Yancoal's 2Q 2024 Performance and Outlook

Yancoal (ASX: $YAL) reported an A$181/t average realised coal price and a $318 million increase in cash balance for the quarter ending 30 June 2024. The company achieved 13.9Mt ROM coal production and 10.3Mt saleable coal production. Despite a slight decrease in saleable volumes due to wet weather delays, the company reaffirmed a strong recovery with an 18% increase in attributable saleable production compared to 1H 2023. Yancoal aims to reverse the recent upwards trend in its Total Recordable Injury Frequency Rate and anticipates an increase in production volumes in the second half of the year.

Executive Commentary

Yancoal continues to generate robust cash inflows with the A$181/t price realised for the half being roughly double the cash operating cost targeted for the year. Although the production rate in the first half is at the low end of the full year guidance range, we expect production volumes to increase in the second half. With a strong financial position and a cash balance of $1.55 billion at the end of June, the company is well-positioned to pursue suitable growth opportunities as they arise. The thermal coal markets remained relatively balanced, and we believe our large-scale, low-cost coal production profile is well-suited to the current market conditions.

Summary and Outlook

Yancoal's 2Q 2024 performance reflects an A$181/t average realised coal price and a $318 million increase in cash balance, demonstrating robust financial results. The company aims to reverse the recent upward trend in its Total Recordable Injury Frequency Rate and anticipates an increase in production volumes in the second half of the year. With a strong financial position and no interest-bearing loans, Yancoal is well-equipped to pursue growth opportunities. The company's 2024 production guidance remains unchanged, with a focus on achieving 35-39Mt attributable saleable production and managing cash operating costs within the range of $89-97/t. Yancoal's outlook is optimistic, leveraging its strong financial position and production capabilities to navigate the current coal market conditions and pursue suitable growth opportunities.