Q2 2024 Whitehaven Coal Ltd Production Report Call Transcript

The following is excerpted from the question-and-answer section of the transcript.

Question: Rahul Anand - Morgan Stanley - Analyst : Hi, Flynn, good morning. Happy New Year, couple of questions from me. Look, firstly, you've talked about the cost headwinds and the move to the higher end of the cost guidance. Can I please double check in terms of your switch to Maules Creek with Narrabri. I would have thought that Maules is a lower cost asset, probably a higher fixed cost base than Narrabri . Shouldn't you be getting some benefits out of that switch and then how am I what am I missing with?

Question: Rahul Anand - Morgan Stanley - Analyst : Got it. And just to follow up there, obviously, Maules Creek doing really well this period. Any sort of relief from the automation side that led to this, are we progressing more towards resolution to that situation? Or is this purely just operational improvement on the back of new mining areas opening up?

Question: Rahul Anand - Morgan Stanley - Analyst : Got it. Just one question which might have been answered with your acquisition presentation, but I haven't gone back to it. You talked about how Blackwater might be the first one that you'd be able to get another party interested, who's an offtake partner. What is the current nature of the offtakes at the asset? I mean, do these are the other long-term offtakes already in place or are some of these coming up for renewals that someone might actually be interested because if they've already got long-term offtakes in place, I'm trying to understand why they want to buy asset.

Question: Rahul Anand - Morgan Stanley - Analyst : Got it. Look, I've got a few more, but I'll keep back in and come back. Thanks.

Question: Chen Jiang - Bank of America Corporation - Analyst : Good morning, Paul. Thank you for taking my questions, a couple from me, please. Firstly, just BHP, reported yesterday and increased the BMA cash costs. I'm wondering if your cost guidance provided in the last October still intact for Blackwater and Daunia. Could you please give us some how you are going to reduce the cash cost substantially in the next few years. From the current level BHP guided US [110 to 116] for the current financial year? Thank you.

Question: Chen Jiang - Bank of America Corporation - Analyst : Yes, sure. Thanks for maybe just another follow-up on the BMA. BHP, yesterday mentioned that there's a significant increase in the plant maintenance across all the BMA assets and also increased prime stripping. Is that what are you expecting towards Blackwater and Daunia as well, we will take over the operations in two or three months' time. Thank you. Sorry, early April.

Question: Chen Jiang - Bank of America Corporation - Analyst : Okay. So you are expecting the plant maintenance -- increased stripping from Blackwater and Daunia, okay. Thank you, may be last question -- REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. JANUARY 18, 2024 / 11:30PM, WHC.AX - Q2 2024 Whitehaven Coal Ltd Production Report Call

Question: Chen Jiang - Bank of America Corporation - Analyst : Okay, all right. Thanks. Maybe last question, Paul, please. Just in regards to the 20% sell down it seems like you prefer to sell down the minority from Blackwater and then Blackwater and Daunia will I mean sell separately, different JV partners is my understanding correct? And then what is the current thinking around the use of proceeds from the sell down. Will this go towards reducing your [gearing cape] the balance sheet or returned to shareholders. Thank you.

Question: Chen Jiang - Bank of America Corporation - Analyst : Okay. Thanks, Paul, for that I'll pass it on. Thank you.

Question: Paul Young - Goldman Sachs Group, Inc. - Analyst : Hi, Paul and Kevin, Happy New Year. It's Paul Young here. Have you had a good break over Christmas. The first question is on the operations, specifically on Narrabri. Paul, I guess it's another year, another geological sort of challenge I guess, we've seen [dikes] and faults intrusions and are now washouts. So trying to get a sense of on the go forward, particularly for say, the next one or two years. Can you just step through any other geological features that you want to call out and also just remind pleased of the timing around the longwall changes.

Question: Paul Young - Goldman Sachs Group, Inc. - Analyst : Okay, great. Thanks, Ian. That's good detail, maybe on a projects and that announcement of the CapEx reduction that around AUD100 million. Paul, any sort of thoughts around you reassessment of projects and sequencing of projects Vickery versus Winchester versus brownfields. And how are you thinking about sequencing projects and sort of CapEx cuts are concerned, I presume it's out of development growth and the other buckets that you released with your FY23 results?

Question: Paul Young - Goldman Sachs Group, Inc. - Analyst : Yeah. Thanks, Paul. You're saying basically it's basic, mostly narrow bright just a little bit.

Question: Paul Young - Goldman Sachs Group, Inc. - Analyst : Okay, great. Just last one, just on cash flow movements and also the financial result. But as far as where the cash balance said or you have the cash tax you've articulated there and also the deposit but anything else you want to call out for that cash flow perspective understanding that inventories came down. So I think that working capital came down just that cash balance was a little bit lighter than maybe some expected?

Question: Paul Young - Goldman Sachs Group, Inc. - Analyst : Okay, all right. That's great. Thank you.

Question: Chris Drew - Jefferies LLC - Analyst : Morning Paul. Kevin, Happy New Year and thanks for the call. Question on, I guess the autonomous haulage sort of following up from the earlier comments, I guess you're getting towards the period that you've given yourself the assessment of whether to pursue or continue this. Any comments on kind of how that is shaping up, are you sort of starting to get a little bit more confidence in what's happening there? Thanks.

Question: Chris Drew - Jefferies LLC - Analyst : Great, thanks. And perhaps just a point of clarification on the CapEx reduction you sort of suggesting this plan is just to CapEx reduction and roll into FY25 or is there is would that be it align with your expectations?

Question: Chris Drew - Jefferies LLC - Analyst : Thank you very much. Thaks guys.

Question: Glyn Lawcock - Barrenjoey - Analyst : Morning Paul, Happy New Year. Maybe we could just touch a little bit more on your cash position. Thanks and I heard what Kevin said about working capital to unwind in the second half. You've got to pay BHP AUD3 billion probably in April, another AUD400 million in stamping costs for the advisors so AUD3.4. We've only got [AUD]3.1 billion facilities both cash and the new debt facility you put in place. So you're about 300 short you only generated free cash flow in the last three months of [50 million] How do you think about that funding shortfall or is there enough working capital unwind or what? Thanks. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. JANUARY 18, 2024 / 11:30PM, WHC.AX - Q2 2024 Whitehaven Coal Ltd Production Report Call

Question: Glyn Lawcock - Barrenjoey - Analyst : Okay, understood. I mean, obviously, price can move around, but it's just the one funding facility you've got the [1.1] you just put in place, you didn't hang on to the [AUD]900 million facility that's gone.

Question: Glyn Lawcock - Barrenjoey - Analyst : If I was to be right, I guess you just get more facility in place to bridge whatever the gap between that the sell down anyway?

Question: Glyn Lawcock - Barrenjoey - Analyst : -- Then look forward to look just on the acquisition and the assets. I know Paul, you haven't taken control and you've made a few comments about that already, but you've obviously got access to site, you've been up there. BHPS, said about 60% of the reduction was weather related and the other 40% of the reduction was obviously the disposal of the assets. It has been extremely wet both in the South and North. Can you make any comments about how the mines fit with the mine fed with the rain, your observations being on site? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. JANUARY 18, 2024 / 11:30PM, WHC.AX - Q2 2024 Whitehaven Coal Ltd Production Report Call

Question: Glyn Lawcock - Barrenjoey - Analyst : And then just on the sell-down, just as a final follow up? Yeah, we see it will be an offshore buyer, so probably a little bit more scrutiny on the acquirer than being put on yourself buying the assets of BHP, how quickly do you think you could close something behind the April, 2 is it a matter a quarter or is it going to take a little while, do you think?

Question: Glyn Lawcock - Barrenjoey - Analyst : And the 20% is a hard number you want to go above it. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. JANUARY 18, 2024 / 11:30PM, WHC.AX - Q2 2024 Whitehaven Coal Ltd Production Report Call

Question: Glyn Lawcock - Barrenjoey - Analyst : All right. Thanks so much for your time, Paul.