National HealthCare Corporation Price & Performance (NHC)

In addition, our business generated $370,000,000 of cash flow operating activities. Which funded investments in our organic growth pipeline and has enabled us to deliver returns to shareholders. On that matter, I'm pleased to announce the Board has declared a fully franked interim dividend of $0.19 per ordinary share. In addition, we have also announced the start of an on market buyback of ordinary shares up to 100,000,000 providing further shareholder returns. Turning to safety. The safety of our people is paramount. And we are focused on ensuring our people go home at the end of each day unharmed. As I mentioned earlier, have seen an improvement in our TRIFR our all injury frequency rate since we reported to the market six months ago. Although we still have a long way to go, it is pleasing to see the safety program we put in place in recent months started to have a positive impact at our sites. Our group operational performance can be summarized in two key points: high coal production and lower unit costs. At our 80% owned and operated Bengala mine in New South Wales, we reported an uplift in saleable coal production to 4,200,000 tonnes. With a corresponding decrease in FOB cash costs to $68.3 per sales tonne.

With the completion of the Bengala growth project, the mine is now operated at the expected steady state. Due to the combination of some timing delays, and our disciplined approach, with consideration to the recent decrease in coal prices, we've revised down Bengalis sustaining capital and expenditure guidance. With a focus on capital optimization. Bengalas mine FY 'twenty five sustaining capital guidance has reduced from 200 to $245,000,000 sorry, from 2,000,000 to $245,000,000 to $185,000,000 to $225,000,000 The continued ramp up of our new Acklin mine delivered a significant uplift in coal production contributing 1,200,000 tonnes of saleable coal for the first half. Importantly, the conclusion of Oki Coal Action Alliance's legal challenge provides certainty for the community, a clear runway to increase production to around 5,000,000 tonnes per annum. By developing the Manning Vale West mining area. During the half, New Hope increased its equity interest in Malabar Resources Limited, from 19.9722.97%, This investment increased our exposure to high quality metallurgical coal. And aligns with our strategy of investing in low cost, coal assets, with long life approvals. Overall, strong operational performance at both Bengala Mine and New Acland Mine provide a 33% uplift in saleable coal production to 5,400,000 tonnes.

And a 21% decrease in group FOB cash costs to $77.7 per sales ton. Turning to our financial highlights. The business generated $317,000,000 in cash flow from operating activities. Which was a significant step up compared to the first half of twenty twenty four. This result reflects the continued execution of our organic growth plans but also demonstrates our resilience to coal price fluctuations we have detailed on Slides nine and ten. Our cash generation supported further investment in our organic growth plans. Allowing us to increase our equity interest in Malabar and, most importantly, return value to shareholders. During the half, we returned $186,000,000 in dividends to shareholders, representing a 10.3% gross dividend yield for the twelve months to the 01/31/2025. Here on Slide eight, we have outlined our approach to capital management. Which ensures we can deliver sustainable and significant returns to shareholders. Through a range of methods that we actively review. One of these methods is the on market buyback of ordinary shares of up to 100,000,000 that we announced to the ASX today. The buyback represents an opportunity to enhance the value of the remaining shares on issue given our view that the current share price undervalues the company.

We will apply the same discipline as our previous buyback. With the buyback working in conjunction with dividends. On that note, our Board has declared a fully franked interim dividend of $0.01 9 per ordinary share, which is aligned to the strong half year results. New Hope has a significant franking account balance, and using this account, is a key priority. Therefore, dividends will continue to be the predominant form of capital returns to shareholders. Looking ahead to the second half of the year, our focus is on the site production ramp up at New Auckland. And maintaining the increased production levels at Bengala. Our performance in the first half of the year has us on track very well in terms of our guidance ranges. Beyond this financial year, we remain focused on our organic growth profile. This includes: continued ramp up of New Ackland mine to 5,000,000 tonnes per annum operation, sustained production at Bengala mine and the development of Malabar's Maxwell underground mine. All of which are low unit cost, low risk assets. Our target of production increases require limited capital expenditure, This will support increased levels of free cash flow ultimately creating additional value to return to our shareholders.

Thank you very much. We'll now open up the lines to Q and A. Thanks, Rob. One of the first questions to come through does relate to New Acland. So with the OKRA appeal now resolved, how long will it take for New Ackland to become a 5,000,000 tonne operation?

So I think the conclusion of the Okra appeal now now we've we've we've got through that. We're working through ramping up that pit, so around about FY 'twenty seven. We expect to get to a 5,000,000 tonne per annum run rate.

With the growth project now complete at Bengalamine, what's next for the site?

So as we discussed, we've really bedded down that growth project. So we're consistently producing at that 13,400,000 tonnes and washing just shy of 13,000,000 ROM tonnes to get to around about 11,000,000 product. That will take us through at that run rate to around about 2,037. For that permitted area. As we've announced previously, we have EL 9,431, which is to the west of Bengala. And then further out to the West, a couple of years ago, we acquired EL 19. We're actively drilling both of those areas, and the intention is to provide optionality to extend the life of Bengalah should permitting and the community support that extension.

This one relates to the cyclone that impacted South East Queensland recently. Did the cyclone itself impact any of New Hope's operations?

Yes. So I guess from New Hope's perspective, the safety of our people is paramount. And we're happy to share all of our people remain safe. Some of them had to stay away from from the operation at QBH. Given that it's close to the coast. And was probably in the main firing line compared to the rest of our assets. We suffered no infrastructure damage at QBH, which was great, and all of our workforce are back on-site there. The real impact we had was due to the fact that we couldn't during that period, which makes sense. And then also the rail corridor suffered some flooding and delays, which we're getting towards end of now, and railing will start up that comes down from not only New Ackland, which is new hopes of mine, but also Canby Downs.

A couple more questions to go, but this one from online. Why a share buyback? Rather than a larger dividend?

Do want to answer that, Bec?

Yeah. Thanks.

I guess we actively review all opportunities to return capital to our shareholders. And as you would see, the current value the current share price really materially undervalues our company's assets. Know? So we see a really good opportunity to enhance the value of the remaining shares on issue, as Rob touched on, but this will be done in conjunction with dividends So we really want to utilise that franking credit but at the moment, we do see a lot of, I guess, value in turning back on the buyback. Now we'll be very disciplined with our approach to the buyback as we were last time. And continually monitor what is in the best interest of returning capital to our shareholders.

Thank you, Bec. A few more coming in online now. This one relates to Malibar. What is the end game for Malibar? If you wanna bid, why would you wait until it's derisked? What does the 20% give or take given New Hope Group? [indiscernible] as the market would have seen, we've we entered into Malabar at 15% stake. And then due to a a capital raise within that group, we stepped up to just under 20%. And then more in recent times, we were approached by another shareholder we took advantage of that. And that was capped out at the 3% for the CREEP. CREEP rules. We weren't interested in in forming a takeover, hence the reason why we stuck to the 3%. And as I've said before, the team on-site and the other shareholders in that asset are very supportive, and we want to continue to work with that for the end game is really to see our the development of that asset to its full potential. Is around about that 7,000,000 product tonnes, and it will become one of the lowest cost producers of met coal within Australia. So it's very exciting. Happy to be a part of that, and we're looking forward to seeing that come to fruition with our our shareholders.

Thank you, Rob. One more from online. It's a three part question. So I'm mainly interested in comments on the pricing dynamics in the export thermal coal market. Has recent weakness has the recent weakness been proven by more excess supply, or is there a demand issue? And what to expect for the coming season?

Yes, it's a good question. I'm sure we'll get asked that a lot over the next few days. It's probably a mix of both, as you've seen with our result. We've had a strong first half from a production perspective, and I think a lot of our peers are achieving the same thing. We're thermal oops, thermal coal comes is predominantly the Hunter Valley. And we've had advantageous conditions for good production. So you're seeing good supply into the market. And then on the flip side, demand has been a bit soft. We've had probably a pretty mild Northern Hemisphere winter, so demand, you know, both from domestic and general industry, has been a bit soft. And there's I guess, there's general unease economically around the world. So, you know, demand has been soft and couple that with, you know, good supply, that will push price down. Looking forward, I think we will see a bit of a balancing and potentially a bit of a move north in price. That will be, in our view, driven by the fact that at current prices, circa $100 which is sort of stuck around for a while now, There's quite a few producers which are losing money at that price, and and some suppliers actually coming out of the market predominantly from overseas jurisdictions.

So as you'd expect, if supply is coming out, that should see a bit of a tightening and potentially pushing up the price. Also see a bit of restocking coming into the Northern Hemisphere summer. I understand stocks have gone down, particularly in Asia. So as that happens again, we may see a bit of an uptick. But guess our view is it's probably not going to decline too much further. But if put that into context, New Hype's very resilient to these prices and even further softening of prices. We've got as you say, from our unit cost, we've improved that. And with the exchange rate complementing to the realised Australian dollar for coal at the moment, still very strong for a company like New Hope. So it's a bit of a crystal ball, but that's, I think, our assessment of the current situation.

Thanks, Rob. This is the last question. Why did you revise down Bengalis CapEx guidance?

Basically, really due to timing. So as you know, we've we're at sort of pointy end of the growth project. We have some fleet replacement and really just it's just a deferral due to timing. Rather than cutting CapEx, so to speak.

Actually, there's one more light question. What is New Hope's split of sales between spot and contracted please? Is this expected to change over time? And this is the last question, Rob.

Sure. Most of our coal is on contract. On term contracts, whether that be pegged to the the Nuke Index or API five. Very little of it's pegged to JRP. Now that we've turned some of those contracts to a nuke. Linked price. And we've also got some domestic sales, which is on an annual fixed base We do have some spot sales, but it's very minor So so that that's how it is at the moment, and we don't expect that to change materially. Okay. Thank you.

So thanks, everyone, for dialing in, and have a great day. Thank you.