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 TRIR 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 tons, up 5% compared to the previous quarter, following a strong mining performance at both operations. Saleable coal production was 2.8 million tons, 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 seven-day plant shutdown of the prep plant in December. Group coal sales was 2.9 million tons 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 AUD 107 million, which was in line with the previous quarter. Our average realized price was AUD 139 per ton, a slight increase from the previous quarter, following improvement in both gC NEWC and the API Five 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 tons, 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 tons of saleable coal and sold 5.6 million tons 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 AUD 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 from $173 per ton to $138 per ton, following a decrease in benchmark coal prices.
As at 31 January 2026, the group's available cash balance was AUD 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 tons 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.
Thank you. If you wish to ask a question via the phones, you will need to press the star key followed by the number one on your telephone keypad. If you wish to ask a question via the webcast, please type your question into the Ask a Question box. Your first question comes from James Williamson with Bell Potter. Please go ahead.
Morning, guys. Thanks for the call. 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?
Yeah, 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 2027, 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, and make sure we're responding to the current soft coal conditions. So, you know, optimizing in terms of looking at pricing and looking at criticality and really making sure we're making the best decision for the business.
Yep. Understood. And then maybe just on New Acland, are you able to run through the weather impact there, and if you've seen that feed into this quarter and whether or not that lower waste movement carries through to mining going forward? Will that impact anything going forward?
Are you referring to Bengalla? I think that's probably
Oh, sorry. Yeah.
Yeah. Yeah, sure. So I guess for 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're going to 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 ton ROM run rate. So, you know, that pit's 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. Second half is really about getting back to that long-term run rate of the 13.4 million tons.
Yeah, 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. You know, 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, you know, the logistics providers for both 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 crank up that mine and sort of head, you know, well towards achieving that five million tons per annum to get to steady state.
Great. And then, are there any sort of rail outages scheduled for the remainder of FY 2026 that we should be aware of there, or is it. And how are you managing those?
There are scheduled outages, but you know, we've got that in our plan. You know, that previously our issues were around unscheduled outages, so we're confident, as I just said, with you know, both QR and Aurizon really rising to our request to provide the rail to get product offsite. 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.
Great. Thanks for that. I'll pass it on.
Thank you. Your next question comes from Daniel Roden with Jefferies. Please go ahead.
Good day, guys. Thanks for taking the call. Just wanted to touch really quickly on, I guess, a couple of capital management things with the Bowen Coking Coal debtor. Can you quantify the financial guarantee and liability currently on the balance sheet? And, and, and I guess when do you expect the P&L and cash flow impacts from that? Is that expected in half one results?
Yeah. So yeah, good outcome there. Obviously, you know, that it was quite concerning when it went into administration, but, as you would have seen, made public and per our quarterly, we've had a good outcome there, so we get fully off risk for the bond, which is AUD 45 million at the moment, and we do get a payment to New Hope of circa AUD 12 million for settlement of outstanding and also future royalty obligations underneath that, you know, initial transaction agreement with Bowen. So obviously there's a few hoops to go through with creditors and further approval, but, you know, we're confident that that will go through and I think probably in the next two months.
Where the cash will come?
Yeah, the cash will come. So, so good to be able to get a clean exit from that asset and what is a, you know, a pretty positive outcome for the group.
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've had written off or provided for certain bad debts, essentially. So that amount, those amounts that went through the PNL will all be reversed in the 31 January result, which will come out in March.
Yep. Yep, that makes sense. And is that, I guess, does that cleanse 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'll be, that'll be it. So clean exit from that asset.
Yep. Cool. Awesome, and 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 a, I guess, a refinancing and cash settlement perspective. Like, you know, what are you looking for in terms of market conditions, just price and, you know, I guess utilizing the cash balance on that you've got at the moment and debt, how are you thinking about that?
Yeah, 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 at what's available, being a thermal coal producer, but, you know, 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 that 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.
Yep. Yeah, makes a lot of sense. Okay. And, and maybe just the last one for now, Rob, to you. But just wanted to touch operationally, you noted that you've, I guess, you know, forward sold, three months of, I guess, coal. You know, I guess, what's the structure of that? Is that fixed index, an index? Are they, you know, obviously tied to the NEWC A PI five linkages? I assume they'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?
Yeah, so that's right. About three months sold forward, you know, contracts are, you know, are linked to both high ash and low ash indices. You know, FX wise, you know, that's obviously increased a bit. We do have some fairly, you know, fairly favorable hedging in place for the group. So although, you know, it's ticked up over the $70 mark, you know, we're hedged below that. So, you know, our plan expectations take that into account.
Yep, and I assume you have a fair bit of, obviously good visibility on the quality of those sales over the next three months, because you have seen a, I guess, you know, higher yields, higher quality, you know, particularly out of Acland. I guess, are you expecting that to continue over, you know, I guess, calendar 2026, or like, you know, do you see a reversal in there? Like, when do you expect that to happen come, you know, coming back to normalization?
Yeah. So for New 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, you know, probably positioned more towards low ash. You know, we expect over the, you know, as we ramp up that to sort of settle back to sort of that 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 two pits at the moment. We're looking to get into the Manning Vale West pit , back end of this calendar year, and that'll give us our sort of ability to get the right blend of product as we mine them.
Thank you. Thanks, that's really appreciated. Awesome.
Thank you.
Thank you. Once again, if you wish to ask a question, please press star one on your telephone keypad or type your question into the ask a question box. Your next question comes from Glyn Lawcock with Barrenjoey. Please go ahead.
Morning, Rob. Just a couple of quick ones, if I could. 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? And you sort of talked a little bit about what you're gonna spend on sustaining at Bengalla, but I just wondered what CapEx was like.
Yeah, 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 let us, I guess, increase that cash balance a little bit more than what we originally thought.
Okay, so we'll have to wait for the half for the final CapEx number, I guess.
Oh, the overall CapEx? Yeah. The sustaining for Bengalla is in there, but yeah, the Acland one, obviously, that's it. That'll be in the half.
Yep. Okay. And then maybe, Rob, just thinking, staying on Bengalla, you know, 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 six and sort of 18 months from a cost perspective?
I think Bengalla is really driven by, you know, obviously, unit cost is driven by volume. You know, as we've touched on, we have seen a, I guess, a challenging start to the year, having to, I guess, reset the pit. So, you know, we have seen an increase in cost compared to prior year, and that's really a big, you know, part of it is the strip ratio increase. But, you know, 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 unit cost decrease. So obviously there's some uncontrollables in there with regards to, you know, just general cost of mining is increasing. We control what we can. You know, labor costs are increasing, all those things, but ultimately, if we can keep pushing the volume out, that's where our, our benefit is, from, from a cost control perspective.
So are prior years 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. You know, obviously, the anything controllable on site, we will do, you know, justice. Things out of our play, you know, fuel costs, and the like, you know, if you see an increase in the price per barrel, that will flow through the business in, you know, diesel price, explosives, you know, there, but ultimately, it's usually correlated with an increase in coal price. So, I think what you'll see is if our cost base increased, you'll see that across the whole industry. But really for us, focus on what we can control. That's moving, you know, dirt safely, and productively, and that ultimately keeps our unit cost down.
Yep. And then just on the gC NEWC 6,000, 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, it's probably a few things. You would have seen, you know, in the market that Indonesia has, has, you know, put constraints on production that's pushed up, you know, particularly the high ash market into, into China, that ultimately, you know, as that creeps up, that, that, you know, provides a bit of underpinning for, for the NEWC. You would have seen also, you know, potentially a, you know, a modest volume of semi-soft coming out of the Newcastle, index or, or the market. So that obviously, benefits, the, the price as well. So, I think, you know, yes, we've, we've seen it increase.
You know, will it, will it stay there? Will it come down, or will it go up? We kinda feel as though where it is at the moment, sort of in, you know, 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, you know, 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, yeah, that's right. We've been approached on that. Anglo are keen to sell the whole portfolio as one. We're not interested in the whole portfolio.
Okay, great. Thanks, Rob.
Thank you. Your next question comes from Rob Stein with Macquarie. Please go ahead.
Hi, hi, Rob. Just a quick one. Capital allocation. How should we think about, how should we think about the upcoming decision that's in front of you and the board, around what to expect around allocation in the cash balance, noting, you know, the buyback was unutilized in the period?
Yeah. 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. You know, we've touched on, Bec touched on the capital profile in the business, sustaining and growth capital execution. So really, you know, 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 frank dividends.
So just around Malabar, can you give us a bit of an update, just a bit more color on how the project's tracking and what it's capable of over the next 12 to 24 months, and how you hope shareholders are going to extract a return from that investment?
Yeah. So Malabar's 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, there's two operating pits there. There's a board and pillar pit, which is starting to really bed itself down, get some good productivities there to put it in, you know, a profitable position, even at these, you know, quite modest prices. But really the focus is getting development completed, longwall installed and ramping up the longwall for the first panel. So, from an infrastructure perspective, you know, things are going really well on the surface. Overland conveyor is commissioned, longwalls, you know, all teething issues have been removed.
Crews have had good training, and that'll 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, the face road, and installation should go to plan, given it's, you know, 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, you know, getting in that first longwall, continuing to get development aligned with that, ensure we've got enough development flow as we get into the second and third and fourth longwall panel.
And in terms of how sort of cash flows from that vehicle back to, back to New Hope, when are you? What can investors expect around a return on investment, noting, you know, the asset does have debt against it, but. How should we think about that?
Yeah, 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, there is a couple of debt pieces in there to allow it to get to this point. So, you know, we'll be looking, you know, in the coming years to look for dividends.
Obviously, that's gonna be driven by not only productivities but also so pricing. So, but fundamentally, the assets solid, you know, 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, you know, all shareholders, including New Hope.
Again, that's a really good color. Thank you.
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.