...underpinned significant revenue growth as well. We had, you know, reasonably robust market through 2025, and that was largely, we knew that that was coming. It was the market was getting tighter and tighter through 2023 and 2024, and we absolutely were getting the expansion funded and implemented in time for what we could see was going to be a firm price environment. We were able to take advantage of that, and margins, you know, over AUD 30 a ton in that first, you know, first half of the year. Look, that was very pleasing to be able to get that year-on-year growth. That's underpinned a record underlying EBITDA of AUD 73 million.
That's almost 100% improvement from the prior year. The net profit obviously is underpinned by a couple of other items. Before I hand over to Nathan, so this is obviously his baby from a financial results point of view, and I would emphasize a really strong endorsement from the auditors with a clean audit report. You know, one of the strategic things we've talked about as a company was getting to net cash. We got really, really close. We got to AUD 57.5 million of cash against the debt position of AUD 58.9 million, so just over AUD 1 million away from that after having paid down over AUD 23 million of debt.
That's really important from a balance sheet perspective and an investor point of view, that looking to us to secure the company. Giving us, you know, we'll talk about in a minute, giving us the opportunity for capital management. That was a really, really critical part of the year. I'll hand over to Nathan to run through some of the other elements in the financials.
Great. Thanks, Simon, and thanks, everyone, for tuning in. Like Simon mentioned, a couple of really pleasing results from a financial perspective there. A very healthy EBITDA number, which is speaking to the quality of earnings coming through at that 6.2 million tonnes amount. It gives you a sense, I think, of the economies of scale here as well. Particularly around, and Simon will speak to, you know, guidance for 2026, and you know exactly what we're targeting, and it gives you a sense of the economies of scale and the cash generation potential of this asset now with the built capacity and confidence around that and our new management operating system that will no doubt deliver those tonnes.
Very pleased to be able to generate that level of EBITDA and free cash flow this year. Like Simon said, got very close to the net cash position, if not for a final shipment. You know, got very close. Leaves us with a little bit of unfinished business, which is not the worst thing as a motivation for a team that's about to get ripping again. Pleased with that. Then looking forward into some of our other things around like foreign currency. We had a good result with foreign currency this year, much better result than what we had last year.
Managed to pick our spots fairly well, but most importantly, be able to lock ourselves away up to at least around 75% of our net USD exposure going into 2026, at a very, very healthy, around that AUD 0.64-0.65. Very pleased to have that locked away. As you can imagine, particularly as we have this forward outlook and some of the capital management, how important it is to lock some of these things away and, you know, control the controllables. That gives us confidence to be able to be assertive and go out and take the value that's out there.
In terms of carry forward losses, also in a good position there, similar to, and you would have seen this at the half year, not only with the strong results that we had in the half year, but more importantly, the strong outlook that we've got for the business going forward, makes us confident and gives us the ability to bring back that previous impairment, bring back that reversal and bring those DTAs or those carry forward losses back onto the book. What we have in terms of available carry forward losses is about AUD 184 million in gross terms.
For the people out there modeling, you would expect to see us start to utilize those all through 2026, and I wouldn't expect us to be in a tax-paying position until probably the second half of 2027. A pretty healthy tax shield there for us. Simon will touch on, I'm sure, a little bit more on the buyback. But naturally, particularly with where we see ourselves at the moment, the business outlook that you see also being supported by those impairment reversals and recognition of the carry forward losses, makes it pretty clear to us there is a significant undervaluation there, which we're more than happy to invest in Metro at that price.
I'm very pleased to be able to do that, and very pleased to be able to generate some shareholder value through what is otherwise, essentially, adding flexibility to the balance sheet, through some prudent loan restructuring, to make sure that we're balancing out cash flow from a debt servicing perspective, and having the opportunity with that flexibility to generate some shareholder value. Thanks, Simon.
Yeah, great. Thanks. Thanks, Nathan, and thanks to you and the team for the hard work over the last few months to pull that all together. Very, very good set of results and well presented. Yeah, look, I think Nathan touched on it. The board, and we've been pretty clear about this from the start. I mean, this is about bringing... The strategy here is about bringing the Bauxite Hills mine asset into fruition. The strategy that we outlined... you know, early on in the second half of 2022, once we'd stabilized the business and really, put an operational and marketing strategy down, was to expand the business, gain those economies of scale, and get ourselves to the bottom of the cost curve.
What we said then in the second half of 2022, then when we went to FID and financing in the first quarter of 2023, was that by 2026 we were gonna be producing at 7 million tonnes, and that we were gonna have a cost appropriate to be pretty much down at the bottom end of that cost curve. What that does in commodity terms is provide us with the flexibility to withstand pretty much any market. It's not, you know, in its own right, Nathan again touched on this, it's all about also de-risking the business in as every way we possibly can, that's been allied with just an expansion. It's not been just more of the same, it's been about creating additional resilience.
That's required some change in technology in our business, so in terms of things like increasing the capability of our hauling fleet, in terms of speed, you know, in terms of payload, in terms of the road, the roads that they run on. It's been about the wobbler moving away from vibrating screens to roller screens. Bringing Ucumbe, our offshore floating terminal, which is capable of operating in much more difficult sea conditions. These are the sorts of things allied with just an expansion here that have been underpinning this growth. Of course, some of those things don't come quickly or easily, but they're effectively all in place.
That target now of getting to that sort of 7+ million for 2026 is what this is all about, and the economies of scale will continue to flow towards that cost. It's also about, you know, Nathan's touched on de-risking the business through the foreign exchange part, and that's obviously well in the money. At the moment, something else that's well in the money is all of our freight, our freight contracts. The ability to reduce risk for the investor by taking prudent positions in the market to be able to then go about the strategy of, you know, implementing these things.
Our freight now is probably AUD 2-3 in the money for 2026 versus the prevailing Capesize freight rates, which have been going up pretty much for all of the second half of last year. Of course, in a cost curve, where a cost curve drives industry structure, like it does in most commodities, you know, all that's doing is pushing the cost of delivery of West African bauxite, which is at the margin of our business, it's pushing that up, and up, and up. You know, we're much closer.
Even if we were exposed to the spot market for freight, we would still be in a much better position. We're even in better position because of the contracted freight, the, you know, two- to four-year contracts that we've taken out at the beginning of last year to underpin our delivered business. You know, there's a whole bunch of, I guess, aspects to this that de-risk the business. When we look at that profile with the board, and what we delivered in 2025, more importantly, what's the outlook for 2026?
Even, you know, the market will be what the market will be, but the ability for us to effectively, you know, guarantee that we're going to make margins here moving forward, irrespective of what's happening in the market, is an extremely important thing for the board to consider. You know, they've been very clear that they're not gonna sit on cash. We got to that net cash position. We were able to do some of this other de-risking of our cost structure. We've put a new team together to be able to drive the improvements that we are making. All of that plays into a confidence in the future that has underpinned the buyback, the buyback here. You know, it. We're of course working on growth.
Growth is of course part of our business, but we're not in the mode of, and certainly not in the game of piling up a war chest that. You know, we, if we have a growth opportunity, we will bring it to market. It'll have to stand on its own two feet, and that will be the signal for us to move forward. Whilst Bauxite Hills is producing cash, that will be part of our capital management strategy, and this is just the first step. Nathan, did you just want to touch on any other aspects of the buyback at this point?
Not necessarily, just otherwise setting the context. In terms of how we'll execute, that will be a non-market buyback, the terms of which have been disclosed in the latest release. What we're targeting is a 5% retirement of shares on issue over a 12-month program.
There'll be more, more details to follow on that in the very, very near future, in terms of execution, of the buyback. Look, I think at that point, Peter, we might just pause and see if there's any other questions out there.
Absolutely, Simon, thank you, as well, Nathan. A couple of questions have come through so far. With the re-rate now occurring, which we see on the screen today, and assuming the company's on-target tons achieved in financial year 2026, strategic acquisition would be good or a dividend. Do you see either occurring?
Well, look, I, you know, I guess what I would hope is I see both occurring. I've just said, I've just talked about the cash generated from Bauxite Hills. You know, in the absence of that, of a very live and current growth option, we will continue to pay that back to shareholders within the risk appetite of the board. So that's certainly the case, and like I said, we're absolutely working on some growth options. Look, it wouldn't be prudent to be more specific about that at the moment, but we're certainly well down the track on a couple of growth options. Like I said, we'll bring those, we'll bring those to market.
We'll be very clear about what they can do for the business and why we're going after them and, you know, indeed, then, you know, I suppose get the feedback from the market. Look, that's certainly the strategy.
Thanks, Simon. Second question, one for Nathan. Where does the financial assurance paid to the government sit on the balance sheet?
Yeah, sure. On the balance sheet, the financial assurance amount that is sitting within the financial provisioning scheme, will be sitting within the other financial assets that you'll find in the non-current assets on our balance sheet. That's, you know, and I think in our previous webinar, we mentioned that that is, you know, a priority over the next couple of months for us to explore, how we get that sort of back into our own bank account, you know, where we can put that to use, rather than sitting there. Plenty of options for us to look into.
Thanks, Nathan. Actually, probably more of an operational and financial one combined. How confident are you that calendar year 2026 guidance can be achieved? Have you seen issues from calendar 2025 now resolved?
It's a great question. Look, we've gone back and looked in detail at 2024 and 2025, so everything since we've been bringing the new, the new flow sheet into action. We've had a look at the things that have pulled us back from delivering higher tonnages. The critical thing here to say is that in terms of the feasibility study, everything, every part of our flow sheet, at the scale that we had set, has now delivered on its capacity individually. Whether I look at, you know, the clearing and stripping fleet, we had a few issues with that, but we saw at the end of the year that it was capable of delivering. We just had to plan and execute it better.
All of our mining and haulage, that has demonstrated the capacity that we need. The screening, ROM and screening area, that has demonstrated the capacity that we need. The tug and barge, the barge loader and the tug and barge system, which is basically an integrated system, have demonstrated the capacity that we need, and the transhippers have certainly demonstrated individually and together, the capacity that we need. The thing now is plugging all of that together, right?
That's where I think outside of a couple of, I might call externality events, if I look back at 2025, for example, the Easter weather event, which caused our channel to collapse on the edges, was a, you know, pulled us back certainly by 150,000-200,000 tons, and we unfortunately were not able to load the last vessel at the end of December, which was another, you know, 170,000 tons. Look, absent those two factors, the, which were largely externally driven, we would have achieved 6.5, 6.6 last year.
From 6.5- 6.6 to sort of seven or seven plus, it's really about a not achieving more through each event, any one of our parts of our flow sheet, but actually reducing the variability, plugging them together, and allowing them and making them work in a less variable way. Effectively reducing, you know, the bottom quartile performances through that flow sheet. We have pulled that apart, put it back together again. We've got a different, I guess, a different structure now in terms of internally about how we're gonna go about that. A very strong, I guess, technical and planning group under Nathan.
A new short run operations strategy under Paul Green at the site, who will be effectively looking only forward, you know, two or three ships in terms of where they operate. Really sort of segmenting that short run execution, really focusing on that short run execution and the reduction of variability with the medium term technical and planning side, so providing that service to the site. We're very hopeful, confident that that is a better way of looking at this. We've spent a lot of time over the last six months collecting data from every part of our business. We've been feeding that and analyzing that and feeding it into a new logistics and operations flow sheet and analysis. That is driving us, you know, you know.
Those are coming out with 7+ million- ton outputs, and so we are certainly driving that. Through the implementation of what we're calling a new management operating system, that will be really the processes, the routines, the KPIs, the, what, that drive that, the ability to sort of look at variance and how that works through. You know, that is how we're about to start our operating season. We're expecting to be roughly back around middle of March. As soon as we have some firm laycans for the first vessels, we'll announce the target for operational restart. We've already got work going on, for example, in the channel.
You know, we can't control the weather, but we can certainly control the impact that the weather has. What we've done, as already mentioned in our processes with the roller screen, the wobbler, and the Ucumbe, we've already reduced the impact the weather has on some parts of our flow sheet. That channel issue already, we routinely maintain that channel twice a year. We had already done that in March of last year before that weather event. In the October maintenance of the channel, we have already widened the channel from 60- 70 meters.
If we got an identical event to what happened last year, then the sides slumping into the channel would have minimal effect because we've effectively widened the channel. This year we're also going to investigate whether we do have approval to go deeper in that channel with that maintenance work. We're gonna be looking at trying to create some additional depth or, you know, which effectively translates into barge capacity, tons on barge, and in terms of hours per day, where we're not affected by tide. That's certainly one of the underpinning initiatives this year, where we're again trying to, you know, go back and look at what affected us last year.
That's been through, for example, the application of a different type of tug, with a different type of plow, with a different approach, and we've had really good results on that in the second channel maintenance activity from last year. Look, apologies for the very long answer, but I hope that gives an insight to the work that's gone in and the, you know, the sort of focus that we've got on lifting those bottom quartile shifts, bottom quartile days, bottom quartile weeks, you know, up into that, to that level to increase the averages that run through the flow sheet.
Thank you, Simon. Assuming the wet season holding costs are typically AUD 20 million for the quarter, with the Acamba dry docking, is that number still about right? Can you please let us know when the Acamba is expected to return to service?
Nathan, do you want to... Shall I take that one?
Absolutely. Absolutely. In terms of the Acamba dry docking, the cost of that dry docking or the cash outlay would be in addition to the typical AUD 20 million cash burn that we see over that period. From a timing perspective, naturally, these costs in a shipyard are very milestone driven. We actually wouldn't expect to see probably 75% of the actual cash burn for that dry docking to actually come through the statements until around sort of April and May with final payment. It's fairly spread out. From an overall earnings perspective, our dry docking, because most of these work program is statutory in nature, we actually provide for those costs in advance as well.
The full cost of this dry docking is otherwise included in the current set of results that you're seeing. The impact of that dry docking won't impact our margins.
Thank you, Nathan. While you're there, isn't there a strong argument that share buybacks represent better value to shareholders than dividends do, until Metro's paying tax, i.e., fully franked dividends?
Yeah, I think so. That's certainly our view. You know, with all else being equal, I think that's certainly the more tax-efficient strategy. Even then outside of that, when we're looking at, you know, what is ultimately, you know, a strong, what we consider significant undervaluation of the current share price, it makes the buyback all the more obvious strategy, I think.
Thank you. Simon, you touched on potential growth options, but how do you view your progression of Metro's EPMs to further support Bauxite Hills?
Yeah, you know, optimizing Bauxite Hills continues to be our primary focus, absolutely, you know, the primary focus of the team. We have about 40-odd million tonnes of resource that is sitting around our current pits. That is, you know, effectively the easiest resource to get to. We're currently doing more work on that in terms of analyzing the quality of that bauxite. Last year, if you go back and look at our AGM presentation, I talked a little bit about one of the initiatives is that we're looking at screening. We're looking at effectively upgrading, bauxite upgrading. I mean, upgrading of Weipa-style bauxite is not a new thing.
It's, you know, with Rio Tinto at Weipa, as I, you know, experienced in my career with Rio, it's been going on effectively for, you know, more than 60 years there. It's a pretty well-known pathway. As we do at Metro, we are not looking at things just as a, you know, a copy and paste. We're looking very carefully and creatively at the best value way in which to do that. Rio Tinto effectively wash all of their product, which obviously drives a huge amount of additional mining. It drives additional capital, additional cost, and, you know, they have to manage a massive sort of tailings or fines management program. They lose about, you know, 30-35% of the ore.
We're very conscious that kind of, you know, big bang solution is not probably suitable for Metro. We're looking very carefully at individual areas of our resource base. We're also looking at a, what we call a dry screening opportunity, where we don't need the use of water, we don't need much lower cost opportunity. Obviously requires the ore to be probably only applicable for about 6 months of our operating season, but we've had some really good initial results from our dry screening trials as well, and we're also looking at selective wet screening. The first stage of that is the resources that sit around our current pits and reserve.
The next stage are resources that sit somewhat, you know, distant to that. The nearest ones are north of the river. We've got some exploration tenements which we've started to explore at the end of last year. There's a bit more work to do there. The actual drilling programs are quite straightforward, relatively low cost. We don't have to go down very far to hit bauxite, obviously. It's then the analysis of that, particularly if we're looking at the application of screening or so into those leases, obviously, that takes a bit longer again. We've also got existing resources that are not recognized in the resource statement sitting at the old Cape Alumina Pisolite Hills project. That was...
That is effectively south and east of where we are. One of the antecedent companies of Metro is Cape Alumina. They had a project called Pisolite Hills that was affected by the recognition of a national park. You know, those resources are still, though, a proportion of those resources are still on our books, and they sit in the same sort of orbit as the Bauxite Hills Mine and just require a kind of access and barging strategy to be able to get to them. We have some resources very close to the Aurukun, the town of Aurukun, down in the southern part of the Weipa Bauxite Plateau.
We've been discussing access to those tenements with the with Napranum, the local body corporate that represents the other traditional owners there. We've been progressing access rights to that, we do expect, subject to agreement to those conduct and compensation agreements, to be able to access those tenements there. One of those tenements was added last year in a deal that we did with Profit Resources too, which is an adjacent tenement to the one that Metro owns. We've now sort of doubled the potential size of that exploration opportunity. We're still continuing down exploration.
Our firm intention is to add resources and reserves to our current resource base, and some of that may be, though, subject to the trials that we're doing this year on the upgrading, so dry and wet screening.
Finally, Simon, an update on the bauxite market. How do you see things currently? Perhaps, an outlook, and do you see a return to stability from what was a volatile price market last year?
Yeah, yeah, good question. I mean, I might start, I might start at the top level, which is sort of with aluminium. The, you know, those following the aluminium value chain will have seen the aluminium price after, you know, a dip early in the year, coinciding with the initial, I guess, Trump Liberation Day tariffs. We've seen a very strong recovery of aluminium, and that's been driven by a few things, right? There was 74 million tons of aluminium produced in the world last year, but it basically wasn't enough to satisfy the demand, and so we're in deficit, as China...
You know, China grew by about 2% in its production last year. Again, that wasn't sufficient to put into the market, and they've been importing more aluminium. The aluminium market at the moment, because of these tariffs, and also because of the sanctions against some Russian entities, is somewhat, you know, structurally. How can I put it? I guess there are structural restrictions in that aluminium market, which are driving outcomes and pricing that is, you know, really destined for even further growth. You've got pockets of demand that can't be met by local supply. They're then affected by tariffs, so that's the U.S., for example.
The price of aluminium in the U.S. is actually almost double that LME price. If you look at the LME price of over $3,000, it's between $5,000-$6,000 per tonne because of not only the tariffs, but just the huge deficit that exists in the U.S. market, and they don't have any fast way of getting access to that product. There's some you know, fractures and issues in the market. Above all, the demand for aluminium is growing, and so even with this sort of like, temporary you know, the tariffs clearly caused a dip in demand.
Even without a recovery in the China building and construction market, you're still seeing significant 3%-4% growth in demand for aluminium, and that is just not being able to be supplied out of the industry at the moment. China is now very close to its production cap, where is that aluminium gonna come from? Predictions are continuing for deficits this year, that obviously must mean price rises. The other thing that's driving that growth, other than the standard electrification, you know, vehicles, transportation, aerospace, et cetera, is the fact that copper, you know, copper price is going hard as well, and aluminium is a substitute for copper in many applications.
You know, there's a whole bunch of reasons why, and that's. Overall, a great environment in the aluminium space, which means that growth in alumina production is required, and that means growth in bauxite demand. When you then break that down, okay, we're in the Asia-Pacific. I mean, a lot of that growth is happening in the Asia-Pacific. At the moment, though, there is, as you've mentioned, Peter, there's been a bit of a volatile ride. There were some very high prices at the end of 2024 that, for bauxite into 2023, into 2025, and then, you know, that's come down a bit. Things stabilized a bit, and there's been a bit of a dip, a couple of dollars down again, since the end of the year.
You know, the alumina market, so we supply into that alumina market, is a bit oversupplied with. And there is a shakeout occurring, particularly in China, with older plants closing, new plants coming online, but all those new plants are dedicated to imports. What's good about that shakeout is we're seeing alumina plants inland in China looking to curtail and close, and that they've been largely based upon domestic Chinese bauxite, and the new plants coming on the coast are a hundred percent dedicated to imports. What we're going to see then, once this shakeout has sort of worked its way through, we're going to see increased demand for traded bauxite in the Asia-Pacific. India is coming along on the rails as well.
The Middle East is also planning additional refining capacity. Look, we do see that, and you know, Indonesia has is growing its whole chain, the smelting chain, the alumina chain, and the bauxite sort of side of things. I see that largely being contained within the sphere of Indonesia. Indonesia, I don't think we're gonna see a lot of leakage of either alumina or bauxite out of that out of that market.
Look, I think there's a bit of volatility around, but I would just go back to my comment earlier about industry structure, which is, you know, as long as the West Africans are supplying into the Asia-Pacific, and as long as they continue to be two-thirds of or two months of freight travel away, which I don't think the geography of West Africa is gonna change anytime soon, then Metro is in a structurally advantaged position, irrespective of whether we have a tight or less tight market to be able to supply into the Asia-Pacific at low cost. All of the things we've been driving for are gonna continue to be relevant in terms of this market structure.
Thanks, Simon. That was a pretty comprehensive coverage of that question. I've just got one little one here. We mentioned perhaps in previous webinars, discussion of the kaolin resource or the kaolin mineralization at Bauxite Hills. Is there any further exploration or interest in that particular mineral there?
Yeah, yes, there is. We've now extracted and tested the product in a few different places, in a few different markets. The kaolin product that we have on a raw basis is of good enough quality to export. Kaolin, though, is, it's a bit, it's a bit more of a fragmented end-use market. There's kaolin goes into paints, goes into paper, goes into ceramics, goes into rubber, goes into fiberglass, goes into a whole different, you know, a huge number of different applications. Each application has a slightly different quality, I guess, specification, has a physical, the physical state of the kaolin and the fineness of it, et cetera, are very, very different.
It's not a big bulk market that, you know, that one can understand in a fairly easy brushstroke, but we are continuing to explore that market. I'm not particularly interested in doing a lot of work on kaolin, you know, in terms of upgrading on-site. You know, Skardon River is a great place to run bulk commodities. Whilst we have the bauxite value chain, it does allow us to piggyback the kaolin on the back of that large-scale value chain and flow sheet. Does mean we can then get raw kaolin to places very cheaply, and I guess that's the model that I'm trying to progress.
That does then require, obviously, partners at the other end who are going to take that product and either distribute that or to work on it, whether it's sort of upgrading it through washing it or by grinding it, or by doing something for the particular segments that the kaolin market needs to drive. You know, I guess for us to move the needle there, we'd be wanting to move 300,000-500,000 tonnes of kaolin to be able to kind of move the needle. I mean, that's quite a lot of kaolin for the kaolin market.
Yeah.
It's a much, much smaller market. The answer is yes, we've done more work. Yes, we've done more drilling. Yes, we've done some studies on mining. We've done some test work on our flow sheet to be able to prove that it can be dug up, it can be moved, it can be screened, it can be placed on barges and through our transhippers. That work's been done. It's really now more a market, the market side of things, and can we see a value proposition for exporting effectively what is a raw bauxite that needs further work done on it?
Thank you, Simon. Thank you, Nathan. That concludes our questions here today, and a good summary of what looks like a pretty positive report, and the market seems to like it too. If there are any other further questions, please email them in to peter@nwrcommunications.com.au. I'll make sure Simon and Nathan get them. This is being recorded, so we'll make this available for distribution later on. Thank you, gentlemen. Thank you, everybody, for joining us.
Thanks, everyone.