Financial Data and Key Metrics Changes - Yancoal achieved a record production of 10.4 million tons of attributable saleable coal in Q4 2025, contributing to an annual total of 38.6 million tons, also a record for the company [4][5] - Cash operating costs were reported at AUD 93 per ton, within the guidance range of AUD 89-AUD 97 per ton [4][5] - The company’s cash balance increased by AUD 307 million over the quarter, reaching over AUD 2 billion with no debt [5][15] Business Line Data and Key Metrics Changes - Total ROM coal production increased by 20% compared to Q3 2025, reaching 18.9 million tons, while saleable coal production rose by 11% to 13.6 million tons [8][9] - The attributable share of saleable coal was 10.4 million tons, which includes an additional 3.75% interest in the Moolarben joint venture [9] Market Data and Key Metrics Changes - The average realized price for coal improved by 6% to AUD 148 per ton, driven by a 6% increase in thermal coal prices to AUD 138 per ton and a 4% increase in metallurgical coal prices to AUD 203 per ton [5][13] - International coal markets showed mixed performances, with Japan increasing coal imports by 16%, while China’s annual imports fell by 18% due to strong domestic production [11][12] Company Strategy and Development Direction - Yancoal aims to maintain operational momentum into 2026, with guidance on production, cash operating costs, and capital expenditure to be provided in the upcoming financial results [6] - The company emphasizes cost control and aims to deliver unit costs around the middle of the guidance range, reinforcing its position as a leading low-cost coal exporter [15][51] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the operational performance and the financial position, highlighting the importance of disciplined cost control and the ability to leverage improving coal prices [51] - The CEO noted that the company’s strong cash position allows for considerations of dividends and potential growth opportunities [5][15] Other Important Information - The total recordable injury frequency rate improved to 6.14, below the industry average of 7.45, indicating a commitment to safety performance [8] - The company plans to process additional ROM coal that could not be converted to saleable coal in Q4 2025 during the first quarter of 2026 [32] Q&A Session Summary Question: Current stockpiles and inventory levels - Management confirmed that sales and production are back to normal and matched, indicating a strong quarter for both production and sales [19] Question: Comments on New South Wales coal royalties - Management stated there have been no discussions regarding changes to coal royalties in New South Wales [20] Question: Production profile of Hunter Valley Operations - Management reported a strong fourth quarter for Hunter Valley Operations, with effective mitigation of wet weather impacts through prior capital investments [23][24] Question: Insights on coal market outlook - Management noted a slight recovery in coal prices towards the end of Q4, with expectations for demand to pick up post-Chinese New Year [26] Question: Dividend framework and cash balance implications - Management reiterated the dividend framework, indicating a review of the final position after the year-end to determine capacity for dividend allocation [35][36] Question: Free cash flow generation and capital management - Management discussed the strong cash flow generation and emphasized the importance of being cost-competitive while balancing growth opportunities [39][40] Question: U.S. coal import potential - Management clarified that Australia does not supply coal to mainland USA, as the U.S. is a significant coal producer itself [42] Question: Hypothetical scenarios regarding joint ventures - Management refrained from commenting on market hypotheticals, indicating it is too early to form views on potential changes [46]
YANCOAL AUS(03668) - 2025 Q4 - Earnings Call Transcript