2020, down from AUD 94 per ton in H1 2019[61]. - Employee benefits increased by 13% from AUD 260 million in H1 2019 to AUD 295 million in H1 2020, raising the cost per ton of coal sold from AUD 15 to AUD 16[65]. - Transportation costs decreased by 6% from AUD 293 million in H1 2019 to AUD 276 million in H1 2020, lowering the cost per ton of coal sold from AUD 16 to AUD 15[66]. Debt and Financing - Yancoal replaced a USD 1.275 billion debt facility maturing on December 31, 2019, with new financing of the same amount, with most repayments now due in 2024 and 2025[14]. - The company repaid USD 300 million of its secured bank loans during the period, with most repayments due in 2024 and 2025[87]. - The company has AUD 566 million of undrawn debt available from its AUD 1,400 million unsecured third-party financing as of June 30, 2020[88]. - The company’s interest-bearing debt includes secured bank loans of AUD 1,852 million and unsecured loans from related parties of AUD 1,189 million as of June 30, 2020[87]. - The company has drawn AUD 835 million from a total of AUD 1.4 billion in unsecured loans aimed at funding working capital and capital expenditures[172]. Market Conditions - The company experienced a negative impact on demand for thermal and metallurgical coal due to reduced economic activity, particularly during the COVID-19 pandemic[40]. - Coal prices showed signs of stabilization towards the end of the reporting period, despite initial declines in the second quarter[40]. - The company’s coal mining operations are significantly influenced by the market demand for thermal and metallurgical coal, which is affected by macroeconomic trends[40]. - The company anticipates a 5.5% decline in global seaborne demand for thermal coal from 2020 to 2040, while metallurgical coal demand is expected to increase during the same period[143]. Shareholder Information - The company declared a dividend of 21.21 cents per share for the 2019 final dividend, totaling AUD 280 million[8]. - The largest shareholder, Yanzhou Coal Mining Company, holds 822,157,715 shares, accounting for 62.26% of the total shares[33]. - Cinda International HGB Investment (UK) Limited and its controlled entities collectively own 209,800,010 shares, representing 15.89% of the total shares[33]. - The company’s share trading policy prohibits certain employees from trading during specific blackout periods, ensuring compliance with insider trading regulations[28]. Assets and Liabilities - Total assets as of June 30, 2020, amounted to AUD 11,514 million, an increase from AUD 11,093 million at the end of 2019[105]. - Current assets decreased by AUD 633 million to AUD 1,140 million, mainly due to a reduction in cash and trade receivables[84]. - Total liabilities increased by AUD 99 million to AUD 5,029 million, reflecting debt repayments offset by an increase in deferred tax liabilities[85]. - Total equity increased by AUD 322 million to AUD 6,485 million, primarily due to a net profit after tax of AUD 605 million[85]. Acquisitions and Joint Ventures - The company recognized a bargain purchase gain of AUD 653 million from acquiring an additional 10% interest in the Morabien joint venture, impacting net profit significantly[49]. - The acquisition of a 10% interest in the Moolarben coal joint venture was completed for a cash consideration of AUD 300 million, plus an adjustment of AUD 8 million[195]. - The company now holds a 95% interest in the Moolarben joint venture, up from 85% prior to the acquisition[199]. Risk Management - The group faces financial risks including currency risk, price risk, interest rate risk, credit risk, and liquidity risk, with policies in place to manage these risks[93][94][95][96][97][98]. - The group has not entered into any derivative hedging instruments for spot coal price fluctuations[95]. - The company continues to monitor its working capital situation and believes it can meet its debt obligations due within the next 12 months[113].

[Company Overview and Core Values](index=3&type=section&id=%E5%85%AC%E5%8F%B8%E6%A6%82%E8%A7%88%E4%B8%8E%E6%A0%B8%E5%BF%83%E4%BB%B7%E5%80%BC) Yancoal Australia is a leading coal producer focused on powering Asian economies and transitioning towards a low-carbon future [Company Profile and Vision](index=3&type=section&id=%E5%85%AC%E5%8F%B8%E7%AE%80%E4%BB%8B%E4%B8%8E%E6%84%BF%E6%99%AF) Yancoal Australia is a leading coal producer committed to powering Asian economies and playing a key role in developing low-emission solutions - The company positions itself as a driving force for Asian economic development, committed to a low-carbon future through technological innovation for low-emission solutions[9](index=9&type=chunk)[614](index=614&type=chunk) [Core Values](index=4&type=section&id=%E6%A0%B8%E5%BF%83%E4%BB%B7%E5%80%BC%E8%A7%82) The company's core values, centered on "empowerment," encompass safety, innovation, integrity, community, and employees - The company prioritizes **safety**, empowering employees to identify and resolve safety risks, with 2019 safety performance demonstrating the effectiveness of these efforts[12](index=12&type=chunk)[617](index=617&type=chunk) - The company is committed to **innovation**, encouraging employees to share ideas and collaborate to meet customer needs and create shareholder value, exemplified by funding cancer research at Queensland University of Technology[14](index=14&type=chunk)[15](index=15&type=chunk)[619](index=619&type=chunk) - The company values **community**, spending nearly **AUD 3 billion** annually on local procurement and voluntarily donating approximately **AUD 1.6 million** to support community organizations for sustainable development[18](index=18&type=chunk)[623](index=623&type=chunk) - The company considers **employees** as core, with over **4,000 staff**, valuing everyone's participation and contribution as the energy source for value creation[20](index=20&type=chunk)[625](index=625&type=chunk) [2019 Annual Performance Highlights](index=17&type=section&id=2019%E5%B9%B4%E5%BA%A6%E4%B8%9A%E7%BB%A9%E4%BA%AE%E7%82%B9) Despite falling international coal prices in 2019, the company achieved strong financial and operational performance, including AUD 1.64 billion operating EBITDA and AUD 719 million profit after tax 2019 Annual Key Financial and Operational Indicators | Indicator | 2019 Data | | :--- | :--- | | **Revenue** | AUD 4.46 billion | | **Operating EBITDA** | AUD 1.64 billion | | **Profit after Tax** | AUD 719 million | | **Total Dividends** | AUD 417 million (31.56 AUD cents per share) | | **Attributable Saleable Coal Production** | 35.6 million tonnes | | **Cash Cost (excluding royalties)** | AUD 61/tonne | | **Average Selling Price (Thermal & Metallurgical Coal)** | AUD 111/tonne | | **Net Gearing Ratio** | 29% | - Despite the decline in international coal prices in 2019, the company's operating EBITDA and profit after tax remained strong[37](index=37&type=chunk)[642](index=642&type=chunk) - The company made significant distributions and continued to repay debt over the past two years, maintaining a controllable gearing ratio[37](index=37&type=chunk)[642](index=642&type=chunk) [Executive Messages](index=21&type=section&id=%E9%AB%98%E7%AE%A1%E8%87%B4%E8%BE%9E) Executive messages highlight the company's strong 2019 performance, strategic responses to market challenges, and significant contributions to the Australian economy [Chairman's Message](index=21&type=section&id=%E4%B8%BB%E5%B8%AD%E8%87%B4%E8%BE%9E) Chairman Zhang Baocai reviewed 2019 performance, emphasizing strong results despite challenges, significant debt repayment, and dividend payments, while addressing 2020 challenges - In 2019, the company performed well under severe market conditions, with key achievements including reducing operating costs to **AUD 61 per tonne**, increasing production, and improving financial position[39](index=39&type=chunk)[644](index=644&type=chunk) - The company paid a total of **AUD 417 million** in dividends in 2019 and repaid **USD 1.4 billion** in debt ahead of schedule over the past two years[39](index=39&type=chunk)[644](index=644&type=chunk) - Looking ahead to 2020, the company faces dual challenges from Australian bushfires and the COVID-19 pandemic, has taken proactive measures, and will closely monitor international coal market supply and demand dynamics[39](index=39&type=chunk)[644](index=644&type=chunk) [CEO's Message](index=23&type=section&id=%E9%A6%96%E5%B8%AD%E6%89%A7%E8%A1%8C%E5%AE%98%E8%87%B4%E8%BE%9E) CEO David Moult emphasized achieving key operational goals in 2019, delivering shareholder returns, and highlighting the company's significant economic and social contributions to Australia - The company's 2019 operational performance was strong, achieving targets for increased production, reduced costs, and maintained capital expenditure, enabling sustained dividend payments and a lower gearing ratio[42](index=42&type=chunk)[647](index=647&type=chunk) - The company's total annual impact on the Australian economy exceeds **AUD 8.6 billion**, providing **43,300 full-time jobs** and contributing **AUD 720 million** in fiscal revenue to all levels of government[42](index=42&type=chunk)[647](index=647&type=chunk) - The thermal coal produced by the company is sufficient to power Australia for one year, and exported metallurgical coal can produce **3.5 million tonnes of steel**, equivalent to building approximately **70 Sydney Harbour Bridges**[42](index=42&type=chunk)[647](index=647&type=chunk) [Strategy, Operations, and ESG](index=25&type=section&id=%E6%88%98%E7%95%A5%E3%80%81%E8%90%A5%E8%BF%90%E4%B8%8EESG) This section details the company's strategic focus on value creation, operational efficiency across its mines, and robust environmental, social, and governance practices [Strategy and Capital Allocation](index=25&type=section&id=%E6%88%98%E7%95%A5%E4%B8%8E%E8%B5%84%E6%9C%AC%E9%85%8D%E7%BD%AE) The company's strategy focuses on value creation and shareholder returns through operational efficiency, robust cash flow, and disciplined capital allocation prioritizing reinvestment, dividends, and debt reduction - The company uses strict capital allocation, deploying operating cash flow (**AUD 1.55 billion** in 2019) for reinvestment, dividend payments, and debt reduction[47](index=47&type=chunk)[652](index=652&type=chunk) - The company prioritizes debt reduction, having repaid **USD 1.4 billion** ahead of schedule since late 2017, reducing the gearing ratio to **29%** by the end of 2019[47](index=47&type=chunk)[652](index=652&type=chunk) - The company distributed a total of **AUD 417 million** in dividends in 2019, representing a payout ratio of **58%** of the full-year profit after tax[47](index=47&type=chunk)[652](index=652&type=chunk) [Operations Review](index=26&type=section&id=%E8%90%A5%E8%BF%90%E5%9B%9E%E9%A1%B5) The company operates major coal mines in NSW and Queensland, producing 35.6 million tonnes of saleable coal in 2019, primarily from Mooraback, MTW, and HVO, all for export to Asia-Pacific 2019 Operations Overview by Mine (Attributable) | Mine | Economic Interest | Saleable Reserves (million tonnes) | 2019 Saleable Coal Production (million tonnes) | | :--- | :--- | :--- | :--- | | **Mooraback** | 85% | 192 | 15.2 | | **Mount Thorley Warkworth** | 82.9% | 176 | 9.9 | | **Hunter Valley Operations** | 51% | 332 | 6.9 | | **Ashton** | 100% | 42 | 2.8 | | **Stratford Duralie** | 100% | 11 | 0.8 | | **Total (Attributable)** | - | **753** | **35.6** | [Environmental, Social, and Governance (ESG)](index=28&type=section&id=%E7%8E%AF%E5%A2%83%E3%80%81%E7%A4%BE%E4%BC%9A%E4%B8%8E%E6%B2%BB%E7%90%86%20(ESG)) The company demonstrates robust ESG performance, with improved safety (TRIFR reduced to 7.27), strict environmental compliance (6% reduction in Scope 1 & 2 emissions), and significant community investment - Safety performance improved in 2019, with the Total Recordable Injury Frequency Rate (TRIFR) decreasing from **8.01** at the end of 2018 to **7.27**[56](index=56&type=chunk)[661](index=661&type=chunk) Greenhouse Gas Emissions Report (million tonnes CO2-e) | Reporting Period | Scope 1 Emissions | Scope 2 Emissions | Total Emissions | | :--- | :--- | :--- | :--- | | 2017-2018 | 1.75 | 0.36 | 2.11 | | 2018-2019 | 1.62 | 0.37 | 1.98 | - In 2019, the company invested approximately **AUD 1.6 million** through community support programs in Australia, supporting **177 local projects** across health, social, environmental, and educational sectors[64](index=64&type=chunk)[67](index=67&type=chunk)[669](index=669&type=chunk) [Coal Reserves and Resources](index=32&type=section&id=%E7%85%A4%E7%82%AD%E5%82%A8%E9%87%8F%E5%8F%8A%E8%B5%84%E6%BA%90) As of Dec 31, 2019, total attributable coal resources increased to 6,911 million tonnes (from 6,442 Mt), while saleable coal reserves were 872 million tonnes (from 891 Mt), detailed by mine Coal Resources and Reserves Overview (as of December 31, 2019, Attributable Basis) | Category | 2019 (million tonnes) | 2018 (million tonnes) | Change | | :--- | :--- | :--- | :--- | | **Total Coal Resources** | 6,911 | 6,442 | ▲ 7.3% | | **Recoverable Coal Reserves** | 1,196 | 1,240 | ▼ 3.5% | | **Saleable Coal Reserves** | 872 | 891 | ▼ 2.1% | [Financial Report](index=36&type=section&id=%E8%B4%A2%E5%8A%A1%E6%8A%A5%E5%91%8A) This section provides a comprehensive overview of the company's financial performance, including management discussion, directors' report, related party transactions, governance, and audited financial statements [Management Discussion and Analysis](index=38&type=section&id=%E7%AE%A1%E7%90%86%E5%B1%82%E8%AE%A8%E8%AE%BA%E4%B8%8E%E5%88%86%E6%9E%90) In 2019, total revenue decreased 7% to AUD 4.525 billion and profit after tax fell 16% to AUD 719 million due to weak coal markets, partially offset by increased production and lower costs 2018-2019 Operating Performance Comparison (million AUD) | Indicator | 2019 | 2018 | Change | | :--- | :--- | :--- | :--- | | **Operating Revenue** | 4,525 | 4,891 | ▼ 7.5% | | **Operating EBITDA** | 1,635 | 2,180 | ▼ 25.0% | | **Operating EBIT** | 1,028 | 1,657 | ▼ 38.0% | | **Profit after Income Tax** | 719 | 852 | ▼ 15.6% | 2018-2019 Coal Production and Sales Comparison | Indicator | 2019 | 2018 | Change | | :--- | :--- | :--- | :--- | | **Attributable Saleable Coal Production (million tonnes)** | 35.6 | 32.9 | ▲ 8.2% | | **Run-of-Mine Coal Sales (million tonnes)** | 35.6 | 33.5 | ▲ 6.3% | | **Average Selling Price (AUD/tonne)** | 111 | 132 | ▼ 15.9% | | **Cash Operating Cost (AUD/tonne)** | 61 | 63 | ▼ 3.2% | 2018-2019 Cash Flow Comparison (million AUD) | Cash Flow Activity | 2019 | 2018 | Change | | :--- | :--- | :--- | :--- | | **Net Cash from Operating Activities** | 1,548 | 1,747 | (199) | | **Net Cash from Investing Activities** | (392) | (55) | (337) | | **Net Cash from Financing Activities** | (1,209) | (904) | (305) | - The gearing ratio decreased from **35%** at the end of 2018 to **29%** at the end of 2019, primarily due to strong operating cash flow and continuous debt repayment[123](index=123&type=chunk)[124](index=124&type=chunk)[728](index=728&type=chunk) [Directors' Report](index=52&type=section&id=%E8%91%A3%E4%BA%8B%E4%BC%9A%E6%8A%A5%E5%91%8A) The Directors' Report outlines the company's 2019 operational and financial performance, corporate activities, director information, remuneration, and other statutory disclosures - In 2019, the company's Total Recordable Injury Frequency Rate (TRIFR) was **7.27**, an improvement from **8.01** in the previous year[129](index=129&type=chunk)[56](index=56&type=chunk)[661](index=661&type=chunk) - The company voluntarily repaid **USD 500 million** in debt in February 2019 and distributed a 2018 final dividend of **AUD 211 million**, a special dividend of **AUD 166 million**, and a 2019 interim dividend of **AUD 137 million**[132](index=132&type=chunk)[737](index=737&type=chunk) - The remuneration report details that executive compensation comprises fixed annual salary, Short-Term Incentive (STI), and Long-Term Incentive (LTI) plans, linked to key performance indicators such as company profitability, cost control, production, and safety[201](index=201&type=chunk)[202](index=202&type=chunk)[203](index=203&type=chunk) [Continuing Connected Transactions](index=81&type=section&id=%E6%8C%81%E7%BB%AD%E5%85%B3%E8%BF%9E%E4%BA%A4%E6%98%93) This section discloses ongoing transactions with related parties, including Yanzhou Coal, Glencore, Sojitz, and POSCO, covering coal sales/purchases, management services, and financing, all under normal commercial terms and within annual caps - Transactions with controlling shareholder Yanzhou Coal and its subsidiaries include coal sales (annual cap **USD 250 million**), coal purchases (annual cap **USD 65 million**), and provision of management services (annual cap **AUD 15 million**)[260](index=260&type=chunk)[261](index=261&type=chunk)[262](index=262&type=chunk) - Transactions with Glencore include coal sales and purchases, both with an annual cap of **USD 350 million**[266](index=266&type=chunk)[267](index=267&type=chunk) - The company sells coal to POSCO and its associates, with a 2019 annual transaction cap of **USD 780 million**[267](index=267&type=chunk) [Corporate Governance Report](index=87&type=section&id=%E4%BC%81%E4%B8%9A%E7%AE%A1%E6%B2%BB%E6%8A%A5%E5%91%8A) The company maintains high corporate governance standards, adhering to Australian and Hong Kong regulations, detailing board structure, committee functions, risk management, disclosure policies, and shareholder rights - The Board of Directors comprises **11 directors**, including **1 executive director**, **6 non-executive directors**, and **4 independent non-executive directors**[280](index=280&type=chunk)[281](index=281&type=chunk) - The company has four standing committees: Audit and Risk Management, Health Safety Environment and Community, Nomination and Remuneration, and Strategy Development, to assist the Board in fulfilling its responsibilities[281](index=281&type=chunk) - The company has established a robust risk management framework, overseen by the Audit and Risk Management Committee, to regularly identify, assess, and manage significant business risks, including economic, environmental, and social sustainability risks[297](index=297&type=chunk) [Consolidated Financial Statements](index=109&type=section&id=%E7%BB%BC%E5%90%88%E8%B4%A2%E5%8A%A1%E6%8A%A5%E8%A1%A8) This section presents the audited consolidated financial statements for the year ended December 31, 2019, including income, balance sheet, equity, and cash flow statements, showing AUD 4.46 billion revenue and AUD 719 million profit after tax Consolidated Income Statement Summary (million AUD) | Item | 2019 | 2018 | | :--- | :--- | :--- | | **Revenue** | 4,460 | 4,850 | | **Profit before Income Tax** | 767 | 1,172 | | **Income Tax Expense** | (48) | (320) | | **Profit after Income Tax** | 719 | 852 | Consolidated Balance Sheet Summary (million AUD) | Item | December 31, 2019 | December 31, 2018 | | :--- | :--- | :--- | | **Total Assets** | 11,093 | 11,379 | | **Total Liabilities** | 4,930 | 5,541 | | **Net Assets** | 6,163 | 5,838 | | **Contributed Equity** | 6,482 | 6,482 | | **Total Equity** | 6,163 | 5,838 | Consolidated Cash Flow Statement Summary (million AUD) | Item | 2019 | 2018 | | :--- | :--- | :--- | | **Net Cash Inflow from Operating Activities** | 1,548 | 1,747 | | **Net Cash Outflow from Investing Activities** | (392) | (55) | | **Net Cash Outflow from Financing Activities** | (1,209) | (904) | | **Net (Decrease)/Increase in Cash and Cash Equivalents** | (53) | 788 |

Financial Performance - Total revenue for the half-year ended June 30, 2019, was AUD 2,350 million, a slight increase of 0% compared to AUD 2,347 million in the same period of 2018[3]. - Profit before tax (excluding non-recurring items) decreased by 9% to AUD 492 million from AUD 539 million year-on-year[3]. - Net profit attributable to shareholders (excluding non-recurring items) was AUD 345 million, down 7% from AUD 369 million in the previous year[3]. - Basic earnings per share (excluding non-recurring items) decreased by 9% to 26.1 AUD cents from 28.7 AUD cents year-on-year[4]. - Basic earnings per share (after excluding non-recurring items) increased by 49% to 42.7 AUD cents from 28.7 AUD cents in the previous year[4]. - EBITDA for H1 2019 was AUD 940 million, down 4% from AUD 980 million in H1 2018, with an EBITDA margin of 40%[22]. - EBIT for H1 2019 was AUD 646 million, a decrease of 12% compared to AUD 736 million in H1 2018, with an EBIT margin of 27%[22]. - Profit attributable to shareholders increased by 56% from AUD 361 million in H1 2018 to AUD 564 million in H1 2019[21]. - The company reported a net financing cost of AUD 89 million, a significant decrease of 43% from AUD 156 million in H1 2018[22]. - The tax expense for H1 2019 was AUD 147 million, a decrease of 17% from AUD 178 million in H1 2018[22]. - The company’s other income decreased by 83% from AUD 35 million in H1 2018 to AUD 6 million in H1 2019[22]. Coal Production and Sales - The total raw coal production increased by 5% from 32.9 million tons in H1 2018 to 34.4 million tons in H1 2019, with significant contributions from major assets like Morabbin, MTW, and HVO[14]. - The total saleable coal production rose by 4% from 25.4 million tons in H1 2018 to 26.4 million tons in H1 2019, driven by improvements in production rates and equipment utilization[14]. - Coal sales volume for H1 2019 was 2,272 million tons, a 1% increase from 2,250 million tons in H1 2018[23]. - The company experienced a 29% increase in purchased coal sales, rising from 155 million tons in H1 2018 to 200 million tons in H1 2019[23]. - The saleable thermal coal production increased by 7% from 13.8 million tons in H1 2018 to 14.8 million tons in H1 2019, while metallurgical coal production rose by 5% to 3.8 million tons[17]. - The company’s coal mining operations are diversified across five major open-cut and underground mines in Australia, primarily producing thermal and metallurgical coal[11]. - The overall average pithead selling price of coal decreased by 3% from AUD 128 per ton in H1 2018 to AUD 124 per ton in H1 2019, primarily due to a decline in global USD coal prices and an increase in the proportion of lower-grade coal sales[12]. - The average selling price of thermal coal decreased from AUD 117 per ton to AUD 112 per ton, while the average selling price of metallurgical coal fell from AUD 191 per ton to AUD 184 per ton[12]. - The proportion of saleable coal production from the company's tier-one assets increased from 86% in H1 2018 to 88% in H1 2019[17]. Dividends and Shareholder Returns - The company declared a non-taxable dividend of AUD 137 million (10.35 AUD cents per share), representing 24% of the after-tax profit[6]. - The company plans to distribute 50% of its adjusted net profit after tax as dividends for 2019[72]. Financial Position and Assets - Total assets decreased by AUD 495 million to AUD 10,884 million, mainly due to the reduction in current assets[55]. - Total liabilities decreased by AUD 727 million to AUD 4,814 million, primarily due to voluntary debt repayments of AUD 698 million[55]. - Total equity increased by AUD 232 million to AUD 6,070 million, reflecting a net profit after tax of AUD 564 million partially offset by the final dividend payment of AUD 377 million[55]. - Current assets decreased by AUD 528 million to AUD 1,394 million, primarily due to strong operating cash flow being offset by voluntary debt repayments of AUD 698 million and final dividends of AUD 377 million[54]. - Current liabilities increased by AUD 328 million to AUD 1,241 million, reflecting the reclassification of interest-bearing liabilities of AUD 425 million (USD 300 million) from non-current to current due to maturity in June 2020[55]. Cost Management - The cash operating cost, excluding government royalties, remained stable at AUD 62 per ton[12]. - The average cash operating cost per ton remained unchanged at AUD 62, indicating effective cost management amidst fluctuating market conditions[12]. - The company’s operating expenses included a 7% increase in transportation costs, rising from AUD 274 million in H1 2018 to AUD 293 million in H1 2019[22]. - Cash operating costs increased to AUD 76 per ton in H1 2019, up from AUD 75 in H1 2018, reflecting a 1.3% rise[30]. - Total production costs reached AUD 94 per ton in H1 2019, compared to AUD 91 per ton in H1 2018, marking a 3.3% increase[30]. Market Conditions and Risks - Demand for thermal coal in the Asia-Pacific region was weak during the period due to various factors, leading to a decline in index coal prices[11]. - The metallurgical coal market remained stable with minimal price fluctuations during the same period[11]. - The group faces financial risks including currency risk, price risk, interest rate risk, credit risk, and liquidity risk[64]. - The group’s credit risk is significantly reduced due to measures such as setting credit limits and requiring letters of credit from certain customers[68]. - The group maintains sufficient cash and current deposit balances to manage liquidity risk[69]. Accounting and Compliance - The financial statements for the half-year ended June 30, 2019, were not audited but reviewed by the audit and risk management committee[94]. - The group adopted Australian Accounting Standard AASB 16 Leases effective from January 1, 2019, changing its accounting policy for lease contracts[105]. - The group will not restate comparative information when transitioning to AASB 16, continuing to report under AASB 117 for prior periods[105]. - The company adopted AASB 134 for the preparation of its interim financial report, ensuring compliance with Australian accounting standards[103]. Employee and Operational Metrics - The total employee cost was AUD 260 million, compared to AUD 254 million in the first half of 2018[63]. - The group had approximately 3,000 employees located in Australia as of June 30, 2019[63]. - Yancoal's TRIFR (Total Recordable Injury Frequency Rate) remained stable at 7.171 as of June 30, 2019[75]. Future Outlook - The company anticipates that Australia will maintain a 26% share of global seaborne thermal coal demand, benefiting from its position as a key source of high-quality coal[12]. - The board believes that the market fundamentals remain optimistic in the long term despite current regional supply and demand factors[80].

Production and Sales Performance - Yancoal Australia Ltd achieved a record saleable coal production of 50 million tons in FY2018, representing a 59% increase from 31.5 million tons in FY2017[10]. - Total coal sales reached 37.1 million tons in FY2018, up 68% from 22.1 million tons in FY2017[10]. - Coal production increased to 43 million tons in 2018, a 77% rise from 24 million tons in 2017, while salable coal production rose by 78% to 33 million tons[13]. - The company reported revenue from continuing operations of AUD 4,850 million for 2018, a significant increase from AUD 2,601 million in 2017, representing an 86% growth[11]. - The company’s customer base spans the Asia-Pacific region, with Japan, Singapore, China, South Korea, and Taiwan accounting for approximately 81% of coal revenue for the year ended December 31, 2018[40]. - The total coal sales for the year amounted to 37.1 million tons, compared to 22.1 million tons in 2017[174]. - The total raw coal production rose by 62% from 41.1 million tons in 2017 to 66.5 million tons in 2018, with significant contributions from major assets like Moranbah, MTW, and HVO, which increased from 26.7 million tons to 55.2 million tons[99]. - The total saleable coal production increased by 59% from 31.5 million tons in 2017 to 50.0 million tons in 2018, with major assets contributing to a rise from 21.1 million tons to 41.9 million tons[101]. Financial Performance - The total operating EBITDA for Yancoal was AUD 2.18 billion, an increase of AUD 1.19 billion compared to the previous year[8]. - The company reported a net profit after tax of AUD 852 million for FY2018, significantly up from AUD 229 million in FY2017[9]. - Operating EBITDA reached AUD 2,180 million, more than double the AUD 988 million recorded in 2017, indicating a 120% increase[11]. - The company achieved a net profit after tax of AUD 852 million in 2018, compared to AUD 229 million in 2017, reflecting a 271% increase[11]. - The operating cash flow for 2018 was AUD 1,747 million, up from AUD 408 million in 2017, marking a 328% increase[12]. - Total revenue increased by 80% from AUD 2,716 million in 2017 to AUD 4,891 million in 2018, primarily driven by coal sales revenue rising 81% from AUD 2,623 million to AUD 4,740 million[110]. - The company reported a significant increase in employee benefits, rising by 72% to 518 million AUD in 2018[106]. - The company paid an interim dividend of AUD 130 million and proposed a final dividend of AUD 377 million for 2018[158]. Debt and Capital Management - Yancoal reduced total debt by USD 1.4 billion since the acquisition of Coal & Allied Industries Ltd in September 2017[8]. - The company’s net debt decreased to AUD 3,093 million in 2018 from AUD 4,516 million in 2017, resulting in a net debt to equity ratio of 35%, down from 43%[12]. - The company plans to repay an additional USD 500 million in loans, reducing total debt by USD 1.4 billion compared to September 2017[147]. - The company raised AUD 268 million through its listing on the Hong Kong Stock Exchange, which will be used for debt repayment and general corporate purposes[22]. - The company’s financing arrangement includes a nine-year secured bond issuance for up to $950 million, aimed at supporting its asset interests[80]. Operational Efficiency and Cost Management - The company’s cash cost per ton (FOB) was AUD 63, slightly up from AUD 62 in FY2017 due to inflationary pressures in the coal mining industry[9]. - The average cash operating cost per ton, excluding government royalties, increased from AUD 62 in 2017 to AUD 63 in 2018, primarily due to a 123% rise in diesel costs[98]. - The average selling price of thermal coal rose from AUD 102 per ton in 2017 to AUD 123 per ton in 2018, while metallurgical coal prices increased from AUD 165 per ton to AUD 182 per ton[40]. - The company maintains strict cost control measures to ensure operational efficiency[190]. Safety and Environmental Initiatives - Safety training improvements led to a reduction in the total recordable injury frequency rate from 10.43 in 2017 to 7.74 in 2018[22]. - The company has established systems and procedures to collect and calculate required data for greenhouse gas emissions reporting[186]. - The company invested over AUD 800,000 in community support programs in Australia during 2018, focusing on health, social and community initiatives, environmental projects, and education and training[55]. - The company is actively supporting the development of low-emission technologies to reduce downstream emissions associated with coal consumption[52]. Future Outlook and Strategic Plans - The company plans to increase salable coal production to approximately 35 million tons in 2019, up from 32.9 million tons in 2018[16]. - The expected cash cost for 2019 is projected to remain stable at around AUD 62.5 per ton, compared to AUD 63 per ton in 2018[17]. - The company continues to explore and expand its tier-one assets, with significant projects aimed at increasing coal production capacity by an additional 6 million tons annually[15]. - The company aims to continue internal growth strategies and optimize its product portfolio to achieve operational efficiencies[36]. - Yancoal's 2019 coal production guidance is approximately 35 million tons[189]. Resource Management and Reserves - The total recoverable coal reserves for Moolarben are 274 million tons as of December 2018[59]. - The total recoverable coal reserves for Hunter Valley Operations are 796 million tons as of December 2018[61]. - The total recoverable coal reserves for the Stratford Duralie project are 44 million tons as of December 2018[62]. - The total recoverable coal reserves for the Yarrabee project are 52 million tons as of December 2018[67]. - The company holds 85% ownership in Moolarben and 82.9% ownership in Mount Thorley Warkworth[59][66]. Market and Sales Agreements - Yancoal has agreed to coal sales agreements with POSCO Australia, with a maximum annual transaction amount of USD 780 million for the fiscal year ending December 31, 2019[189]. - Revenue from Japan surged from AUD 489 million in 2017 to AUD 1,055 million in 2018, representing a 116% increase and accounting for 22% of total revenue[113].