Ladies and gentlemen, thank you for standing by, and welcome to Whitehaven HY 2022 Results Presentation. All participants are in a listen-only mode. There will be a presentation followed by a quick question and answer session. If you wish to ask a question, you will need to press the star key followed by the number one on your telephone keypad. I would now like to hand the conference over to Mr. Paul Flynn, MD and CEO. Please go ahead. Good morning, everybody, and thank you for taking the time to join us for Whitehaven Coal's Half Year Results Presentation for financial year 2022. Today with me, I've got Kevin Ball, our CFO, and Ian Humphris, our EGM Ops, and Sarah McNally, our Head of Investor Relations. As usual, I'm going to go through a short presentation, and we'll get to the Q&A. Given the fact that everybody's seen the operational outcomes for the first six months, in any event, we'll probably focus on the financial component and scoot on to the Q&A as we can. I'll just draw your attention to the forward-looking disclosure statement, given that we are talking about guidance today. So I'll draw that to your attention, and we'll move off to our slides. So in order to set the scene for you a little bit, let's just quickly recap on our customers and who we are. We're obviously a 100% exporter into the premium markets of Asia. You can see the split of customers here in the various jurisdictions that we service, and so Japan, Korea, Taiwan, and India are being the mainstay of our business and expanding into Vietnam, the Philippines, and Malaysia in more recent times, and Indonesia with boutique markets there. I mean, the obvious exception here is the fact that we don't sell anything into mainland China, which I think everybody understands. Our premium products and the split of sales during the period you've got here, which is there for you to see. Again, no major changes in too much of that. The majority of the thermal coal goes into Japan, Korea, Taiwan, as you know, and then steelmaking, smelting, and other purposes go into India, Korea, and Indonesia. Japan's in the other component here at the moment. The backdrop of pricing obviously is pretty good, and I'm sure we'll talk about that a little bit further as we get into things. You've obviously seen some variability in the market moving from cyclical, well, COVID-induced lows, cyclical lows, if you want to refer to them that way, due to certainly a much tighter market with significant demand right across our customer base and globally more generally. And then, of course, supply-side constraints leading to a very good and tight market overall. In terms of the current coal market, again, price is low back in when August of, jeez, we saw things go low in August of 2020 and then move further lower. And then we've seen a much better market coming through on the supply side being constrained as it is. You're not seeing any benefits to that. But there's a number of different reasons why we've seen the changes that we have. Of course, there's been stimulus being obviously injected into the markets of each of our customer economies, but global economies more generally as people trying to recover ground after their COVID-induced backward movements. So that's good, and that's being exhibited right across all of the energy complex. So you're seeing oil, gas, coal, all obviously responding to that, which is a positive thing. Obviously, supply side has been interrupted, not just by COVID alone, but COVID has been a supply issue constraint on pretty much all the producing jurisdictions you could imagine. And then, of course, there's been other features which have taken place across the globe as well, whether it be weather in our particular circumstance here or industrial relations type issues or infrastructure constraints, be that in South Africa or Colombia. There's been certainly constraints on either side leading to a very tight market overall. Just with an outlook for the seaborne thermal coal market, volumes and price looks pretty good generally. On the right-hand side, you've got Wood Mackenzie view as to where prices are going to settle, $80 more or less going out to 2035. That's up for debate, that one, in terms of where this lands. And certainly, that's a long way off where we see. And so forward curve in the more recent times are going to point to something settling at something north of that in my estimation. The left-hand side is quite interesting when you look at the bedrock, if you like, of coal demand. Obviously, this slide sees that China and the rest of the world drift off as you move out to the 2050 period. But largely, Asia ex-China is pretty stable at around 400 million tons, which is pretty good for a seaborne market. And just quickly, why do people like our coal? Well, of course, we've got the trifecta of benefits here. We've got obviously the lowest carbon intensity of any thermal coal sold in the seaborne trade so that you get more energy for the ton that we give you, which is great. And given the educated nature of this audience, I don't need to highlight that CO2 emissions are important, and it's clearly not a pollutant. Whereas our coal does definitely deal with the air quality concerns of our customers, and that is that the SOx and NOx outcomes from using our coal are much better than our competitors. Of course, the low ash profile of our coal means that there's not ash disposal issues at the back end of the use of our products. Definitely got the trifecta of benefits in that regard. Just over to our results, and I'll start with safety as we should. Safety performance has been reasonable, but not where we want it to be. The trip through at 6.1 is okay, but I know we can do better than that. There's a lot of renewed focus on making sure that we continue to push this number down. Concerted pressure across our business is necessary to make sure that we can achieve a better outcome than what we've got in this particular period. I know industry-wise we're doing really well, and severity-wise, obviously, the instances are improving all the time, but we know we can do better, so let's continue to focus on that. Just some highlights for the financial results. I'll just call out a few of these numbers here. Obviously, our achieved prices, you already knew this from the previous information we've given you over the quarters. I know everyone should have had our EBITDA range well and truly in hand given the numbers that we've given you QoQ. The record revenue for us at AUD 1.4 billion is very good. EBITDA, obviously, at AUD 632 million is a very good result, and that cascades down to a record NPAT at AUD 340 million. Cash generated during the period has been significant, AUD 567 million from Ops, which is a positive result. The Board has reflected on, obviously, the first half and declared an unfranked dividend of AUD 0.08 per share. Looking forward, has also deemed appropriate a buyback, which notifications went out this morning that we would seek to conduct over the next 12 months up to 10% of the issued stock of the company and capped at AUD 400 million over the next 12 months. So it really is a positive outlook from the Board and our perspective about not just the immediate short term, but certainly the outlook for the business more generally. Now, these numbers, obviously, you're no stranger to this audience, given that we've published these numbers over the past two quarters. I won't really go on to this too much at all, but these numbers will be very familiar. Guidance for sales at 17.2-17.8, a ROM guidance there at 19-20.5. Kevin will come on to a little bit about deleveraging, which did reflect the fact that we've spoken in the last quarter, in particular due to COVID and weather. We did have slippage of deliveries into this quarter, which has obviously converted into cash, significant cash during this quarter. So I know Kevin will cover that in a minute. The sites, I'll just go through this quickly again. Everybody's well familiar with where we're tracking with this. Maules Creek obviously was the one which was affected by weather, not just the flooded period where we had lost access to the site for two weeks, but for essential services being helicoptered into site. But we were suffering from consistent rainfall prior to the flooding event itself. So we did lose some tons in there, which we previously recorded at six to 700,000 tons for the year. Narrabri, obviously, wasn't affected the same way. It was obviously in the midst of a change-out which had been scheduled, and that has been conducted well and on time and budget. So moving out of 109 into 110 is a positive thing with our ramp-up continuing to proceed and cutting into 110 reasonably well already. Just over on this next slide on Narrabri, just to highlight for you, the cut and fill mining preparations did start in January, but the actual cut and fill won't really occur until, well, next month in March. So it is first quarter later, I think, but in this one, it refers to when preparations have started. Longwall relocation, as I mentioned, went well. The step around obviously comes at the back end of this financial year, and the relocation is scheduled for the second half of FY 2023. Going into our Ops, Tarrawonga, unfortunately, was like Maules Creek affected by that weather pattern, which was hovering over that part of our basin, and that did cause us some delays there. It wasn't as badly affected as Maules Creek was in terms of access to site constraints, although the challenge there is the roads were constrained, and therefore transporting any coal, even if you could get people on site, transporting coal down to our Gunnedah prep plant was all constrained by virtue of that limited public road access due to that flooding. But Werris Creek, surprisingly, which is normally the one that gets the most rainfall of all our pits, actually skated through that period in relatively good form and performed according to plan for the first half. So with that, I'll give you the mouse. Over to Kevin. Thanks, Paul. So let's go through the main panel balance sheet items. As Paul said, we sort of reported a record EBITDA, a record NPAT, a record cash flows of AUD 500 million, almost more than tenfold that from the previous half. We've halved our net debt from AUD 808 million to AUD 404 million. And over the coming slides, we'll take you through some of that material. If I can just unmute somewhere. Yeah. Okay. So revenue at AUD 1.4 billion. We did have sales slip out of the first half. That was really that wet weather and a bit of squeezing in Newcastle at that point. Operating costs are down a touch to AUD 322 million, but with the reduced sales volume, that's what's driving that. Coal purchases are up, as you'd expect, in coal trading because we're paying more for the product that we're trading. Net profit, underlying earnings, AUD 340 million in the profit line. We'll walk you through the capital management framework that we've clarified initially around here. The AUD 0.08 dividend is around 25% of NPAT for the current period. And due to our confidence in the operations in the coal market, the board has endorsed the implementation of an on-market share buyback for up to 10% of the outstanding shares over the next 12 months. You'll see that we've got an income tax expense there. We expect to pay tax in the second half of this calendar year. So we expect to pay tax out of the FY 2022 year, but that payment will take place in December. That's when shares will take place. That means we'll have franking credits in this calendar year, and those franking credits will be able to be applied to any dividend that's declared after 1 July. So a little bit of a deep dive on some lines here at the moment. Have a look at the drivers of EBITDA. Really, there's no surprise here. When you make AUD 202 on average realization, up AUD 121, the big impact here is price. AUD 706 million increase coming around from price. FX relatively flat, not much there. I think the first year margin that we made last year was about AUD 5 a tonne in EBITDA because of the COVID-induced effect on pricing. So really not much effect on volume there. You see costs. I'll probably say to you that I would say to you that a portion of that 80 is what's turned up in the 706 because diesel is up, and we'll go through this in a little more detail. Diesel's up, and there's some costs in there from demurrage and different things around coal quality. Take you over to achieved thermal coal price. Again, there's really no surprises there. First half last year, $55 a tonne US. This year, $146. Well, this half year, $146. $116 of that comes from the gC NEWC increase, and there's a discount there for that $25. But that reflects Whitehaven's the lag as we had rising prices through this period. And the proportion of coal that came out of Narrabri was higher last year in materials. So we expect that thermal realizations in half two will revert to averaging gC NEWC now that we've cleared that Narrabri material. And what you should see and what you can draw from the guidance is that the production sales in the second half are stronger than the first half. So we are expecting a very strong second half to come through and be reflected in the full year numbers. Over here on unit costs, you can see the groupings at the bottom, product quality strategy, some underlying cost inflation. I think our average cost of diesel f irst half fiscal year 2021 was AUD 0.52 a liter. Our average cost this period is AUD 0.78 a liter. We've had a 50% increase in diesel costs over this period. And that's just reflected in both the operations at site and in the haulage to the ports. So that's been a big impact. Again, you can see with the tightness of the coal market and the elevation of coal price, you can see demurrage. Demurrage for us in the first half was up AUD 2 on the previous. And we've had some impact of flooding and then the volumetric effects of those sales slipping out of the first half and the second half to get us to 83. So I would think that when the volume rises in the second half, that volumetric piece will unwind. Where diesel finishes, I think we'll probably see again AUD 0.78 is below where the average is for January and February. So we should see that. Demurrage will probably soften in the back end of the year, and the yield will remain, I think, because of what we're washing out of Maules Creek in terms of the lower seam quality there, the lower seams and the quality of those lower seams. So if I take it at EBITDA margin, this is the thing that warms my heart. $5 in fiscal year 2021, $102 in fiscal year 2022. That 55% margin on own coal sales is an outstanding result and is what's contributing to these improved results. Over the page, we'll take you through some D&A and net finance. I know you're interested in this. The D&A from 138 to 119, driven by decreased ROM. Because of the impairment that we took at 30 June 2021, there's a slight impact in there. But that translates because of the lower volume and the time-based depreciation into a higher unit cost. Again, as volumes come on in the second half, those numbers should reflect that a little bit better. On the net finance expense, we do expect to be well, we repaid AUD 225 million since 31 December. Expectations are that we'll repay the balance of the revolver in the next week or two, and we'll be net cash in March as well. So we're expecting and we're seeing a really strong second half of the year in terms of volumes and price, and we're certainly seeing that in cash flow. So that's fed into this conversation, I think, around where the board's described the outlook for the year. Net debt and liquidity. As I said, subsequent to year-end, we've repaid AUD 225 million. There's only 95 outstanding, and with six weeks left to go until we finish the March quarter. I can very confidently say that those numbers about being net cash in March is absolutely right, and we'll repay the facility. The strong balance sheet really is the piece that's supporting where the business is coming to in terms of returns to shareholders. The expectations for calendar year, with the tight physical market for coal and elevated prices, we really see a strong year coming. Take you over the page to free cash flow. Now, over AUD 500 million in free cash or operating cash flow. We put AUD 400 million of that to work to retire debt, which is what we said we do. Then we put about AUD 90 million in the capital. You can see the breakup of that. We will pay to support the operating and maintain safe and operating conditions in the mine. Now, AUD 40 million in lease payments, which I know most of you got, and the others just roundings. As I said, we expect the second half to be very strong. That discount that you saw on the slide there on revenue should disappear in the second half, and the volume should be up. Cash flow from the second half should be much stronger. Over the page, just want to clarify because I know we've been getting a lot of questions about this in the past. The message in here for people is we really do remain focused on adhering to a strict capital management framework. We will seek to diversify sources of capital, and the work that we've been doing on getting into the debt capital markets continues. We do plan to refinance the revolver that's with the banks that matures in July 2023. We'll refinance that in the second half of this calendar year, and we will get into the debt capital market when conditions are better. But the balance sheet's in very good health, and the credit rating and positioning of the company is improving with every month that goes past. So there's no downside in taking our time to do that and do that properly. So I said, with production and sales weighted in the second half, the return to the usual mix of high-quality coal and 6,000 K coal prices, we expect those prices to remain robust, and we expect to generate significant levels of free cash flow in the second half and in calendar year 2022. Just a couple of points. The interim dividend is unfranked because the company doesn't have franking credits. But as I said to you before, we'll pay tax out of the FY 2022 result, and we'll put franking credits in the franking credit account in the December half. So stay tuned for the full year result. Secondly, as you understand, Corporations Law limits share buybacks to 10% of the issued capital in a 12-month period. And so we envisage this buyback taking place over that 12-month period. So back to Paul and talk about how we view the remainder of financial year 2022. Thanks, Flynn. Just to flip the page here and reiterate that guidance remains unchanged. So no variations from us in that regard. Sorry, I'm just struggling to move the mouse here. Obviously, our riders to that, which we explained previously, were further weather impacts, which we had rain, but not anything as disruptive as what we saw back in November and December, and the COVID impacts, while we are still living with COVID, we are seeing that diminish slightly, that absenteeism that's associated with obviously self-isolation and so on taking place, but otherwise, we're in the right zone to deliver on our guidance. In terms of just the focus, obviously, for the year, improving our safety performances, as I mentioned, that absolutely is front of mind for us. Making sure we deliver on that guidance. We are maximizing the profit margins, as you can see. We've been washing more and harder, and that was the $3 that Kevin's outlined just in that bridge diagram from earlier. Delivering the right mix of returns or initiatives to shareholders. And as you can see, the board's taken the position on a AUD 0.08 unfranked dividend and for the first time initiated a buyback over the next 12 months. And of course, just managing the impact of Omicron on ourselves and also on our suppliers and the coal supply chain more generally through the balance of not just this financial year, but through the calendar year, I suspect, as well. So with that, I might draw this presentation to a close and hand it back to our operator to get some Q&A started. Thank you very much. Thank you very much. Ladies and gentlemen, if you wish to ask a question, please press star one on your telephone and wait for your name to be announced. If you wish to cancel your request, please press star two. If you are on a speakerphone, please pick up your handset to ask the question. Again, to ask a question, please press star one. The first question comes from Paul Young from Goldman Sachs. Please go ahead. Morning, Paul and Kevin. I hope Paul was well. First question is on capital management. You're returning a big amount of cash back to shareholders through the buyback. So that's great news. I guess the question I had is around the mix of dividend versus the buyback. Kevin, you've explained you don't have franking credits, but you will have in the second half. Your payout ratio is still well below, I guess, the rest of the mining sector as far as your threshold and certainly below other coal companies. So I'm just curious around when you do have franking credits available, do you think the dividend policy will be reviewed, say, August or throughout the year? Thanks, Paul. I might start that. Rather than sort of predicting second half sort of dividend outcomes and so on, Kevin's right to obviously point out that we are, as we speak, probably taxpaying now, essentially, having consumed the shelter that we had with carried forward losses. Paul, the challenge, as you know, with these sorts of things is trying to strike a balance because obviously there's lots of different approaches you could take, and that reflects the myriad of views of different shareholders and their different needs, and so we've tried to strike a balance there in terms of reinitiating, obviously, dividends in this profitable period. I think that's a good thing to do. It is unfranked, as we've all acknowledged. The buybacks, we're trying to balance, again, those needs of shareholders and their expressed positions in terms of what their preferences are for capital allocation. I suppose, if you like, shifting, because this will be conducted over the next 12 months, shifting to a position where you're, well, essentially fostering a further alignment between people for people to stay longer in the register than what dividends only might achieve as a capital allocation initiative. So there's just a shift in focus there on that. We obviously think that the second half is going to be very good, and the balance of the calendar is certainly very good. So we have no real major concerns in that regard. But the second half, the final dividend will be the subject of much discussion, I'm sure, with the board when that comes. But obviously, they're expressing or they're exhibiting good confidence in the outlook for the company in taking the decisions they've taken already. Yeah. Okay. Great. Thanks, Paul. And then I guess the next question as far as priorities on capital allocation, does this now signal a bit of a change whereby returns to shareholders is number one, brownfields expansions and potentially bolt-on minorities, acquisitions of minority stakes, I should say, number two, and then greenfields out on the right-hand side? Look, I think it's, well, I think you can see in our previous stated allocation framework, it was really getting the balance sheet in order, returning to dividends and buybacks being part of that capital allocation, returns to shareholders more generally. We stated before that we weren't in the frame of mind to be wanting to push the button on a project in the short term, and I think that remains clear that we're doing that. But that's not to say that we've stopped progressing work on those. In fact, Narrabri Stage 3, EIS is on this week. We're obviously devoting energy to that. Winchester South has recently concluded its exhibition period for its EIS. We're pushing ahead with that. And Vickery's secondary approval processes with management plans and others are proceeding. So we're working hard on that, but we're not doing much in the way of committing significant capital to these assets right now. We think the time will come for that, but it's certainly not within, say, for instance, the next 12 months, say, for instance. Yeah. Okay. Thanks, Paul. And last question from me. I'm just on cash flow movements. Not much movement in working capital during the period, but can I actually ask you a question on CapEx? You only spent AUD 70 million in the half, and you guided supplies, probably that and a bit more, and then potentially up to, if I do the math, AUD 120 million or so in the second half. Can you actually spend that? I mean, where will activity sort of step up on the capital expenditure side of things in the second half? I think, Young, you're answering your own question. We'll undershoot there. We'll undershoot there. There's no doubt. I mean, we obviously had, from a cash flow generation perspective, we've highlighted the fact that we had slippage out of the first half into the second half. So there is this conversion of capital just after the half year end that obviously we've used to repay the dividend further. The only thing I'd call out there for you, Paul, is being a little that goes aside or counter to the notion that we're going to undershoot generally is that we are putting a little bit more effort into Vickery, of course. And that really is just to make sure we've got the finer details of design and stuff ready. But we're not talking about big dollars here at all. It really is that at the time when we want to bring that project to the board's consideration, we want to be ready to go. And that means having all the detailed design and everything else done. So there's work going on to that, which you do count in the millions of dollars, but we're not talking cheap stations here at all. But that will fall into the second half of the year. But there's probably going to be AUD 10 million-AUD 15 million devoted to that over the 12 months from now. But that's about it outside of the normal things that we've projected to do. Thanks, Paul. I have to ask just on that Vickery comment there, I presume it may take to a board with the sell down in conjunction? Look, I think all those options, Paul, yeah, all those options will be part of that discussion, as you would imagine, Paul, because that's obviously an option for funding as well, not just long-term offtake. So yeah, at the time that we consider these, it would be considered in the context of who would you want to take forward as part of your partners for that project, for sure. Okay. Great. I'll let someone ask someone else to ask this question. Cheers, guys. Thanks. Thank you. The next question is from Alex Ren from Credit Suisse. Please go ahead. Hi, Paul, Kevin, Ian, and Sarah. Congratulations on the results and cap management. But it looks like the market is not exactly taking this massive buyback program very well. So two questions from me. So don't want to put words in your mouth, but the share price is at $3. Say on a weighted average price, by the time you finish your AUD 400 million, the share price could be hopefully at $5. Is that the upper threshold you're thinking? And you also mentioned the focus is expected to, I guess, pivot towards retaining long-term holders. So the program, is that saying the program could potentially be extended further beyond? That's it. Yeah. Thanks, Alex. Well, of course, the buyback, as Kevin's already outlined, and I'm sure you're aware, is 10% of the register without shareholder approval. And so you've got to put some limit around that rather than leaving it open as if you'll spend whatever in order to achieve the 10%. So we've put a cap on it. Now, the cap is in our view as to what represents good value or not. The cap is an assessment of what we thought was necessary to have authorized by the board in order to achieve up to that 10% threshold. So as to how the market responds over the next 12 months, who knows? We're just signaling our intent to engage in a buyback and what we believe to be a reasonable cap to be able to execute that program. So what happens during the balance of these next 12 months in that regard, we'll just have to see how that unfolds. And no predictions from our part in terms of what goes on into subsequent periods. Yeah. Understood. Very clear. And just a follow-up on that. Then how do you rank CapEx management afterwards after the AUD 400 million buybacks? So at that time, growth projects would probably start requiring major CapEx. So does that mean CapEx management will gradually pivot towards or start prioritizing internal growth for a period? Now, as I said, no predictions for subsequent periods, Alex. We're certainly not making that. And you imagine that the board will want to bear all factors into consideration as these next 12 months unfold. So if our assessment and the board's view is that the stock is cheap and the business is continuing to perform at a level that demonstrates that that valuation is perhaps out of step with our own view, then that may continue on. But that will be the board's choice to make that once we get to that position. Got it. Thank you. Thank you very much. Thank you. The next question is from Rahul Anand from Morgan Stanley. Please go ahead. Hi, Paul and Kevin. Hope you guys are well. Look, a couple from me. Firstly, following on from Paul's question, I just wanted to understand whether, I mean, you step into the second half, you've got the cash, obviously you've got your previous dividend payout policy of 20 to 50 NPAT. Is it perhaps time to start reconfiguring that to a free cash flow based policy? I mean, especially given the fact that you do have brownfield expansion, you do have greenfield projects available to start spending some of that CapEx. How do you see that going into the second half? And I'll come back with the next one. Thanks. So is your hypothesis that we should be paying out more? Is that what you're saying from moving to a free cash flow? Perhaps adding to the predictability. I wasn't counting the idea of the project falling quickly thereafter in your question. I'm sorry. So I was saying basically whether there's an opportunity here to provide more predictability of that dividend as you perhaps move into a free cash flow-based policy. So I just wanted to understand whether that's something you would consider into the second half, or is the policy what it is basically on a go-forward basis? I'm struggling a little bit with the question, Rahul, because I'm struggling to understand how free cash flow-based dividend policy would be less variable than currently, given that we are in a cyclical industry. Sure. So I guess what I'm trying to get at is if you do have lower free cash generation and you are investing in projects at a later period, that will allow people to be better prepared for a lower dividend, so to speak. But that's fine. Look, I can take this one offline with Kevin if that's okay. Fine. In terms of, I guess, the growth profile, Paul, if we talk about Winchester South, are there any updates there? What's the nature of work currently on? And how should we think about that project? Does it fall after Vickery? Is that a fair comment to make? Yeah, look, that is a fair comment to make. It does fall after Vickery chronologically, and I only say that by reference to Vickery obviously being approved, subject to the outstanding case against the federal government that's been appealed, so we're waiting on that judgment. But Winchester South is proceeding well, and so we're pleased with the progress that we've made. I mentioned just briefly earlier it had gone through its public exhibition period for EIS, so we're in the phase now up there of working with the Office of the Coordinator General to work through the feedback that has been received during that exhibition period, and so there may be some more work that comes out of that that we've got to do for any questions or submissions that have been raised during that period. Or the Coordinator General themselves may actually ask for more work as a result of further review of the draft EIS. But it's going according to plan, but it is chronologically behind Vickery, no doubt. Okay. One for Kevin, perhaps. Regarding the buyback, Kevin. Is it fair that you'd probably start considering the buyback after you've reached a net cash position? Or is it, I mean, you're not very far from it, I acknowledge that. Or if you do find the right price, you'd be inclined to perhaps delay that net cash position a month or two and then take the opportunity to pick up stock? There's a two-week period before you can start to buy back stock anyway. The net cash position on all of my forecasts is in the first half of March. I don't think that's as relevant as people consider it. The second half of this year, this financial year, with prices where they're expected to be and the volumes that are there, is going to be very strong. I think we can do two things at the same time, which is manage a debt balance and manage returns to shareholders. That's what I think we're trying to do with this in a balanced way, Rahul. So rather than wait for net debt to turn into net cash and then turn up at the end of June with a large cash balance, we thought we could do that at the half and reflect our expectations of what the full year is going to look like. There's not going to be a mad flurry of cash out the door, obviously, Rahul, because there's a process by which these buybacks are conducted. And a lot of the rules around that is to ensure that you're not disturbing the market. So that will be a measured process over a 12-month period. Okay. Fair. Okay. And then final question was around expectations for the discount. I mean, the market is very strong at the moment. Is this an opportunity to perhaps realize better prices for some of that product that falls outside spec? I know a lot of that is fixed price, but whatever is not. And how should we think about that discounts tracking in the second half of this year and beyond? Yep. That's also a good question. Thanks, Rahul. Yeah. Look, the second half is, as we've said a couple of times in previous statements and certainly again today, we'll be averaging gC NEWC in the second half for sure, which would be great. So that's very nice to move past the legacy higher-ash material that came out of Narrabri as a result of the cleanup of 109. So that'll put us back in positive terrain in that regard. So we said no low CV sales in the second half of the year. So that will certainly be the case. Having said that, that's not going to allow us to fully recover an overall look on an annual basis, a realization of above gC NEWC for the full year, even though the second half realizations are very good, as you're alluding to. So I think we'll be in the 5%-7% range overall for the year, realization-wise, when taken as a whole, once we get to the back end of it. Okay. Okay. That's very helpful. Thank you very much. I'll pass it on. Thank you. The next question is from Matthew Hope from Credit Suisse. Please go ahead. Yeah. Thanks. Look, I also wanted to just delve into the tricky question of pricing a little. So obviously, we're looking at $260 now for 6,000 kcal. Given the impact of lags, I mean, how long would it take to expect to see that kind of pricing hit some of these contracts like Korea? Or would it not happen? I mean, are we actually going to see these kind of prices, or is that still some way off just due to the lags? We've got a mix of contracts in various contract forms and durations. If you take a three-month lag, you're not going to be terribly wrong in that regard. The reference that you've made to Korea is actually the longer of those lags just because that's an annual contract, most of the contracts we have in Korea. So on any given point, they're six months in duration at an average throughout the course of the year. But you've got others which are far more prompt than that. So if you use three months, you'll be okay. All right. Thank you. And the other question I just wanted to look at was the net prices. Just wondering, what kind of prices are you getting? Most of it's not going to Japan, going to other areas. But are they following the net prices, the semi-soft, the PCI prices that Nippon's putting through, or is it some other basis? Yeah. Matthew, I'll refer you just back to the quarterly reports that we've put out for the first two quarters, because in there, there's a table in there that speaks to the realizations for our products there for you. I've got that in front of me, but if you just go back to those two reports, you'll get that. Okay. Finally, and just also final question just on Vickery. What are you thinking in terms of the timing of that, sir? If that law case was settled and passed, would you be wanting to start that immediately, or would it still, you still thinking sort of five years down the track? Certainly, come back to the previous remarks I made, not in the next 12 months would be our view. I suspect it might be a little bit longer than that. I mean, the market's in good shape, no doubt about it. Are shareholders calling for an expansion of capacity in this period of time, or do they want us to commit to the capital to doing that? I'm not hearing a chorus of views supporting that proposition right now. We'll certainly be in a much better financial position than we would have been 12 or 24 months ago, of course. We will have the capacity to do that. That liberates you to make a decision based on when you think is the right time to do that. It's certainly not in the next 12 months, that's for sure. Right. Thank you. That's it. Thank you. The next question is from Peter O'Connor from Shaw and Partners. Please go ahead. Hi, Paul. It's Kevin. Just switching gears, Narrabri. Thanks for slide 16. It's a great update. Are you into the AUD 200 millions yet? If so, what's the conditions that you're enjoying or facing? And the development slope at the moment for Longwall 203, how does it look? And I've got a follow-up. Thanks, Peter. I think Ian's been waiting patiently for a question to answer, so we'll let him unleash him. Yeah. Morning, Peter. Yeah, we are in AUD 200 million. We're knocking them out. There's a number of headings there that we're working through and developing those. I think we talked on sort of previously manning build-up. So we've been a little bit slower in the build-up there. We're largely contracted, of course, got a few things, our equipment, but that's progressing. And sorry, there was a second part to your question there. Does the conditions you're facing, what is it like, given depth of cover? Is it the same sort of on the other side of the main? Look, the conditions are better there in the shallower cover. There are some structures that we know about that we've always planned to work through, and we're just tackling them in the normal course of business. Okay. Thank you. Paul, Maules Creek, JV partner, sale process, any update, any news, any movement? Nothing I can give you there, Peter. It's been very quiet. I mean, obviously, we are all doing well out of Maules Creek in this price environment. I'm not sure whether that's playing into the speed or other or lack of it that they wanted to pursue their process. I haven't heard anything further on it. So we'll wait to see where that progresses and preserve our rights, of course. With that in mind and your capital allocation framework and the buyback and dividends, which are applauded, how do you think about keeping that in that capital allocation process? Do you slot aside a couple of hundred million just for that day that it comes, or just go ahead and assume it'll happen when it happens? Look, I think I've said earlier that in previous discussions on this topic, Peter, that our preemptive rights allow or ensure that we are offered terms similar to what somebody else has obviously tabled. And my understanding of that is that deferred consideration has been one of the underlying premises upon which Itochu has gone to the market on. Now, whether or not that remains the same in this market, I'm not sure. But that's certainly the case. And so if we were to engage in that, we wouldn't be considering there'd be a large capital outflow initially. Okay. And to Vickery, your answer to a previous question about the process, when you go to FID, is a long-term offtake and/or a sell-down part of that? Are they necessary, or are they just coincident with that event or subsequent to that event? I think it's probably preferable from my end to answer it in the sense of what's our preferred position. I mean, equity would be nice from an end user. I do note that end users seem to be talking more about long-term offtake and perhaps funding associated with prepayments type arrangements. So I think there's a bit of a shift in the market more towards that rather than equity. But in either of those forms, we would certainly explore, and it would be part of the proposition that we would want to make sure we considered at the time that we decide to go to the board and ask that question. So the trigger to start the process of a data room and a JV sell-down process or some sort of third-party process for funding, is that post the approvals being this whole appeal process paved through? 100%. 100%. Yep. Okay. Thank you. Thank you. The next question is from Chen Jiang from Bank of America. Please go ahead. Thanks, Paul. Thanks, Kevin. Just a few questions from me. Kevin, you mentioned why Kevin will be looking for debt facility when the market gets better. Just to get some clarity of the timing and what are you looking for? Are you looking to borrow again at the time when your growth projects are approved? What's Kevin's growth debt or net debt target, please? Thank you. Yeah, Chen, good question. When the markets improve, if you can let me know when that is, I'll be happy. But it's really around if you look at the business, the business is really strong. There's no pressing need to go to a market to raise capital, not for projects or for any reason at the moment. So the reason that we want to do this is just simply to diversify capital sources. And that's all it is. It's just a natural part of how does this business grow and evolve over the next decade. And part of that is a withdrawal from banking provider facilities in line with the way in which banks are their glide paths are towards 2030 and 2035. And doing that ahead of that so people understand the investors in the debt capital markets understand your business or understand our business and understand what value proposition we offer. So there's no burning platform. There's no mad rush to do it. As I said, the revolver that's due for refinances will do that in the second half of this calendar year. And then we'll take our time about getting into the debt capital markets when conditions permit and when circumstances permit. But in all honesty, the balance sheet just gets better and better over this next year. So it doesn't hurt us to take our time to do it properly. Thanks, Kevin. Just a follow-up on that. Market condition, what market condition are you referring here? How's the debt market like for a pure thermal coal company like yourself? Thank you. Pure play coal companies can raise capital in the debt capital markets. We're an inaugural issuer. It's not like we've been there. We're waiting for bond markets to stabilize and digest the various conversations around whether it's five rate hikes from the Fed or seven rate hikes from the Fed and how does all that play through. If I talk to my advisors, their view of the world is you need to see the world settle down a touch and see all that get digested, and that leads you to a conversation that says this is probably after the full year results rather than the half year results, but we'll be ready to go if conditions improve, and that's what we're planning on doing. Thanks for that, Kevin. Just another question in regards to your tax comments. Because you mentioned that Whitehaven will pay tax in the full year. From my memory, Whitehaven had tax losses. Just wondering if those tax losses can be used and the timing when Whitehaven is planning to use those tax losses. Thank you. Chen, good question. At the end of 30 June 2021, we had about AUD 600-odd million worth of tax losses. Those losses will be fully consumed in the FY 2022 year, if not having been fully consumed at today's date. So the tax that we're talking about is an income tax payable calculated on the 30 June 2022 financial statements. But under the PAYG system Australia has, that tax is payable on the 1st or the 2nd of December in 2022. Not to bore you too much, the franking credits, the franking accounts need to be brought back into balance every six months. So that's at 30 June and 31 December. So we'll make our payment in the December month. And that puts us with an expected franking credit balance in the first half of fiscal year 2023, but that would be a period in which any final dividend would be considered. So it's likely that any dividend out of the full year will be franked. Right. So the tax losses, so based on what you're saying. They're gone. Just another question to Paul, please. Just on the thermal coal market, if China continues to intervene its domestic thermal coal market like they did in October last year and then the thermal coal price plummeted after that, do you see any bounce back to the stable thermal coal price if China continues to intervene its domestic thermal coal market? Thank you. Yeah. Look, I think it's a challenge. I think it's a challenge. I mean, it doesn't obviously affect us directly, as you obviously is the premise of your question. What China does or doesn't do, I can't predict. I think it would be better for all if normal trade flows resumed, and that would be nice to see if Australian coal could access the mainland Chinese market again, so it would be hard to say. I mean, obviously, everybody around the world is consuming more energy than what they were a year ago, and that's driving the tightness. My only comment on that really about in terms of internal Chinese sort of market dynamics is that it's obviously a much more regulated market than this, and so if they decide they want to constrain internal market prices, they can. But obviously, it's not so bad when you're a vertically integrated energy company, but it's not that great if you're a mining company and you've got a cap put on the price of which you can sell internally. So what they do, I can't predict. Sorry, Chen, we'll just have to wait and see what happens. But I think generally, it would be a positive for the market more generally if we're able to normalize traditional trade flows of coal. Sure. I understand. I understand. I understand. Sorry, just a last follow-up on the timing and the pace of your buyback, please. Sorry, that's my last question. Over the next 12 months. Over the next 12 months, Chen. That's what we're going to do. Do you have any preference for the pace? Is that going to be relatively equally spread in the next 12 months? There are rules around this. There are rules around how much you can dip into the market. The general premise is don't disturb the market by doing that too much. We'll conduct the buyback in accordance with the rules that govern this type of process. Clear. Thank you very much. That's all from me. I'll pass on. Thanks. Thank you. The next question is from JC Evensen from a private investor. Please go ahead. Hey, Paul. Congrats on the results. Just one from me. The 20%-50% NPAT capital management range, just kind of looking to FY 2023, with Vickery and Winchester not being approved, what would be the use of free cash flow beyond capital management given the state of the balance sheet? Or to put it more bluntly, your net cash with no growth projects approved, any reason to cap capital management at 50% of NPAT? Thanks. Thanks for the question, JC. Yeah, look, it is a good question. There's obviously, with the outlook, we are seeing that there's going to be a pretty robust time for us going forward. So what we're signaling here, obviously, today is that all forms are on the table in terms of capital allocation. But whilst the stock is cheap, there's definitely a case for continued buyback. But that'll be something that the board will have to look at. And you might say those buybacks, the project will have to compete with the buyback alternative as well. So I'm sure that's not a concept that's foreign to anybody on this call. And so we will be in a position to be able to do that. It won't be within the next 12 months, as I've reiterated today. But all those permutations will be considered by the board during the course of the year as it unfolds. Great. And then you commented earlier about the state of the credit and bank markets looking to see them settle down before potentially approaching the market. But given coal prices and the tightness of energy units globally right now in your premium product, and you talked about customers interested in the Vickery product and the Winchester South product, and that being a lower cost of capital, would access to debt factor into management and the board's decision on when to go forward with Vickery or Winchester South if Winchester South is approved versus buying back more stock? Yeah. Yeah. I think all those things are important considerations. Yeah. There's no doubt about that. Access to debt, I'm not worried about that too much. I think Kevin's commentary was really just about timing. We were significantly prepared to go earlier, but with the Chinese property market gyrations that that caused in the bond market, we stepped away from that whilst that was unfolding. And in this new year, of course, as Kevin's noted, again, commentary on where rates are going is something we'd like to observe a little bit further. And certainly, our advisors are telling us that's the case. And we support that. So again, all these same variables will have to be assessed at the time. But yeah, we're not worried about the access to the debt. That's not something that weighs too heavily on us. If you get moving to those markets, of course, that's a little bit higher price market than what we've been historically using with the corporate facilities here domestically. I think everybody accepts that. Just on Vickery timing, with Werris Creek's life depleting or Tarrawonga's life depleting, apologies, in the next couple of years, when would you have to greenlight Vickery to replace those mines in the portfolio seamlessly? Last one for me. Thank you. Yeah. Thanks, Jay. So that's a good question. Werris is the one, two years to go after this. So yes, there's a two-year lead time. If your only source of extra tons to absorb take-or-pay considerations was Vickery, then you're right. You're relatively tight on time in that regard. That's not the way we look at it at the moment. No, we think we've got extra tons coming from Narrabri with its movement back into the shallow ground. So that will assist us in terms of making sure that our take-or-pay considerations are dealt with with the production that we have or the latent production capacity we have within the business before we push the button on Vickery. Great. And Werris Creek and the equipment can be recycled or deployed at Vickery to reduce CapEx? Yeah. There's a little bit of that working through that currently. That's right. Yeah. Fantastic. Thanks, Paul. Great results. Thank you. Thank you. The next question is from Glyn Lawcock from Barrenjoey. Please go ahead. Good morning, Paul. Paul, I just wanted to understand a little bit more just the cash flow movements over this calendar year. I understand Kevin said before no tax payable or the cash tax catch-up in December. Will you pay any cash flow tax between now and December? Because I'm just trying to understand, obviously, prices are good today, but as you said, it's cyclical and it can disappear tomorrow. And so I'm just trying to understand, will you put aside cash for the tax payment? Because I mean, if the price is four, you've been doing the buyback, we've seen this happen before where you've returned money, price falls out, and then you get hit with CapEx for a project or, in this case, a tax bill, which could send you back to net debt. So I'm just trying to understand how will you manage the balance sheet over the course of this year? Thanks. Kevin, I'll let you talk to the cash tax payment scenarios. So to answer your question, Glyn, there is no requirement for us to pay tax until the 2nd of December, and that will be out of the FY 2022 results, and yes, we can calculate what the tax liability is, and we will reserve cash to meet the tax obligation, not only out of the FY 2022 result, but the tax that no doubt will arise from coal prices and from earnings that are going to be earned in the first half of fiscal year 2023, which will be December half, so we will start making PAYG cash payments in December with the lump, and then we'll start paying tax consistently, which then should feed the franking account. Is that clear? Okay. And that's very clear, but I guess you don't know what the price will be in that first half of fiscal 2023. So is there a risk you does that then? So So if you are watching coal prices fall in the first half of fiscal 2023, does the buyback get pulled to slower to make sure you build the cash for tax? And what would you manage to a net zero balance sheet or net cash back into net debt? I think we'll manage to a net cash balance sheet. That's what I think we'll finish up, and I think it'll be strongly net cash, even with the tax payable at the back half of the year. That's our next question. With prices? That's what we're working to. Yeah. Assuming prices stay at elevated levels above the previous lows where you were burning cash, I guess. You're an informed observer here. Glyn, where do you think prices are going? Are you forecasting significant declines? Are you? you? Is that what you're saying? I'm just no whiz in a cyclical business, Paul, and no one forecasts it to go to 200, and no one forecasts it to go to 50 last down cycle either. So I'm just trying to make sure we stay conservative. That's all. I don't see any of us are any good at it. Yeah. I think we're all staying conservative. We're with you on that one, for sure. Okay. That's all I was after. Thanks, Paul. Thanks, Kevin. Thank you. Thank you. The next question is from Peter O'Connor from Shaw and Partners. Please go ahead. Paul, Kevin, you answered the last question from JC, the private investor, regarding FY 2023 and capital terms. Is the answer to that question that you have paid special dividends in the past, and that is your opportunity in addition to another opportunity in your capital allocation process to do above and beyond your 20%-50% payout ratio and buyback? Yeah. There's no reason why that couldn't form part of considerations going forward. No reason. No reason. But it comes back to the previous comment there. We are keen to make sure we have a conservative posture, that the balance sheet's in good shape. Our view is that net cash is the right position to be in. And whilst we have paid specials in the past, it's hard. I would imagine, Peter, it's hard for people to value specials given the unpredictable nature of them. And so there's probably a good debate to be had about what value you get from doing that. Is that incentivizing long-term ownership of shares, or is that contributing to volatility in the register? Agreed. Where they get capitalized. Yeah. They don't. Yeah. Probably a broader discussion for another day, that one. There's lots of variables in that. Can I finish with the notion of are you pro-cyclical or are you counter-cyclical? And your board, your ExCo, and what are shareholders telling you? It sounds like you're letting the tail wag the dog a little bit. Which camp are you in? Which camp are shareholders in? And what's appropriate in the cyclical industry? I think we've got to make the right calls that are in the interest of shareholders. That's what we're charged with doing. Last time we built a project, the fuse was already lit when we bought it. That was done counter-cyclically at the time, but that was done necessarily because that was the case when the company was acquired. Yeah, there's always a balance there, as you understand, Peter, between when's the right time to push the button on a project and when isn't. Are you going to get full value recognition for putting the capital to the project, putting our business in the best position financially to be able to make that call, to give us the greatest flexibility, to make that call is exactly aligned to what you're saying, is that is when it makes the best sense for shareholders. Thank you. Congrats on the great first half result. Thanks, Peter. Thank you. There are no further questions at this time. I'll now hand back to Mr. Flynn for closing remarks. Yeah. Thanks, everyone, for your time today. If there are any further questions, you know where to find us. We look forward to catching up in due course. Thank you. Thank you. That does conclude our conference for today. Thank you for participating. You may now disconnect.