• Revenue: $6.9 billion.
• Operating EBITDA: $2.6 billion with a 37% margin.
• Profit After Tax: $1.2 billion.
• Cash Position: Close to $2.5 billion.
• Dividend Payment: $687 million, $0.52 per share, fully franked, 56% payout ratio.
• Attributable Production: 37 million tons, a 10% increase from 2023.
• Realized Coal Price: AUD176 per ton.
• Cash Operating Cost: $93 per ton for the full year.
• Implied Cash Operating Margin: $66 per ton.
• Thermal Coal Sales: 86% of total sales.
• Realized Thermal Coal Price: AUD160 per ton, down 24% from 2023.
• Realized Metallurgical Coal Price: AUD276 per ton, down 22% from 2023.
• Operating Cash Flow Increase: 69% increase, influenced by a $1.4 billion tax payment in 2023.
• Debt Status: Debt-free, except for some lease liabilities.
• 2025 Production Guidance: 35 to 39 million tons of attributable saleable production.
• 2025 Cash Cost Guidance: $86 to $97 per ton.
• 2025 Capital Expenditure Guidance: $750 to $900 million.

• Warning! GuruFocus has detected 8 Warning Signs with SBSW.

Release Date: February 21, 2025

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• Yancoal Australia Ltd (YACAF) achieved its best-ever half-year production performance in 2024.
• The company successfully reduced cash costs in an inflationary environment, with a full-year cash cost of $93 per ton.
• Yancoal generated $6.9 billion in revenue and $2.6 billion in operating EBITDA, with a 37% margin.
• The company returned $687 million to shareholders, representing a 56% payout ratio and a dividend of $0.52 per share, fully franked.
• Yancoal ended the year with a strong cash position of close to $2.5 billion and is debt-free, providing a solid foundation for potential growth opportunities.

Negative Points

• The realized coal price in 2024 was lower than the previous year, impacting revenue, which decreased by 12%.
• Safety performance, as measured by TRIFA statistics, improved but did not reach the desired level.
• Cost inflation factors, such as labor, explosives, and electricity, are now embedded in the cost base, posing ongoing challenges.
• The metallurgical coal market experienced a decline in demand in the second half of 2024 due to weakening steel market conditions.
• The company's production capacity is near its limit, with limited room for significant production increases without further investment.

Q & A Highlights

Q: Considering that the production and cost guidance for 2025 remains unchanged compared to 2024, could you provide additional insights on any potential cost improvement that may arise? A: Brendan Fitzpatrick, Investor Relations Manager, explained that maintaining flat costs in an inflationary environment is a positive outcome. David Bennett, EGM Operations, added that productivity improvements and cost control measures, such as optimizing contracts and reducing cash costs, are key strategies to manage costs effectively.

Q: We have noted an increase in CapEx guidance. Could you elaborate on what's driving the higher CapEx? Is it also because of the inflationary pressure? A: Brendan Fitzpatrick acknowledged inflationary pressures and carryover capital from 2024 as factors. David Bennett highlighted the need for fleet replacements and capital development work to maintain productivity and manage longer haul cycles.

Q: With 29% of sales to China in 2024, how do you see Australian coal exports to China for this year, especially given the lower Chinese coal prices? A: Mark Salem, EGM Marketing, noted that seaborne imports remain cheaper than domestic coal in China, maintaining strong demand. He expects a similar product mix and import levels in 2025, despite price competitiveness challenges.

Q: Could you provide an update on the Moolarben extension project and its impact on CapEx? A: David Bennett stated that additional fleet is being allocated to other sites, while Moolarben will operate on the same fleet size. Expansionary capital is required for new mining areas, including infrastructure and monitoring activities.

Q: What has caused the recent decline in the share price? A: Brendan Fitzpatrick attributed the decline to sentiment related to weak coal market conditions, despite Yancoal delivering on production and cost guidance and maintaining a strong operating performance.

For the complete transcript of the earnings call, please refer to the full earnings call transcript.