Yancoal Australia Ltd (YAL) reported a solid operational performance for the quarter ending March 31, 2025, despite facing a weakened coal pricing environment. The average realised coal price for the quarter was A$157/tonne, reflecting an 11% and 10% decrease in realised thermal and metallurgical coal prices respectively, compared to the previous quarter. This price decline is attributed to strong supply, subdued short-term demand, and economic uncertainty stemming from international tariffs.
Despite the pricing headwinds, Yancoal increased its cash balance by $136 million, reaching $2.6 billion by the end of the quarter. The company maintained strong production levels, with 15.2Mt of ROM coal and 12.5Mt of saleable coal produced on a 100% basis. Attributable saleable coal production reached 9.5Mt, with attributable sales at 8.4Mt, slightly lower due to rebuilding stockpiles. A fully franked final dividend of A$0.52 per share, totaling $687 million, will be returned to shareholders at the end of April. This distribution will still leave the company with over $1.9 billion in cash and no debt, positioning it well to capitalize on future opportunities.
Acting CEO noted the company’s competitive advantage due to its large-scale, low-cost operations. While observing limited supply-side responses to lower prices thus far, management anticipates reductions from higher-cost producers, potentially leading to a subsequent price recovery. Yancoal’s 2025 operational guidance remains unchanged, targeting 35-39Mt of attributable saleable production and $89-97/tonne in cash operating costs.
The company’s safety performance improved, with the Total Recordable Injury Frequency Rate falling to 6.46, below the industry weighted benchmark of 7.50. Production across key assets, including Moolarben, Mount Thorley Warkworth, and Hunter Valley Operations, generally met or exceeded targets, with some minor weather and maintenance-related disruptions. Development projects, including the MTW underground mine and Moolarben’s OC3 Extension Project, are progressing through feasibility and approvals processes. Yancoal’s large cash position and focus on cost management are intended to enable the company to navigate the current cyclical downturn and capitalize on future market improvements.
