New Hope Aktie

Thank you for standing by, and welcome to the New Hope Group FY '26 Q3 Quarterly Activities Report and Investor Call. [Operator Instructions] I would now like to hand the conference over to Mr. Rob Bishop, Chief Executive Officer. Please go ahead.

Good morning, everyone. Thanks for joining our call today. I'm Rob Bishop, Chief Executive Officer of New Hope Group. I'm joined here by Rebecca Rinaldi, our CFO, and Dominic O'Brien, our Executive General Manager and Company Secretary. This morning, we released our quarterly report for the third quarter of the 2026 financial year. Hopefully, you've had a chance to go through the report, but in any case, I'll briefly step you through our key highlights before we open up the line for Q&A. Operationally, it's been a great quarter for both Bengalla Mine and New Acland Mine, as we're really pleased with our position heading into the final quarter of the 2026 financial year.

While our High Potential Event Frequency Rate improved, we've unfortunately seen a deterioration in our 12-month moving average TRIFR, increasing to 4.43, 17% higher than the previous quarter. The safety of our people remains our highest priority, and we are focused on continuously improvement in these aspects of safety and wellbeing. In terms of our physical performance, we moved 18.2 million BCMs of prime overburden, a 4% increase from the previous quarter, driven by strong mining conditions. Notably, year to date, we've moved 52.9 million BCMs of prime overburden, 13% higher than this time last year. Group run-of-mine coal production was 4.3 million tonnes, up 5% compared to the previous quarter, following an increase in prime overburden movement.

Bengalla Mine continues to see improved operational performance, successfully operating at 13.4 million tonnes per annum run coal production rate during the quarter. New Acland Mine cycled through a higher strip ratio, achieving sustained prime overburden movement. Run coal production was 1.6 million tonnes, 9% lower than the previous period, in line with an increase in strip ratio of 9%. Saleable coal production was 3 million tonnes, 9% higher than the previous quarter, driven by the increased run coal volume at Bengalla Mine. Group coal sales were 3.2 million tonnes, 10% higher than the previous quarter, reflecting strong mining conditions and favorable logistics across the group. Following the increased coal sales, Bengalla Mine achieved an FOB cash cost, excluding royalties of $74 per sales tonne, 12% lower than the previous quarter.

Looking to financials, the group's underlying EBITDA for the quarter was $130 million, 22% higher than the previous quarter, reflecting the uptick in coal pricing. Our average realized price was $140.70 per tonne, a 1% increase on the previous quarter. Realized pricing was affected by the strengthening of the Australian dollar. This impact was partially mitigated by the strong hedge book the group has in place, which covers approximately 50% of the revenues for the 2026 financial year. During the quarter, New Acland Mine was also selling a larger portion of high ash stocks as a result of off-peak seasonal demand, meaning New Acland received a lower realized price when compared to the previous quarter.

The gC NEWC index average price for the quarter was $127.60 per tonne, a 17% increase from the previous quarter. Global coal markets observed favorable pricing movements during the quarter, driven by concerns surrounding LNG availability, resulting in a shift from gas to coal for power generation. The increase in gC NEWC pricing and API 5 pricing has remained strong post the quarter end. Energy market volatility is expected to continue, given the impact the Middle East conflict has had on energy supply, highlighting support for thermal coal generation as a long-term, reliable energy supply. Coupled with an expected supply shortfall due to aging thermal coal assets and underinvestment in new projects, this supports our view that thermal coal pricing will remain above historical averages over the long term.

New Hope's low-cost operations are well-placed to continue providing a source of reliable, secure energy to our customers. During the quarter, the group paid the FY '26 interim fully franked dividend of $0.10 per share or $84 million, and ended up the quarter with a cash and cash equivalents of $572 million. The company successfully placed $300 million of senior unsecured convertible notes alongside the concurrent repurchase of 97.77% of our existing notes. We achieved very favorable terms and reduced near-term financial risk by extending the company's maturity profile to April 2032 at a pre-tax coupon rate of 2.635% per annum.

I'll now hand over to the operator to start the Q&A session.

[Operator Instructions] Your first question today comes from Paul Young from Goldman Sachs.

Rob, really good quarter, certainly from Bengalla and operationally. Just, I'll just start with asking the question on diesel again. We all went through that in the last month, just an update as far as how that's tracking. I know you've said previously that 13% of your site cash costs are diesel, that's on a free-on-rail basis, and the diesel price gets passed through by the rail operator. You said you've had no supply issues near term. Can you just provide an update on the supply situation?

From a supply perspective, we've certainly had positive feedback from our key supplier. At least for the next 2 months, we've been told that supply is not an issue. Fair to say we're monitoring that closely. Obviously, we've got industry looking at it, discussing with government, we're discussing with not only suppliers for site, but also our rail providers, et cetera. At this stage, no cause for concern for the next couple of months. Obviously a lot's happening in the Middle East. Things are changing pretty quickly, we're keeping a good eye on it.

I guess from a cost perspective if you look at the FOB cash costs for the quarter, it was $74 for Bengalla, which is lower than the prior quarter. We are expecting unit cost to increase across the group for the fourth quarter due to diesel prices. From a percentage perspective, I know I sort of stated it in site cash costs in the prior quarterly call. If we look at it from a total FOB cash costs, it's prior to the conflict were about 9% of total FOB cash costs for diesel, which was about $8 a tonne.

We're expecting our full year forecast and that's obviously based on estimates to be around about sort of that $10 per sales tonne. You know, slight increase. It's probably important to note that obviously the increase we're seeing through price realization is far outweighing that. That sort of gives you a feel for the total impact at an FOB level.

Okay. Just on Bengalla had a really good quarter, as I said, you can see in the numbers and you ran at the 13.4 run rate, which is.

Which is great and have been doing that for, I think for a couple of months.

At times, I should say. You know, you're going through the mine fleet sort of replacement or refurb at the moment with a bit of capital to spend. Just as far as that rate's concerned, I know you're permitted for 15. I know you run last time we caught up, you ran through, I think the team ran through 30 different scenarios and the sweet spot was 13.2 to 13.5. But with coal prices where at the moment, can you actually flex Bengalla at all? I know it's obviously a big mine. It's not that simple. Just based on how things are going, is there any flex to go beyond 13.4?

I think to your point when we, I guess we're assessing what we could get out of the pit, that 13.4 is really sort of an average, annualized sort of run rate on average for the remainder of the life of the pit. There will be periods of time when we get very favorable conditions where we would exceed that 13.4. And then obviously when we go through times of wet weather, for example, and have logistics constraints or port constraints, then we may fall short. That 13.4 is really an achievable rate on a longer term basis.

For us to ramp up past that consistently and get to a 14 or 15 rate, that would be very challenging. It would require a fair bit of capital from a particularly from a prep plant perspective and yellow gear perspective, but it would mean significant congestion in the pit. That's one of the key reasons why we feel that's just not sustainable. The 13.4 is really something which is realistic. It's certainly pushing the pit to a, I guess, a level which we can comfortably say is achievable. You know, there will be times when we slightly achieve that if we have a very dry month, for example. We have seen that in the last few months.

We've had weeks where we well exceeded that run rate. The good thing is on a quarterly basis, we've seen a good consistent production level of that. We've sort of I think at the last quarterly call, we gave that guidance that the current quarter end at that point in time was running well and we see a pretty good runway for the end of the year and for years to come.

Your next question comes from Khyla Maher from Barrenjoey. Please go ahead.

I was just wondering, if we look at Q4, if you were able to sustain Q3 saleable production for both New Acland and Bengalla into Q4, you should be able to reach the top end of guidance. I was just wondering if there's anything to suggest that this wouldn't be achievable and you wouldn't be able to achieve towards the top end, like any planned shutdowns or anything else that we should be aware of heading into Q4?

Yes. I think from a guidance perspective, you touched on that. We feel as though we're within guidance and some of the metrics probably at the higher end or the better end, I would say. You know, we're confident that what we can control, we'll perform to that level. You know, having said that, we have been thrown some curve balls particularly with weather in prior years. You know, we feel as though we've put some strong mitigants into our logistics space, for example, where we've procured a number of different suppliers for rail, for example, to cover off any potential downside from a rail perspective.

You know, weather can cause problems. I guess the promising thing is we've come into the end of the third quarter really well-placed. You know, we're certainly on top of, those aspects which we can control. Yes, pretty confident that we'll have a strong fourth quarter.

Yes. Okay. Also just similarly on the sustained CapEx at Bengalla, I know you've spent $58 million to date. To achieve the midpoint, it'd be spending roughly half, like basically that again, just in the final quarter. Are you expecting to come in below guidance, I guess? Or are you still expecting a big capital spend, sustaining capital spend at Bengalla in Q4?

Thanks, Khyla. Yes, you're right. We have been tracking quite low on the sustaining capital. At this stage, we're expecting to come in at the lower end of guidance. A lot of the capital though is required, I guess, by third-party approvals and what have you. There is potential for us to drop below guidance, and if we do drop below guidance, we'll obviously update the market accordingly. At the moment, tracking at the very low end of that range.

Your next question is a follow-up from Paul Young from Goldman Sachs. Please go ahead.

Just a few follow-ups and/or additional questions, actually. Firstly, just on New Acland, Rob, I know you mentioned around the higher ash production in the period, but can you just remind me what kilocalorie or what energy content that coal ash has, and should we be looking at the reference price in New Acland at the 5,500 benchmark or the 6,000 kilocal?

Yes. I have touched on the mix for New Acland previously. We do have a number of specs of coal at New Acland, which we produce, which is similar to what we produced in stage 2. So the higher ash product will be referenced to the API 5 index. I guess, the lower ash, high CV coal will be referenced to the Newcastle index. I think during the quarter, we had about 76% of our coal in the higher ash range, whereas the prior quarter, that was 55%. So certainly as we're ramping up the mine, we are seeing a bit of movement quarter on quarter, depending on which part of the pit we're in.

We'll probably continue to see that a bit as we open up the Manning Vale West pit later this year. Once that's opened up and we've got three pits running at steady state, you should see more of a consistent profile of coal. To answer your question, yes, we do have coals which are referenced to both Newcastle and to API 5.

Okay. Thanks, Rob. Just a question on the thermal market. I know near term your book's generally pretty full and you're still building that long-term customer base and the book at New Acland. If you look at the market at the moment, there's certainly market observations are suggesting that Korea is restocking at the moment. Demand in Europe seems pretty good. Chinese coal inventories are pretty low. Do you have any observations just on the market and incoming inquiries over the next 3 months leading into Northern Hemisphere summer that could suggest a bit of a uptick in pricing?

Well, I think you probably covered off a few points there with regards to China and Korea. We're certainly seeing, what we believe interest from Korea, which would indicate some switching from gas to coal. You know, we believe that it's been pretty dry in China, so their pump hydro, or sorry, their hydro generation is low, so that's obviously meant pivoting to other power sources including coal. That stocks are low, as you said. I think it's got the potential for not only some restocking, but you know, if there is a warm summer in the Northern Hemisphere, which many are predicting, that could see a heightened demand and potentially a fairly quick uptick in price.

I think it's fair to say that throughout this crisis, pricing has probably been a bit more subdued than what we would have thought. I think that's just been due to the fact that stocks were probably high. There was probably unsold stocks, but I think that's sort of edged its way out of the complex. I think now there's a real opportunity given what's happening in the Middle East there is gas shortages. There will continue to be no matter what happens. We feel as though demand if it stays where it is or it increases, it's definitely going to see price maintain or increase fairly materially.

As there are no further phone questions, we will now pause momentarily before addressing questions from the webcast.

Your first question from the webcast asks, during the quarter, you raised a convertible bond, could you please provide some background?

No problem. During the quarter, as I stated in my narrative before, we successfully issued the $300 million senior unsecured convertible, which is due in April 2032. So the fixed coupon for that, very low at 2.625% per annum. I guess comparing that to the prior one, which was 4.25%, so a material benefit there. At the same time or concurrently, we repurchased the existing CV for $293 million, or just over $293 million. That had an existing put option of 12th of July, 2027. So that was nearing. That note could be cash settled.

I guess from a proactive nature, we pushed through this transaction, and that mitigated that risk of having to pay that out in the next sort of just over 12 months away. As I said before, that pushes the maturity date out to end of first quarter 2032. There's probably a few other favorable terms which was realized in that. The coupon rate was low, which I touched on. We've also pushed up our strike price for when it was struck, obviously the conversion price. I think a very good outcome overall, and I think the note was 3x oversubscribed as well.

Very keen investor base there for that type of instrument.

There are no further questions at this time. I'll now hand back to Mr. Rob Bishop for any closing remarks.

No problem. Thanks very much for your time today. I appreciate you dialing into the call and have a great day.

That does conclude our conference for today. Thank you for participating. You may now disconnect.

Good morning, everyone. Thank you for joining us today for today's presentation. I'm Rob Bishop, Chief Executive Officer of the New Hope Group. I'm joined by Rebecca Rinaldi, our CFO; and Dominic O'Brien, Executive General Manager and Company Secretary.

Before we begin, I would like to touch upon the escalating conflict in Iran and across the Middle East. The loss of civilian life and the scale of displacement are deeply distressing. The conflict has hardened concerns around global energy security, contributing to increased volatility across the energy markets, including upward pressure on coal price. The company is closely monitoring the situation and assessing how these developments may impact our operations, markets and broader business outlook, ensuring we respond in a measured and responsible manner. Further updates will be provided in future reporting.

This morning, we released our half year results for the 2026 financial year. Hopefully, you've had a chance to go through the presentation. But in any case, I'll step you through our key highlights before we open up the lines for the Q&A session.

Over the last 6 months, we have seen an unfavorable movement in our 12-month moving average TRIFR, which has increased from 3.22 to 3.8. The safety of our people remains our highest priority, and we are implementing targeted measures to address this trend. Despite a period of recovery at Bengalla Mine, the group maintains saleable coal production volumes compared to the previous period, thanks to the continued ramp-up of operations at New Acland Mine. The group delivered run-of-mine coal production of 7.9 million tonnes, saleable coal production of 5.5 million tonnes and coal sales of 5.6 million tonnes.

In terms of our financial highlights, we delivered an underlying EBITDA of $215 million and a statutory net profit after tax of $54 million, both of which were impacted by lower coal pricing compared to the previous period. Despite softer coal prices and certain short-term operational challenges, our assets remain resilient and continue to generate solid margins, which allow us to maintain returns to shareholders. On that note, I'm pleased to announce the Board has declared a fully franked interim dividend of $0.10 per share.

As I mentioned earlier, we have seen unfavorable movement in our TRIFR and a slight improvement in our all injury frequency rate over the last 6 months. We are fully focused on ensuring our people operate in an environment where they are unharmed. We have several safety initiatives in place to revise this trend and restore the improvement trajectory that we have been experiencing more generally over the last 18 months.

During the period, increased prime waste volumes were delivered at Bengalla Mine, which supported the realignment of the pit sequence following significant weather events across the Hunter region late in FY '25. The reestablishment of the Bengalla Mine prestripping activities resulted in lower ROM coal production and ultimately, saleable coal production compared to the previous period.

At New Acland Mine, the ramp-up continues to progress with the assets delivering healthy increases in both ROM coal production and saleable coal production. Despite lower volumes at Bengalla, the group was able to maintain saleable coal production volumes at a consolidated level, reflecting New Acland Mine's increased contribution to the group.

During the period, the thermal coal market was impacted by economic uncertainty, oversupply and weakened demand, which resulted in lower coal prices. The group's average sale price, including hedging, was $139 per tonne, approximately 20% lower than the previous period, which impacted both underlying EBITDA and cash flows from operations. Despite lower coal prices, the group's low-cost assets delivered a solid margin of $41 per tonne. Our business generated $185 million in cash flows from operating activities, which enabled reinvestment in our assets and allowed continued return to shareholders. During the period, we returned $124 million to our shareholders, representing the fully franked FY '25 final dividend of $0.15 per share.

Regarding -- regardless of pricing dynamics, our portfolio of low-cost assets provides resilience in a cyclical environment and assist to ensure that we continue to generate margins. In a period where the coal price has remained subdued, we were able to generate margins of approximately 30%. This showcases our low-cost nature as well as the significant upside potential available to New Hope and ultimately, our shareholders in higher coal pricing environments.

Our approach to capital management is underpinned by a disciplined focus on delivering sustainable returns to our shareholders. The group's strong cash generation allows us to sustain our current baseline of production whilst also investing in our organic growth profile. Our 2 forms of capital returns are fully franked dividends and on-market share buybacks. The pace of the share buyback has slowed in recent times following increases in company share price. However, it remains on foot to provide us with optionality.

As previously mentioned, our Board has declared a fully franked interim dividend of $0.10 per share. New Hope has had a significant franking account balance, and we'll continue to utilize this value for our shareholders. The dividend reinvestment plan, which we announced in September last year, will be in operation for the interim dividend.

Looking ahead, the outlook for our business remains positive. In the short term, Bengalla Mine is expected to return to its 13.4 million tonnes per annum ROM coal target in the second half of FY '26. In addition, New Acland Mine will continue its ramp up, including the commencement of mining activities in the Manning Vale West pit scheduled for the final quarter of calendar year 2026. We remain confident in achieving our full year physicals and cash cost guidance for FY '26, all of which are tracking strongly. In the medium to long term, we are focused on remaining a resilient low-cost coal producer while executing our organic growth plans, which will enable us to continue to deliver shareholder value.

Thank you very much. I'll now hand over to the operator to start the Q&A session.

[Operator Instructions] Your first phone question comes from Rob Stein from Macquarie.

Just 2 questions on the Iranian conflict. One, diesel inputs into your operations, I'd imagine, are pretty significant. Can you give us a feel for, one, the cost sensitivity that you might experience? And two, just how secure your safety stock is of fuel at this current point in time?

Sure. No problem, Rob. It's certainly something which we are monitoring very closely at the moment. I guess from an impact on the business with regards to price, if we look back, say, the last 12 months, we probably averaged about 13% of our cost base being diesel usage. And then you could probably look a bit further at our rail providers, for example. We do have a direct impact for diesel price through those. So although reasonably material, we're probably not looking at much more than maybe around 20% of our overall cost base to put coal on a boat. So -- and given our -- I guess, our low-cost base, the percentage increase on that is relative. Probably more importantly, the increase in coal price impacts 100% of our book. So although we're going to see a bit of increase in unit cost due to diesel, that should be far outweighed by the increase in coal revenues.

I guess, to the -- to your second point, as I said, we've certainly been monitoring it very closely, discussing it with our diesel providers. We've also been discussing within our own industries, both QRC, New South Wales Minerals Council and the MCA and also with our rail providers and any other influences -- anything which is influenced by price, explosives, et cetera. At the moment, we don't see any near-term risk in supply. We do have good supplies coming through, but we are certainly monitoring it closely and I guess, thinking about how we would prepare for a situation with reduced diesel availability, but nothing on the horizon is looking concerning at the moment.

And yes, obviously, on the flip side, you're seeing pretty good demand for your product, I'd imagine, right now. Has there been a swing in terms of the customer base that you're seeing in terms of whether it's different countries or different providers looking to get access to the raw materials given just the volatility and the change in raw material inputs -- or sorry, the change in energy flows globally? [ New ] customers banging down the door?

I guess in our situation, we've got long-term customers who will continue to take our coal. We sell a very small amount on spot. Our book is well sold out. We have long-term contracts. We're seeing consistent demand. I think it's fair to say that there was a lot of learnings from the Ukraine crisis with regards to security of energy supply. But certainly, as we've seen coal prices have increased and we've seen the direct benefit of that given all of our coal is contracted to the industry. So that is starting to flow through our results for the second half of the year for this group. So -- but I think demand will remain consistent. But I think things could change very quickly if there was a major impact to gas supplies or the like.

And sorry, just a final question. Is that what gave you the confidence to pay that dividend that obviously, the market expectations that sort of was higher in terms of payout ratio than previous periods?

I guess when you look at the dividend, that was based on our view on performance for the first half. I guess we're in a, I guess, a good position that our assets are low cost. And even if you look at the pricing over the first half, I think it's probably fair to say it's near to or at the bottom of the cycle. Given our low-cost nature, we can still pay good dividends and release our franking account asset to the shareholders. It's yet to be seen what will happen with the Iran war over the second half, and we'll think about that as we come into the end of the year.

Your next question comes from Glyn Lawcock from Barrenjoey.

Maybe just any comments you could make. If I look at coal equivalent pricing based on gas pricing, it should be north of $300 a tonne. Any comments you can make on -- I mean, really, the coal price move of like $30 seems quite low relative to all energy -- all other energy. Any observations you could make?

Yes, it's a good observation. And I think it's fair to say that discount has been around for some time now. So as to why that is, there's a lot of factors in that, but that -- I think that discount has just continued. But things can change when it comes to actual supply of gas. That's when, I think, you'll see a tightening potentially if gas is constrained.

Okay. So are you seeing any other sort of movements on coal flows then in terms of -- obviously, now with thermal almost in line with semi-soft, it's not worth washing it, not for you, but for some of your peers. I mean it's not -- you can't change it overnight. But do you think there's a bit of that going on, coal at this price is sort of moving differently from a flow perspective?

I think on your point with semi-soft, it's -- we did see a bit of an increase relative to thermal for coking coal when coking coal, I think, about a month or so ago, increased to about $250, while thermal coal stayed in the low hundreds. But it was pretty -- it wasn't that long ago. And I think now that thermal coal prices has increased relative to coking coal, I don't think we've probably had a chance to see much movement of semi-soft flowing into thermal. I think if that maintains for many months, then you'd probably see that movement.

I think as far as general coal flows, I haven't seen too much change there. I mean our destination for our coal is -- has stayed the same and probably will no matter what the outcome, just by virtue of the fact we've got long-term customers at both operations predominantly into Asia. So we don't have a huge spot book to direct the coal anywhere else.

Yes. Okay. And then maybe just thinking about the dividend. I know you sort of talked a little bit about -- it's all about balancing the needs of the business. But I mean, you brought your cash balance down by almost $100 million over the half. Like where do you see that cash balance going? I mean you've got competing needs, another 12 months of CapEx and then you're probably out the back end. You got your convertible note in 12 months' time to deal with that potentially. But as you've said on the previous call, probably unlikely to be put to you at the current share price. Where do you think the business needs to sit long term cash-wise?

So I think if you look at our capital requirements at the moment, the focus is capital into the business for the Acland ramp-up and some fleet replacement at Bengalla. We've got some guidance in the results, which talk to that. So that's certainly a focus on the best use of our funds to ensure the ramp-up at Acland to that sort of circa 5 million tonnes annualized production and also consistency of production at Bengalla. So that's first and foremost.

And then really, you've already touched on the convert. So we're aware of that. We're managing certain outcomes which might come from that. And then really, it's focusing on returning value to shareholders through fully franked dividends. And obviously, a price increase, there's probably a fairly strong correlation between dividends and price. But it's a pretty uncertain time with what's happening in Iran. And we don't want to get ahead of ourselves and assume that, that increase coal price is going to stay, but we'll keep following it.

And then just finally, I know you probably saw Port of Newcastle and you follow it closely. Shipments were an 8-year low for the month of February, but the weather wasn't bad. Was there something going on that saw an 8-year low for February exports in the valley? Anything you want to call out in your ops?

Yes. I mean it's been heightened for some time now, and you've seen that flow through our results at the beginning of the first half of this year. We had weather impacts, which predominantly was logistics related and same with our result for the final quarter for last year. So I think the fact that it's at an 8-year low, there's always going to be record set, but it's good to see the port freed up down there and ships getting out. That certainly helps the whole industry.

So there's nothing untoward in your first 6 weeks of your next quarter for Q3 at all to call out?

No.

[Operator Instructions] Your next question comes from Daniel Roden from Jefferies.

Just wanted to ask a quick clarification just on your pricing and contract mix over the next 3 to 6 months. So I note that you've forward sold for the next 3 months. So I just wanted to clarify if there were any hedging that you've undertaken over that period just to consider.

Yes. So we've got some, I guess, existing hedging in place, and then we've also placed similar hedging in the last couple of weeks off the back of, I guess, heightened forward pricing.

I guess just to clarify on that, that's all paper hedging as well. It's not physical.

Yes.

Okay. And I guess just on the Bengalla recovery, can you provide a little bit of, I guess, color around returning. You mentioned returning to that 13.4 million tonnes per anuum run rate. Is that consistent across the entirety of, I guess, the second half? Or should we just be flatlining that run rate? Or are you still seeing, I guess, the realignments and pre-strip recovery, like are you going to see a bit of a ramp-up in that capability and that's probably more of an end run rate?

It should be consistent for the majority of the half. The first half was really about, I guess, overcoming those initial issues to wet weather and resequencing, but it should be a fairly consistent second half, obviously, excluding any unforeseen impacts due to weather, but now it should be sort of back to where the growth project projected it to, to that 13.4 million annualized.

And is that consistent with, I guess, the strip ratio and I guess, costs as a derivative of that? Like strip ratios are back to kind of 4x?

Yes. I think there's probably some guidance there, but yes, it's more back to life of pit expectations. Obviously, there will be some swings and roundabouts between months. But on average, it should be pretty consistent.

Yes. Awesome. And just one last one for me. More of just financial kind of nuance, but depreciation was probably a little higher in the period. Just wanted to, I guess, understand, I guess, where that step-up is? And should we be carrying that forward? Is it just increasing in overall business activity and additional purchases from equipment like having a heavy machinery kind of stuff? Or is it just one-offs?

So it's 2 main things, Daniel. So one, it's the completion of the growth project at Bengalla. So you might remember, we -- that was about $200 million, which came through to really uplift that production capacity and get us to that 13.4 million. So now we've seen almost a full 12 months of all of that equipment and infrastructure coming through that D&A line. And the other one relates to Acland. So in there, you would see, I guess, in the 31 July '25, you'll see commentary about the box cut. So that was opening up that Willeroo pit. So those additional costs to open up that pit are capitalized and then amortized. So you shouldn't see those big jumps now, and we should almost start to see that slowly unwind but for general sustaining capital come through the business. Keeping in mind, we do have that final $130 million at Acland spend to get to Manning Vale West. So that, again, will impact that D&A line.

Thank you. There are no further phone questions at this time. We'll now address your webcast questions.

Your first question asks, Indonesia is still putting on export controls on thermal coal export. What is the upside to -- sorry, what is the upside to steaming coal?

Yes. So that happened some time ago, and we did see some, I guess, inflationary impacts on price. It's probably been overshadowed now by what we're seeing in Iran. So it's hard to sort of unpick what the impact of Indonesia is, but certainly, the Iran conflict has had quite a material push up in price.

Your next question asks, why have you extended the on-market share buyback?

Yes, sure. So I guess, our capital management strategy, which you see on the slide just points to opportunistic and flexibility in our share price. So where we've seen a significant reduction in our share price and we really feel our assets are undervalued, that's when we will buy back shares. So having that flexibility and that optionality to jump into the market when we see value, that's why we turned it on or kept it turned on, and we'll continue to monitor the share price and be active when we see value, putting aside the fact that, at the moment, the best way to return shareholders' funds or value is through dividends.

The next question asks, you have provided guidance on the growth capital at New Acland Mine for around $130 million. What is the timing expectation on that spend?

So that should be over -- roughly over the next 12 months. So we've awarded the contract for -- so this is for the road realignment, so we can open up Manning Vale West pit, and that essentially gives us the pathway to ramp up to the 5 million product tonnes per annum. So roughly over the next 12 months, we'll be executing that capital.

Thank you. There are no further questions at this time. I'll now hand back to Mr. Bishop for closing remarks.

Thank you, and thanks all for dialing in. Thank you.

Thank you for standing by, and welcome to the New Hope Group FY '26 Q2 Quarterly Activities Report and Investor Call. [Operator Instructions]

I would now like to hand the conference over to Mr. Rob Bishop, Chief Executive Officer. Please go ahead.

Thank you, and good morning, everyone. Thank you for joining our call today. I'm Rob Bishop, Chief Executive Officer of New Hope Group. I'm joined here by Rebecca Rinaldi, our CFO; and Dom O'Brien, our Executive General Manager and Company Secretary. This morning, we released our quarterly report for the second quarter of the 2026 financial year. Hopefully, you've had a chance to go through the report. But in any case, I'll briefly step you through our key highlights before we open up the line for any Q&A.

Operationally, it's been a solid quarter, and we're really pleased with the results for the first half of the 2026 financial year. We have seen a deterioration in our safety performance for this quarter with our 12-month moving average TRIFR increasing from 2.61 to 3.8. The safety of our people remains our highest priority, and we are taking focused action to reverse this trend and restore the improvement trajectory achieved over the past year.

Group run-of-mine coal production was 4.1 million tonnes, up 5% compared to the previous quarter, following a strong mining performance at both operations. Saleable coal production was 2.8 million tonnes, 3% higher than the previous quarter, driven by an increased focus on coal mining at New Acland, partially offset by lower production at Bengalla Mine driven by the 7-day planned shutdown of the prep plant in December. Group coal sales was 2.9 million tonnes for the quarter, 8% higher than the previous quarter, reflecting improved logistics across the group.

In terms of financials, the group's underlying EBITDA for the quarter was $107 million, which was in line with the previous quarter. Our average realized price was $139 per tonne, a slight increase from the previous quarter, following improvement in both gC NEWC and the API-5 price.

Turning to our half year results. Prime waste movement was 34.7 million bcms, an increase of 13% compared to the first half of the 2025 financial year. The increase in waste movement is driven by the continued ramp-up of the New Acland Mine and the realignment of Bengalla Mine's pit sequence following the significant weather event in the last quarter of 2025 financial year.

Group run-of-mine coal production was 7.9 million tonnes, a decrease of 4% compared to the previous half year period, reflective of Bengalla Mine's focus on pre-stripping, partially offset by a decrease in New Acland's mine strip ratio. The group produced 5.5 million tonnes of saleable coal and sold 5.6 million tonnes of coal, both slightly higher than the previous half year result.

For the first half of 2026 financial year, the group achieved an underlying EBITDA of $215 million, reflecting a 59% decrease compared to the previous half year period. This result was driven by a considerable reduction in group's realized price for $173 per tonne to $138 per tonne, following a decrease in benchmark coal prices.

As at 31 January 2026, the group's available cash balance was $616 million. Looking ahead, we remain confident of achieving our full year physical and cash cost guidance. New Acland Mine has performed above expectations to date, and we expect the operation to finish towards the higher end of its guidance range on coal volumes. In addition, Bengalla Mine is expected to return to the 13.4 million tonnes per annum ROM coal production rate during the second half of the 2026 financial year.

Following a combination of both capital optimization and timing of spend, Bengalla Mine's 2026 financial year sustaining capital guidance has been reduced, reflecting our flexibility and disciplined approach to respond to market conditions.

The company remains focused on increasing our production base and continuing to remain a low-cost producer. We are pleased with the performance in the first half of the financial year and we look forward to a productive and safe second half.

I'll now hand over to the operator to start the Q&A session. Thank you.

[Operator Instructions] Your first question comes from James Williamson with Bell Potter.

Are you able just to elaborate on where you're finding the savings in regards to the lower Bengalla sustaining CapEx guidance? And is this essentially sort of pushing it out into later periods?

Yes. Thanks, James. Good question. So that is -- it is twofold. So part of that is not pushing the capital out, but just certain delays that we're experiencing with approvals, we're required to undertake some of that capital. So some of it is slowly pushing out into FY '27. But there's also a bit of a program we're running at the moment to really optimize the capital profile for everything else and make sure we're responding to the current soft coal conditions. So optimizing in terms of looking at pricing and looking at criticality and really making sure we're making the best decision for the business.

Yes. Understood. And then maybe just on New Acland, are you able to run through the weather impact there and if you've seen that ease into this quarter and whether or not that lower waste movement carry through to mining going forward? Will that impact anything going forward?

Are you referring to Bengalla, I think that's probably...

Sorry. Yes.

Yes, sure. So I guess the Bengalla, as we've touched on in the prior quarter, it had a fairly challenging start to the year. Essentially, the plan for the first half of the year as we go into the second half is to really, I guess, align the pit sequencing there. We have seen a slightly higher strip ratio as a result of that. And we will see fairly large volumes being moved in the second half of the year to get back to that 13.4 million tonne ROM run rate. So yes, that pit achieved that in the past. So it is doable and proven. Unfortunately, we've just had weather impacts, which has inhibited us from pulling together a full year at that rate. So second half is really about getting back to that long-term run rate of the 13.4 million tonnes.

Yes, cool. And then sorry, also at New Acland, you said you experienced weather delays as well, and there was a 14% reduction in waste movement there. Have you seen that ease going into the current quarter?

So Acland is going strong. You would have seen from the result. We've seen really good productivities of late, and we expect to sort of hit, I guess, the higher end of guidance at Acland. Certainly, when we -- I think when we caught up with you at the beginning of the year, we did have some concerns around logistics. It's fair to say that the logistics providers for both the above and below rail have really stepped up and supported us up on our ramp-up. So we're really pleased with their support, and that's really allowed Dave and the team on site to really crack up that mine and sort of head well towards achieving that 5 million tonnes per annum to get to steady state.

Great. And then are there any sort of rail outages scheduled for the remainder of FY '26 that we should be aware of there? Or is it -- and how are you managing those?

There are. There are scheduled outages, but we've got that in our plan. Previously, our issues were around unscheduled outages. So we're confident, as I just said, with both QR and Aurizon really rising to our request to provide the rail to get product off site. So yes, there are scheduled outages, but our plan takes that into account. And we're confident we can get to that higher end of the guidance.

Your next question comes from Daniel Roden with Jefferies.

Just wanted to touch really quickly on, I guess, a couple of capital management things with the Bowen Coking Coal DOCA. Can you quantify the financial guarantee and liability currently on the balance sheet? And I guess when do you expect the P&L and cash flow impacts from that? Is that expected in half 1 results?

Yes. So yes, a good outcome there. Obviously, it was quite concerning when it went into administration. But as you would have seen, made public and per hour quarterly, we've had a good outcome there. So we get fully off risk for the bond, which is $45 million at the moment, and we do get a payment to New Hope of circa $12 million for settlement of outstanding and also future royalty obligations underneath that initial transaction agreement with Bowen. So obviously, there's a few hoops to go through with creditors and further approval, but we're confident that, that will go through and I think probably in the next 2 months. Yes, the cash will come. So good to be able to get a clean exit from that asset and what is a pretty positive outcome for the group.

And I guess just to add, sorry, Rob, you'll see the accounting impacts come through our half year results. So you'll recognize in the previous years, we have written off or provided for certain bad debts, essentially. So that amount -- those amounts that went through the P&L will be reversed in the 31 Jan result, which will come out in March.

Yes. Yes. That makes sense. And is that -- I guess, does that cleans everything related to the Bowen Coking Coal? Or are there still other, I guess, things that will be carried on the balance sheet post?

No, that will be it. So clean exit from that asset.

Yes. Awesome. And a good result there. And you called out the convertible notes just in the quarterly. I just wanted to touch on how you're thinking about, I guess, those from, I guess, a refinancing and cash settlement perspective. Like what are you looking for in terms of market conditions? Is it just price and I guess, utilizing the cash balance on -- that you've got at the moment and [ debt ], how do you think about that?

Yes. Thanks for that. So I guess, like you touched on in the quarterly, we are looking at all methods of financing. We do have that put risk coming in about 18 months, which if the conditions aren't great at the time in terms of share price, we expect that bond will be put. Today, probably won't be put given where the share price is. When we look at other financing opportunities, we have to look, obviously what's available, being a thermal coal producer, but the hybrid market is really favorable for us. So being either just a straight hybrid or those convertible bonds.

In terms of pricing, we expect pricing to be pretty competitive to the existing bond on foot, which is at 4.25% coupon. So there's a few things that we've got our eye on. We don't need to rush to do anything. We've got time, but we want to make sure we're in front of that potential put date.

Yes, makes a lot of sense. Okay. And maybe just last one from me [indiscernible], but I just wanted to touch operationally. You noted that you've, I guess, forward sold 3 months of, I guess, coal. I guess what's the structure of that? Is that fixed and indexed? Are they obviously tied to the NEWC and API-5 linkages? I assume you've got FX assumptions in there, like you're pretty confident on that forward sales structure if there is a change in the underlying market?

Yes. So that's right. That 3 months sold forward contracts are linked to both high-ash and low-ash indices. Yes. FX-wise, yes, that's obviously increased a bit. We do have some fairly favorable hedging in place for the group. So although it's ticked up over the $0.70 mark, we're hedged below that. So our planned expectations to take that into account.

Yes. And I assume you have a fair bit of, obviously, good visibility on the quality of those sales over the next 3 months because you have seen, I guess, a higher yields, higher quality, particularly out of Acland, I guess. Are you expecting that to continue over, I guess, kind of calendar '26? Or like do you see a reversal in? Like when do you expect that to happen coming back to normalization?

Yes. So for Acland, the quality coming out is a bit of timing at play at the moment. So you probably would have noticed in the first quarter, we had probably a higher portion of high-ash coal. Second quarter, it was probably positioned more towards low-ash. We expect over the -- as we ramp up that to sort of settle back to sort of 60-40 split or thereabouts between the high-ash and low-ash, obviously, the majority of it being the low-ash coal. So really, just a bit of timing at play. As we ramp up, obviously, we're in 2 pits at the moment. We're looking to get into the Manning Vale West pit back end of this calendar year, and that will give us our sort of ability to get the right blend of product as we mine it.

[Operator Instructions] Your next question comes from Glyn Lawcock with Barrenjoey.

Just a couple of quick ones if I could. So just the cash from operations was pretty much as expected, but you finished with a bigger cash balance than I think myself and the market thought. What was CapEx in the half? Are you sort of talked a little bit about what you're going to spend on sustaining at Bengalla? But I just wondered what CapEx was like.

Yes, sure. Thanks, Glyn. It was lower than what we originally thought. So you'll see in the quarterly that we have got the sustaining capital, which was below expectations. I guess that's partially the reason why we reduced guidance down. So there is timing implications that have come through there but also just overall optimization. So that's led us, I guess, increase that cash balance a little bit more than what we originally thought.

Okay. So we have to wait for the half for the final CapEx number, I guess.

The overall CapEx, yes. The sustaining for Bengalla is in there. But yes, the Acland one, obviously, that's it, that will be in the half.

Yes. Okay. And then maybe, Rob, just staying on Bengalla, obviously, costs are trending towards the bottom end of the range. Back half, you talked to increased volumes and lower strip ratio. Where do you think Bengalla goes over the next 6 and sort of 18 months from a cost perspective?

I think Bengalla is really driven by, obviously, unit costs driven by volume. As we've touched on, we have seen, I guess, a challenging start to the year, having to, I guess, reset the pit. So we have seen an increase in cost compared to prior year. And that's really part of it is the strip ratio increase. But per the quarterly, you'll see that come off a bit. And I think as we ramp up to that 13.4 million ROM, you'll see volumes up again, and you'll see cost decrease.

So obviously, there's some uncontrollables in there with regards to just general cost of mining is increasing. We control what we can. Labor costs are increasing, all those things, but ultimately, if we can keep pushing the volume out, that's where our benefit is from a cost control perspective.

So prior year's achievable, do you think? Or has there been other headwinds that prevent that from happening?

I think we'll get back to closer to what prior years are. Ultimately, again, it's really volume driven. Obviously, anything controllable on site, we will do just as things out of our player fuel costs and the like. If you see an increase in the price per barrel, that will flow through the business in diesel price, explosives. But ultimately, it's usually correlated with an increase in coal price. So I think what you'll see is if our cost base increase, you'll see that across the whole industry. But really for us, focus on what we can control, that's moving safely and productively and that ultimately keeps our unit cost down.

Yes. And then just on the gC NEWC 6000, it's lifted up in the recent weeks. I mean it sort of lagged the met coal market. Has this been more the met coal market price dragging up gC NEWC or do you think there's something else at play from a supply and demand perspective that's seen the recent lift?

It's probably a few things. You would have seen in the market that Indonesia has put constraints on production that's pushed up particularly the high-ash market into China. That ultimately, as that creeps up, that provides a bit of underpinning for the NEWC. You would have seen also potentially a modest volume of semi-soft coming out of the Newcastle index or the market. So that obviously benefits the price as well.

So I think, yes, we've seen an increase. Will it stay there, will it come down or will it go up? We kind of feel as though where it is at the moment sort of in the $110 mark between $110, $120 is probably sustainable. I don't see a big catalyst for it to move significantly north but nor do we see it moving down dramatically with that high-ash moving into the 80s. I think there's a justification there that we should see pricing move forward roughly where it is.

All right. That's great. If I could squeeze the last one in. Just Anglo, the sales process has restarted. Is that something that New Hope and yourselves are thinking about? Or is it completely off the agenda for you guys?

So yes, that's right. We've been approached on that. Anglo, I can just sell the whole portfolio as one. We're not interested in the whole portfolio.

Your next question comes from Rob Stein with Macquarie.

Just a quick one, capital allocation. How should we think about the upcoming decision that's in front of you and the Board around what to expect around allocation given the cash balance, noting the buyback was unutilized in the period?

Yes. So we announced the buyback. I think we've executed about $10 million of that. I think where share price is at the moment, our focus is more aligned with dividends. We've touched on the capital profile in the business sustaining and drive capital execution. So really, in our operations is the focus. Obviously, we're being disciplined with that, trying to minimize that as much as possible, but that's key to ensure the future viability of the assets. And then second to that is really franked dividends.

And can you just -- so just around Malabar, can you give us a bit of an update, just a bit more color on how the project is tracking and what it's capable of over the next 12 to 24 months? And how do New Hope shareholders are going to extract a return from that investment?

Yes. So Malabar is going well. It's on track to hit first longwall coal towards the back end of this first quarter is the expectation. So as you may recall that there's 2 operating pits there, there's a Bord and Pillar pit, which is starting to really bed itself down, get some good productivities there to put it in a profitable position even at these quite modest prices. But really, the focus is getting development completed or well installed and ramping up the longwall for the first panel.

So from an infrastructure perspective, things are going really well on the surface, overland conveyors, commissioned longwalls, all teething issues have been removed, crews have had good training, and that will look to really underpin the performance of that longwall once it's installed. So that install is happening days away now. They're firming up the final mining of the face road and installation should go to plan, given that it's been on surface for quite a while now.

So really positive time for the crew down there and Wayne and the management team. So it's really about bedding in that first longwall, continuing to get development aligned with that, ensure we've got enough development float as we get into the second and third and fourth longwall panel.

In terms of how sort of cash flows from that vehicle back to New Hope, when are you -- what can investors expect around a return on investment, noting the asset does have debt against it? How should we think about that?

Yes. So that's still a little time away, and that's not -- that was in the plan. Obviously, it's a new underground operation. So obviously, the -- I guess the key milestone here is getting to a point of positive cash generation. As you touched on, there is a couple of debt pieces in there to allow it to get to this point. So we'll be looking in the coming years to look for dividends. Obviously, that's going to be driven by not only productivity but also pricing. So -- but fundamentally, the assets, solid. Conditions are really good underground. We expect the longwall to achieve what we thought it would when we first got into the operation. And obviously, once debt's covered off, then we'll look forward to some good distributions, which will benefit all shareholders including New Hope.

Thank you. There are no further questions at this time. I'll now hand back to Mr. Bishop for closing remarks.

No problem. Thanks very much for everyone dialing in. We appreciate you coming into the call. Have a great day.

Thank you. That does conclude our conference for today. Thank you for participating. You may now disconnect.

Thank you for standing by, and welcome to the New Hope Group Quarterly Activities Report August to October 2025 Quarter 1. [Operator Instructions] I would now like to hand the conference over to Mr. Rob Bishop, Chief Executive Officer. Please go ahead.

Good morning, everyone. Thank you for joining our call today. I'm Rob Bishop, Chief Executive Officer of New Hope Group. I'm joined here by Rebecca Rinaldi, our CFO; and Dom O'Brien, our Executive General Manager and Company Secretary.

This morning, we released our quarterly report for the first quarter of the 2026 financial year, which includes our guidance for the year ahead. Hopefully, you've had a chance to go through the report. But in any case, I'll briefly step you through our key highlights before we open up the line for the Q&A.

It's been a solid start to the 2026 financial year. Most importantly, our safety performance continues to improve with our 12-month moving average TRIFR decreasing to 2.63 at the end of the quarter, which was 18% lower than the previous quarter. It's pleasing to see our safety measures improve our successive quarters, and we continue to make this a key priority.

Operationally, both sites performed well during the first quarter. We moved 17.1 million bcms at prime overburden, a 6% increase from the previous quarter, driven by improving mine conditions. In addition, we produced 2.7 million tonnes of saleable coal, an increase of 7% compared to the previous quarter, largely reflecting the easing of logistical and site stock constraints at Bengalla mine.

Following significant weather events in the July quarter, Bengalla mine recorded improved operational performance and continues to focus on realignment of the pit sequence. Saleable coal production was 2 million tonnes while coal sales were 1.9 million tonnes, both increasing by over 20% compared to the previous quarter with the CHPP maximizing washed product ahead of its 7-day planned shutdown in December 2025.

Following the increased coal production, Bengalla mine achieved an FOB cash cost, excluding royalties, of $83 per sales tonne, 18% lower than the previous quarter. At New Acland mine, the focus was on prime waste movement, which increased by 14% compared to the previous quarter. Saleable coal production was 0.7 million tonnes, and coal sales were 0.8 million tonnes, both lower than the previous quarter as we process some of the lower yielding coal on stock.

In terms of financials, the group's underlying EBITDA for the quarter increased by 16% to $108 million, largely driven by increased coal sales at Bengalla. Our average realized price was AUD 137 per tonne, a slight increase from the previous quarter following improvements in both gC NEWC and the API-5 price. During the quarter, the group paid the FY '25 final fully franked dividend of $0.15 per share or $126 million and ended the quarter with available cash of $544 million.

As I mentioned earlier, today, we released the group's 2026 financial year guidance, which is targeting saleable coal production of between 10.2 million and 11.5 million tonnes. This outlook reflects an increasing contribution from New Acland mine and production at Bengalla mine maintaining a relatively stable state, despite the flowing effects from significant weather and downstream logistics challenges which impacted the 2025 financial year. Overall, we are looking forward to a productive and safe year ahead and continue to remain a low-cost producer.

I'll now hand over to the operator to start the Q&A session.

[Operator Instructions] Your first question today comes from James Williamson from Bell Potter.

I might just start with New Acland. Can you just elaborate on what you're now required to do following the Queensland government change in the Stage 3 conditions around the construction of the new rail loop? And what CapEx is required or potential CapEx savings as a result of that decision?

Sure. I'll -- Dom O'Brien here. I'll take that one. Significant change recently was the Coordinator General's decision to delete the requirement for us to build a dedicated rail loop at the mine. This is probably the most significant change in the approvals process since we commenced our ramp-up activity really going back a couple of years now.

The main issue with the rail loop was that it was originally proposed back when the footprint of the mine that we applied for was proposed to be much bigger. And as we went through a very protracted approvals process, we really, at the end of that, ended up with a suite of approvals that saw the mine continuing to operate at the same levels as it has done historically. So in that context, it didn't really make any sense to build a dedicated rail loop, and there was some very legitimate questions about the utility of it.

So we explored with the Coordinator General the option of deleting that rail loop and looked at other conditions around enhancing the local road network that we would continue to use as we have done historically. And we also looked at some options around further enhancing community investment to deal with any impacts that were associated with that change. So we went through what we thought was a very useful and sort of sensible process, and we resulted in an outcome that was quite balanced through the deletion of that rail loop. And sort of most importantly as well, it's enabled us to scale back the footprint of the mine, and we also result in not having to disturb over 100 hectares of land. It will just remain as it is. So a range of benefits there.

On the capital aspect to it, the headline number for building that rail infrastructure that we had estimated previously was about $120 million. So we save that upfront. There is, however, investment that gets repurposed into the local roads network, and that sort of smooths that capital profile over the life of it.

Great. Maybe just another question on Bengalla. How should we think about the production and cost profile over FY '26 as a result of the pit realignment happening? And is the focus sort of in the first half on pre-strip with production and sort of cost to improve across the year?

Yes. So as you would have seen in the quarterly and at the end of the quarter last year, we had significant rain events and logistical constraints, which impacted our FY '25 year, which that obviously, I guess, changed the profile of the mine planning for the pit last year and then that continued into the first quarter of this year. So for the remainder of this year, it's really aligning the pit, laying back the high wall to ensure we can get the pit back in sequence.

So this year, you will see a slight increase on FOB costs, and that's really just driven by, I guess, a short-term heightened strip ratio off the back of that pit realignment. And then moving forward, once that's back in sequence, you'll see that the strip ratio will come off, and we'll achieve sort of that 13.4 million ROM, which was indicated as part of the growth project, and you'll see the unit cost come back down to a more consistent longer-term rate.

Great. And then just another one, if I may, on balance sheet, and then I'll pass it on. But even if you remove the dividend payment, your cash balance is still down around -- I calculate around $37 million. Is that sort of just a result of CapEx and/or how should we think about the CapEx profile across FY '26?

Yes, sure. So I mean, the cash balance is down because of the dividend, but also we acquired an additional 3% in Malabar. So that was around $36 million that transacted towards the end of September. So that kind of bridges that gap per the original for the previous quarter. I guess this year, we do have a heightened capital profile at Bengalla. There is capital in there that we are required to do over the next 12 to 18 months, and we're also looking at a fleet replacement for the trucks, which we've talked about in previous reporting documents. We are looking at financing those trucks to really smooth that cash profile, while the coal price is still sitting at a relatively low level. But overall, I think the balance sheet is in a pretty good state, and we'll continue to manage capital as we need.

[Operator Instructions] Your next question comes from Glyn Lawcock from Barrenjoey.

Just a couple. Firstly, any comments you can make around how we should think about New Acland, its costs in '26, say, relative to last year?

Yes. No, it's a good question. I think Acland and obviously, guidance, we haven't included that in the past really because it's in ramp-up. So we'll obviously combine that into the group guidance moving forward. But for now, while it's in ramp-up, it probably doesn't send the right message with regards to costs. Once it gets to a steady state, it will sit in the low 90s for -- so that's the cost to put it on the boat, so FOB cost. And really, the difference between if you were to compare Bengalla and Acland is just the rail corridor. So it's not as efficient, smaller trains and less volume going down the trade line. So longer term, when we're running at about 5 million product, it will be in the low 90s at Aussie.

All right. That's great. And then just the buyback, it's obviously been in place but inactive all year. You've been returning cash through dividends though. So you're still happy to return cash. Is there -- why the preference for dividends over buybacks once it was put in place but not used? Any thoughts?

Yes, sure. So I guess, yes, we did turn the buyback on when we saw real volatility in the market around that March, April period. We've seen the share price come a lot higher than originally when we entered the buyback, and I think the average buyback price about $3.60. We are still active in the buyback, and we'll look for opportunity when it comes about. But at the moment, given where coal price is and the capital profile, the focus is to maintain a reasonable dividend profile and also utilize the franking account balance we have, which is about $900 million at the moment. So again, we want to put that in our -- the hands of our shareholders. So probably the preference at the moment is dividends.

Okay. No, I appreciate that, Rebecca. And I guess if you have a windfall and prices go back up, then we may supplement it. But right now, just focus on the dividend and the banking. It's just a surprise to put it in place when you really had all that franking to start with, I guess.

Yes, that's right. It's just flexibility really that we like to have.

As there are no further phone questions, we will now pause briefly and address any questions from the webcast.

Your first question from the webcast today asks, regarding future dividend payment, would the management consider to use a large amount of cash reserve as a backdrop to maintain high yield dividend than your competitors to attract more income-seeking investors?

Yes. I guess that it's a good question. And I think one we consider a lot when we come to each reporting period and decide what dividend to pay in line with the Board's expectations. Like I mentioned earlier, we are in a soft period of coal pricing, and we do have a slightly higher capital profile for both operations over the next 12 to 18 months. That's probably where we see the most value is getting our sites, particularly New Acland, ramped up to that 5 million tonnes. So that is, by far, the best use of cash at the moment.

Aside from that, in Bengalla's capital profile, then yes, we would look to reward shareholders with a strong dividend profile. We want to maintain that profile, and we do what we can when we look back over the past 6 months and look forward as to what coal price is doing. But in order -- I guess we did raise a lot of that cash for strategic opportunities. So I can't see us using all of it for dividends, but we would assess the situation at each reporting period.

Your next question from the webcast asks, what mitigation strategies have you put in place to limit the logistics constraints at Bengalla?

It's a good question. So those constraints arose during the significant weather events in the Hunter region at the end of last year, which I touched on before. Yes. We incurred significant rail cancellations during that weather, and there are also issues with labor availability and congestion at the port.

So the focus has really been engaging with the major rail providers since those events. And certainly, we've seen some improvements, but certainly more improvement is needed. We look to other logistics providers as well just to ensure that we cover off any potential downside with a specific rail provider. And we've also looked to increase our overall haulage capacity. So that if there are more constraints, we've got more capacity to deal with.

Your next question from the webcast asks, is the company considering increasing its stake in Malabar any further? If so, are there any active discussions in this regard?

I guess, in short, no, with regards to active discussions. You would have no doubt recall, we've completed 2%, 3% increases in Malabar, and that's really been off the back of being approached by other major shareholders. So we're not actively looking for it. But if we get approached for an opportunity, we assess it on its merits. And in these 2 cases, we've executed on both 3% increases. But as I've said before, projects going well, and we're very happy with the skill set and knowledge of our of other major shareholders in that business.

Your next question from the webcast asks, the proportion of high ash coal sales seems to be increasing in comparison to total sales. Is this trend expected to continue?

So the -- I guess, the sales mix during the quarter was really off the back of sales from New Acland. So we are seeing, I guess, a higher portion of higher shipments scheduled in the quarter. But we will see that come down across the year. And then once we get to full production, you'll see it fall back to that sort of similar percentage split that we saw in Stage 2. So it's really just a timing issue at the moment where we are in the development of that pit.

Thank you. There are no further questions at this time. I'd now like to hand back over to Mr. Bishop for any closing remarks.

No problem. Thanks for dialing in, and thanks for your time today. Have a great day.

That does conclude our conference for today. Thank you for participating. You may now disconnect.

Good morning, everyone, and apologies for the slight delay. Thank you for joining us for today's presentation. I'm Rob Bishop, Chief Executive Officer for New Hope Group. On my left, I'm joined by Rebecca Rinaldi, our CFO; and Dominic O'Brien on my right, who is our Executive General Manager and Company Secretary.

This morning, we released our full year results for the 2025 financial year. Hopefully, you've had a chance to go through the presentation. But in any case, I'll step you through our key highlights for the year before we open up the line for a Q&A session.

Despite a softening coal price and a challenging operating environment, 2025 was a strong year for New Hope, where we delivered another considerable increase in saleable coal production as we continue to execute our organic growth plans.

Pleasingly, we've seen a significant improvement in safety this year with our 12-month moving average TRIFR decreasing by 35% to 3.22. It's positive to see these metrics improving, and we'll continue to focus on this area as we move into 2026.

During the year, we navigated significant wet weather and logistics constraints at our operations in both Queensland and New South Wales. Despite these uncontrollable factors, the group delivered run-of-mine coal production of 16.4 million tonnes, up 33%; saleable coal production of 10.7 million tonnes, up 18% and coal sales of 10.5 million tonnes, up 21%.

In terms of our financial highlights, we delivered an underlying EBITDA of $766 million and a statutory net profit after tax of $439 million. Both earnings results were largely impacted by lower realized pricing with the Newcastle export coal price hitting a 4-year low during the 2025 financial year.

This year, our business generated $571 million in cash flow from operating activities, which funded investment in our organic growth pipeline and has enabled us to continue to deliver returns to our shareholders. On that note, I'm pleased to announce the Board has declared a fully franked final dividend of $0.15 per share. This brings total dividend for FY '25 to $0.34 per share, all of which are fully franked.

Turning to safety. The safety of our people is a key priority, and we are focused on ensuring our people operate in an environment where they are unharmed. As I mentioned earlier, we have seen an improvement in our TRIFR and our All Injury Frequency Rate since we reported to the market last year.

Pleasingly, our TRIFR now sits below the 5-year industry average for New South Wales open-cut coal mines. While there's still opportunity for improvement, it's pleasing to see the safety programs we put in place during the year have had a positive impact across our sites.

Turning to our operational performance. This year, our Bengalla mine in New South Wales faced notable operational challenges due to significant weather events and logistics constraints across the Hunter Valley. These disruptions led to elevated shipping queues, increased rail cancellations and stock management challenges at site.

Despite these headwinds, Bengalla mine delivered a solid performance, producing 7.9 million tonnes of saleable coal, just 2% lower than the previous year's output. Despite lower-than-expected production, Bengalla mine achieved an FOB cash cost, excluding royalties and trade coal, of $76.50 per sales tonne, within guidance range, and a 2% improvement from the previous period.

The ramp-up of our New Acland mine progressed throughout the 2025 financial year, supported by commencement of night shift operations in the prep plant and increased workforce intake. As a result, the mine delivered 2.8 million tonnes of salable coal and continues to ramp up towards its target of becoming a 5 million tonnes per annum operation.

Overall, strong operational performance at both sites contributed to an 18% increase in group saleable coal production, reaching 10.7 million tonnes. Group FOB cash costs improved by 8% to $82.40 per sales tonne.

In terms of our financial performance, the group achieved an average sales price, including hedging, of $161 per tonne and an underlying margin of $64 per tonne. During the year, the thermal coal market was impacted by oversupply, economic uncertainty and a mild winter in Asia, resulting in a softening in coal price.

Despite these market conditions, the group's low-cost assets remain resilient and continue to generate solid margins through the cycle. Our business generated $571 million in cash flows from operating activities, enabled continued investment in our assets, allowing us to return $347 million to our shareholders by way of fully franked dividends. This represents $0.41 per share paid during the period, which equates to a gross dividend yield of 12%.

Our approach to capital management is underpinned by a disciplined focus on delivering sustainable returns to shareholders. Our two forms of capital returns are fully franked dividends and on-market share buyback. As at the end of 2025, the pace of the share buyback has slowed in conjunction with increase in the company's share price. As previously mentioned, our Board has declared a fully franked dividend of $0.15 per share.

New Hope has a significant franking account balance, and we continue to utilize this value for our shareholders. Today and in conjunction with our results release, we announced the introduction of a Dividend Reinvestment Plan, providing shareholders with the option to reinvest their dividends. The DRP is in operation for the 2025 final dividend.

Our group strategy is to safely, responsibly and efficiently operate our low-cost, long-life assets with a focus on disciplined capital management, providing valuable returns to our shareholders. We believe our investment proposition is underpinned by these six key areas, which I'll briefly touch on in the following slides.

The outlook for our industry is strong. Our strategy is underpinned by the belief that demand for thermal coal produced from Australian operations will continue to play a vital role in providing reliable and secure energy supply to the world.

Whilst we expect coal's share of global power generation to reduce over time, the sheer increase in global power demand will continue to support seaborne thermal coal exports into the future. In addition, the aging of existing thermal coal assets, combined with underinvestment in new projects suggest a potential supply shortfall and attractive pricing outlook for the industry.

Regardless of pricing dynamics, our low-cost assets produce high-quality coal, providing resilience in cyclical environment and ensuring continued margin generation. In a year where the coal price has touched multiyear lows, our assets were still able to generate margins of circa 40%, which showcases our low-cost nature as well as the significant upside potential available to New Hope and ultimately, our shareholders.

New Hope holds a key focus on delivering returns to shareholders. In the last year -- in the last 4 years, fully franked dividends have totaled $1.9 billion, which equates to nearly 55% of the company's market capitalization as at 31 July 2025. In addition, New Hope's share price has outperformed the ASX All Ordinaries by nearly 8x since its initial public offering in 2003.

At New Hope, we take pride in our people and the communities in which we operate. We aim to effectively manage our economic, social and environmental impact to ensure the resilience of our business so that we can continue to create stakeholder value.

Key aspect of being a responsible operator is rehabilitation. At our Bengalla and New Acland mines, we have disturbed approximately 3,000 hectares of land for mining operations and rehabilitated 36% of that disturbance. In addition, the majority of our land is used for agricultural operations once successfully rehabilitated.

Looking ahead, we remain focused on the organic growth of our business throughout the continued ramp-up of New Acland mine, the sustained production at Bengalla mine and the development of Malabar's Maxwell Underground mine, all of which are low unit cost assets.

Our pipeline targets a significant increase in coal production over the next 3 years, which represents low-risk, cost-effective growth. Looking ahead to the 2026 financial year, we are focused on remaining resilient, low-cost coal producer while executing our organic growth plans, which will enable us to continue to deliver shareholder value.

Thank you very much. I'll now hand over to the operator to start the Q&A session.

[Operator Instructions] Your first question is a phone question from Rob Stein from Macquarie.

Just looking at Slide 14 of your presentation, you've outlined the growth program or a growth profile. Just sort of chipping into it a little bit more, I noticed the Maxwell mine progressive ramp-up and the long-term rate there providing an indication of absolute volumes.

Just wondering if you could comment on that as to how you see the ramp-up potential of the mine. And then similarly, just looking at the constant sustained basis for Bengalla, just thinking through the long-term CapEx requirements there.

Sure. So I guess with our organic ramp-up, we're looking to double our production from -- I think your first question was in relation to Maxwell mine, Malabar's mine. That is already in ramp up. Bord and pillar pit is fully operational.

And really, the increase in -- material increase in tonnes will come from the longwall pit or the Woodlands Hill pit when we should see first longwall coal first quarter calendar year 2026. So from that projection, and you can see the uplift on that chart, that should get up to around sort of 6 million to 7 million product tonnes from that operation around about sort of FY '29 onwards.

So -- and then I guess, with regards to Bengalla, growth project there has been very successful. Both the prep plant and the pit has achieved targeted production from that growth project albeit hampered by uncontrollable events offside.

So you would have seen in the report, we touched on weather events and resulting logistics impact. So that's hampered us in the final quarter of the FY '25 year, and it continued to hamper us into the beginning of this year, and we'll be putting out guidance for this year, I think, in mid-November.

So just as a brief follow-up, in Maxwell, you've got 6 -- sort of ramping up to the 6 million tonne rate there. That's what we should be looking at modeling and taking forward in terms of a view on the mine's potential?

Yes, I think somewhere in the 6 million to 7 million is what the expectation is. I guess where that asset is at the moment, it's developing up the first longwall panel. So obviously, when you get into a longwall pit, despite all the exploration you can do, you don't really get to understand geological conditions until you're down there.

So that's progressing well. And like I said, we're expecting to get the first year of the longwall in first quarter of next year. So assuming everything goes to plan, that should get up to sort of that circa 6 million to 7 million product per annum.

[Operator Instructions] We'll now move to our webcast questions while we wait for any other phone questions to register.

Your first webcast question reads, with thermal coal now having retraced back to $102 per tonne, what are your views on the state of the market. Anything we could look out for into the second half other than typical seasonality in coal demand in industrial production and renewable energy generation?

Yes, that's quite right. And I think we've almost dipped under $100 for the Newcastle index. So pricing is certainly challenging at the moment. We've seen good, consistent supply across the globe of thermal coal. And we've also seen the impact of low coking coal prices affecting thermal coal with some semi-soft products being pushed into the thermal coal market.

So if you overlay a fairly soft demand for this calendar year, that's obviously put downward pressure on pricing. As to what that's going to do moving forward, it's a good question. I think there could be some restocking as we go into the Northern Hemisphere winter, which is those typical cyclical changes which you mentioned.

But I think our view is we don't see a significant increase in coal prices in sort of the next 6 months or so. I think that oversupply, which I talked about, that really needs to push itself out of the market, and we'll see what this Northern Hemisphere winter brings.

Your next webcast question asks, during the new year, New Hope Group increased its equity interest in Malabar Resources Limited by 3% to 22.98%. Is the business looking to increase its equity interest in Malabar again this year?

So I guess overarching, our key focus is our organic growth, which we've touched on at both Bengalla and Acland. Yes, we did take an additional 3% in the financial year just gone, and that was really off the back of an approach from another major shareholder.

I guess with all M&A, we consider acquisitions as a put forward. But obviously, any acquisition we do would need to meet stringent returns, et cetera. And obviously, with the soft market at the moment, we'd need to take that into account.

Your next webcast question asks, your final dividend is much higher compared to what your peers have announced. Are you able to sustain this level of dividend in the current coal price environment?

Yes, that's a good question. And as always, we like to reward our shareholders with dividends. And I think the $0.15 fully franked, which we announced today, has been well received.

I guess our underlying assets really put us in the position to reward shareholders, the low strip ratio and as a result, low cost, we put a lot of focus on cost control. And as a result, we continue to make a strong margin even in the cyclical lows, which we're seeing right now. So we're confident that's going to continue, and we'll see what this year lies ahead for us.

There are no further webcast or phone questions at this time. I'll now hand back for any closing remarks.

Well, thank you for joining. And again, apologies for the delay in our start, a few technical issues, but it's been a pleasure delivering this result, and we'll see you next time. Thank you.

Good morning, everyone. Thank you for joining our call today. I'm Rob Bishop, Chief Executive Officer at New Hope Group. I'm joined here by Rebecca Rinaldi, our CFO; and Dom O'Brien, our Executive General Manager and Company Secretary.

This morning, we released our quarterly report for the fourth quarter of the 2025 financial year. Hopefully, you've had a chance to go through the report, but in any case, I'll briefly step you through our key highlights before we open up the line for Q&A.

The July quarter marks the end of the 2025 financial year for New Hope. Whilst our final quarter was impacted by significant weather events in New South Wales, our business continues to remain resilient as we increase saleable coal production year-on-year and execute on our organic growth pipeline.

Looking at safety, our 12-month moving average TRIFR was 3.22 at the end of the quarter, which was 12% lower than the previous quarter. Safety will always be a key focus for us, and I'm pleased to say that we have made meaningful improvements in this area during the year with both our TRIFR and our all-injury frequency rate materially improving.

Operationally, our New Acland Mine in Queensland achieved its most productive quarter since recommencement of operations. However, our fourth quarter result was largely impacted by significant rainfall in the Hunter region. Rain and flooding led to logistics constraints, including material increases and rail cancellations and extensive shipping delays at the Port of Newcastle, which impacted operations at Bengalla Mine.

During the quarter, we moved 16.1 million BCMs of prime overburden, in line with the previous quarter despite the dragline at Bengalla Mine being unavailable for 50 days as it underwent planned maintenance. Group Run of Mine coal production was 4.1 million tonnes, largely in line with the previous quarter, with the group strip ratio remaining steady at 4 bcms per tonne.

As I mentioned earlier, flooding across the Hunter region resulted in restricted vessel movements and extended shipping queues at the Port of Newcastle. In addition, rail cancellations caused by both weather impacts and external labor availability led to site stock management challenges with Bengalla Mine becoming stock bound throughout the quarter.

As a result, group saleable coal production was 2.5 million tonnes, 9% lower than the previous quarter. Low production at Bengalla Mine was offset by strong performance at New Acland Mine, which increased saleable coal production by 33% for the quarter, following improved rail performance and increased stockpile capacity.

In terms of financials, the group underlying EBITDA of $93 million was down 40% on the previous quarter due to the lower coal sales out of the Port of Newcastle and lower realized pricing.

Turning to our full year results. Despite a challenging final quarter, our team delivered another strong results this financial year. Group saleable coal production was 10.7 million tonnes, an 18% increase on the previous quarter -- sorry, previous year and within guidance range. Bengalla Mine achieved an FOB cash cost, excluding royalties, of $76.50 per sales tonne within guidance range. This represents a 2% reduction compared to FY '24 and is a fantastic result considering the lower volumes overall and our operational logistic challenges in Q4.

Despite lower saleable coal prices, the group achieved an underlying EBITDA of $766 million, the fourth highest earnings result in the company's history, reflecting our low-cost operations and continued production growth.

We generated $571 million in operating cash flows and finished the year with available cash of $707 million, which supports strong shareholder returns. Overall, in light of the current global market and local weather-related challenges, we are pleased with our ability to remain resilient, low-cost producer, and we look forward to sharing our full year results in September.

I'll now hand over to the operator to start the Q&A session.

[Operator Instructions] Your first question today comes from Daniel Roden from Jefferies.

I just wanted to firstly ask on, I guess, the inventory at both Bengalla and New Acland. So we're hitting quite high inventory levels at both of the assets. And you kind of noted specifically at Bengalla, I guess, [indiscernible] throughput just due to restrictions in, I guess, inventory capacity. I guess what's the expected rate of unwind into, I guess, over the next few periods? And do you have any ability to increase, I guess, site capacity to, I guess, weather a bit more of that inventory build in the near term?

Yes, it's a good question. You're quite right. Stock levels are quite high across both sites. And that's really, as I've mentioned, a result of the logistics impacts, which both sites have seen and particularly at Bengalla.

Unfortunately, I guess, we begin the year with another fairly major weather event down in the Hunter Valley. So we're sitting at probably about 60 ships off the coast from the port, which is hampering getting coal off-site. But I guess having said that, we've had some good interactions with rail provider and with the port, and it is being managed well.

But really is, I guess, reliant on continued good conditions and improving to get that coal off-site. So we're fairly confident it will improve. But obviously, it hasn't been a great end to our financial year and nor the start of the year. But we're confident it will improve, and we're certainly doing everything we can to improve that downstream logistics piece.

Okay. And I guess are there other -- I guess, failing I guess, improved conditions on the rail and shipping, like are there other opportunities you could explore in terms of, I guess, capacity or resource sharing between other operations in your neighborhood?

Yes. I mean we are looking at everything, both from stockpile management. Also the parties we're working with both from a rail and port perspective. We're keeping our options open there, so we can pull the trigger on any pivoting coal to another solution, which will get coal down the line.

But certainly, we've got ample stockpile capacity from a ROM perspective on site. And with the recent growth project, which we've had at Bengalla, which is well bedded in now, we've got the increased throughput through the prep plant when needed.

So I guess we're comfortable that we're doing everything we can, but there is a certain piece of it, which is out of our control, and it's really how we bounce back from that is probably the key thing.

That makes a lot of sense. Okay. And I just wanted to touch as well on the, I guess, the realized pricing. Bengalla's realized pricing, I think, was pretty in line with expectations, but it was quite soft at New Acland. So was that just a function of -- I guess, when I run some numbers on -- quick numbers on a sheet, even accounting for higher ash sales and the change in, I guess, sales mix, I'm still seeing a bit of a soft print. Do you mind shedding a bit more color on, I guess, what the sales outlook -- what happened in the quarter from a pricing perspective there, please?

Yes, sure. So I think if you look at the pricing for the quarter, I guess, the realized pricing was down a bit, I guess, compared to benchmark. But you did touch on the high ash portion. We did have a higher ash portion of sales during the quarter, which did, I guess, push down our average realized price across the whole portfolio across both mines.

That's really just a timing issue. And I think there's also a bit of a lag effect with the pricing as it comes through, given how our contracts are negotiated and constructed. So I guess the key thing is our sort of average of high ash to low ash hasn't changed from historical levels. It's really just a timing issue, which we saw in this quarter.

Okay. And was there a high delivery into domestic contracts in the quarter? And does that have a different pricing, I guess, mechanism behind that?

There is a -- so that's on a fixed term basis for our high ash domestic sales, which is -- the majority of that is at the Bengalla Mine. But yes, I mean, it's not key to a benchmark like most of our export sales are.

Okay. Okay. And I'll slip one more, if I can. The Bowen coking coal, I guess, loan facility, how much of that was drawn? How much is undrawn? And I know that's something that's being watched, but I guess, what are your expectations around that $70 million obligation originally, like do you see that as likely to be recoverable if it's fully drawn by the Queensland government?

So with that facility, we've got essentially about a $45 million exposure for a rehabilitation bank guarantee, which is in place with the government. So that's our exposure there. So that's AUD 45 million. Obviously, it's unfortunate where Bowen is at with administrators and now receivers appointed.

We're obviously keeping a close eye on that. And our expectation is that it's not likely that the bank guarantee will be drawn upon. But at this stage, we just need to see how the administration and the receivership falls out and whether there's a successful sale process out the other side.

[Operator Instructions] Your next question comes from Rob Stein from Macquarie.

Just drilling into the Bengalla issues in a little bit more depth. Can you give us a feeling for in terms of monthly sort of run rates, how you're sitting towards the end of July, how we would expect the operation to respond in the next quarter? Is this -- we're just trying to get a feel for is this a permanent difference or a temporary difference in this catch-up?

It's -- I think essentially, I touched on in the last few questions, the run rate in July -- sorry, in August, which is our first month of our year has been hampered. And again, that's really due to off-site logistics impacts, both at the port and with the rail provider.

It's certainly not a permanent issue. But certainly, our result for August will be a bit lighter than what we would have liked. But certainly, we expect to catch it up in the following months as the logistics piece turns to normal again.

And given overburden was flattish Q-on-Q, are we expecting that those impacts to be sort of worked through as hopefully things dry out and you can sort of catch up on movements to sort of get back ahead of your mine plan?

Yes. I mean we've got the ability to operate in fairly wet conditions now with the recent modification approval. So on-site overburden movement is still pretty strong. We did -- we were impacted by dragline shut during the year just gone.

It was down about 50 days. But certainly, operations on site remains strong. So obviously, when we have been stocked out, we've continued to pivot our operations to continue sort of maximizing overburden movement and ROM production, albeit that we probably leave some in situ while we're waiting for the prep plant to start up again.

But certainly, from an overburden movement perspective, we expect that to remain strong and sort of get to that circa sort of 13.4 million ROM level, which is the key behind our growth plans at recent.

And sorry, just a quick one on Malabar. To your -- from your point of view, construction or ramp-up hasn't been hampered by the wet weather. Things are looking reasonable in that neck of the woods.

Yes. I mean underground operations tend not to get impacted as much by wet weather. There is probably a slight impact with the surface construction for the development, but nothing material, nothing really that would impact getting to first longwall coal, which is due first quarter next calendar year, so calendar year '26.

Your next question comes from [ Jonathan Zhao ] from CLSA.

Just two questions from me. The first one, just given Bengalla's unit cost jumped above $100 a tonne, how should we think about the costs sort of trending into FY '26 as sales normalize? And how long do you think it will take for unit costs to normalize if they do?

So I think Bengalla's unit cost was probably the standout performance-wise. So the figure you're quoting that might include royalties.

So excluding royalties at 76.5.

So I guess a strong result despite the fact that we were hampered with production levels during the quarter. So yes, we expect -- if we had more production, that would have been even lower. But -- so I think moving forward, we expect that to continue. Cost is a big focus for the business. So that will help us remain resilient during these low coal price times.

Okay. And second question for me. You may have already said this in the past, but first of all for me. As Maxwell transitions from development to longwall production and with Malabar's shareholder base expected to likely evolve, how do you think about New Hope's role there? Would you be comfortable remaining a passive investor? Or would you consider taking a more strategic or even being the operator there?

Yes. So you're quite right. It is sort of at the pointy end of its development. The longwall, as I said before, should ramp up, all begin essentially first quarter next year. bord and pillars started to get good consistency as well. So [ Wayne ] and the team on site are doing an excellent job of getting that asset ready for good consistent production.

Currently, from a, I guess, a shareholder perspective, we're sitting just under 23%. We're very happy with the shareholder group.

There are a lot of experienced individuals and all very supportive of the project. If we were approached for more equity, we'd obviously consider it. We've quite often told you the strategic criteria for which we look at investments and Malabar up to now is certainly fit within that criteria.

As there are no further phone questions at this time, we will now pause briefly and address any webcast questions. Your first question from the webcast states: It doesn't seem like you have spent much time on share buyback. Have you put any of that on hold for now?

Yes. Thank you. We have taken a conservative approach with the share buyback. When we announced the buyback back in March 2025, we did see value in the share price and our assets at that point were very undervalued in our eyes. Off the back of March 2025, we have seen significant volatility in the market. And I guess, given this volatility, we really wanted to trade carefully and not rush the pace of the buyback.

So we really pulled it back, as you would have seen with our announcements, and we kind of all in today at $3.60 per share, which is -- we see that as a valuable price to buy back shares. We've seen a big uplift in the share price recently, and we continue to use the share buyback when we see the time is right. But at the moment, we probably see there's more value in dividends for our shareholders.

Your next question from the webcast states, can you please provide an update on mining in the Manning Vale West Pit at New Acland?

Sure. So at this stage, we're targeting Manning to commence in the second half of 2026. To get over to that pit, there's surface infrastructure works that need to happen, including access roads and various other construction pieces. So that is a focus for the moment. And then the intention is to open up the third pit to give us flexibility across the whole mine.