Yancoal Australia (ASX:YAL) executives highlighted record production and lower unit costs in 2025, while noting that weaker coal prices weighed on earnings and cash flow. Management also outlined 2026 guidance that targets broadly similar production levels, modest cost inflation and continued capital reinvestment, alongside a fully franked final dividend in line with the company’s framework.
Record production and lower costs
Chief Executive Officer Sharif Burra said Yancoal delivered “a great operational performance” during 2025, reporting run-of-mine (ROM) coal production of 67 million tonnes and attributable saleable coal production of 38.6 million tonnes. Burra described the result as a company production record and said it landed in the upper quartile of guidance.
Executive General Manager Operations David Bennett said ROM and saleable coal production rose 5%–7% versus 2024, and that production was more consistent quarter-to-quarter in 2025, enabling additional optimization and efficiency gains. Bennett added that Yancoal encountered above-average rainfall at its New South Wales mines, but prior investment in water storage capacity helped limit disruptions.
Bennett also cited two world records achieved with Liebherr R 9800 excavators, including 17.6 million bank cubic meters (BCMs) of total material movement at Moolarben in 2025 and 1.75 million BCMs of movement in a month at Mount Thorley Warkworth (MTW).
Coal market conditions and realized pricing
Executive General Manager Marketing and Logistics Mark Salem said 84% of 2025 sales were thermal coal, with the remainder lower-grade metallurgical coal. Attributable sales were 38.1 million tonnes versus 38.6 million tonnes of attributable production, which Salem attributed to weather-related vessel arrival and cargo assembly delays that pushed some sales into January.
Yancoal’s overall realized price was AUD 146 per tonne for the year, down 17% from 2024. Salem said “strong supply and benign demand conditions” persisted in international thermal coal markets for most of 2025, with short-term movements influenced by factors including geopolitical events, Newcastle port disruptions, China economic initiatives and seasonal patterns.
In Australian dollar terms, Yancoal’s realized thermal coal price was AUD 136 per tonne, down 15% year-over-year. The realized metallurgical coal price was AUD 203 per tonne, down 26% from 2024, with Salem describing demand as lackluster amid China’s steel exports displacing production elsewhere.
In Q&A, Salem addressed market speculation about potential Indonesian production cuts, saying the market reacted to comments made by different ministers but that “none of those comments or rumors have been verified yet or have been made policy.” He noted Indonesia’s domestic market obligation discussion included moving from 25% to 30% for domestic use. Salem added that coal markets softened during Chinese New Year and said he expected prices to be “relatively flat,” citing globalCOAL Newcastle near US$114 and API5 around US$84 at the time of the call.
Salem also said demand for higher-quality 6,000 kcal thermal coal into North Asia was “very stable,” adding that Yancoal was seeing “very, very solid, consistent demand,” including heightened focus in Japan on security of supply for premium-quality material.
Financial results and dividend
Management said lower realized prices drove a 13% decline in full-year revenue to AUD 5.95 billion and reduced operating EBITDA to AUD 1.44 billion, which Chief Executive Officer Burra said equated to a 24% margin. Profit after tax was AUD 440 million, or AUD 0.33 per share.
Burra said the company’s realized price and costs implied a cash operating margin of AUD 39 per tonne after government royalties. Bennett emphasized the importance of maintaining low cash operating costs through price cycles, noting that while margins have contracted from prior years, they remained positive in 2025.
Executive General Manager Finance Mike Wells said the reduction in operating cash inflows reflected lower operating EBITDA. He also noted AUD 769 million was distributed to shareholders during the year and capital spend was AUD 750 million.
Chief Financial Officer Kevin Su said the board declared a fully franked final dividend of AUD 0.122 per share (AUD 161 million). Combined with the interim dividend of AUD 0.062 per share (AUD 82 million), total 2025 dividends were AUD 243 million, or just over AUD 0.18 per share, representing 55% of reported profit after tax for 2025.
Su also pointed to Yancoal’s dividend track record since 2018, saying the company will have distributed over AUD 5.3 billion in franked and unfranked dividends combined, or around AUD 4 per share, including the 2025 payments.
Balance sheet, capital allocation, and shareholder questions
Executives repeatedly emphasized balance sheet strength, with Burra stating Yancoal had AUD 2.1 billion in cash and no external debt as of December 31. Su reminded investors the company repaid more than AUD 3 billion of loans in the three years to early 2023, which he said transformed the capital structure compared with prior cyclical downturns.
During Q&A, management addressed shareholder questions on dividends, franking credits and capital flexibility. Su said Yancoal aims to maintain consistent distributions under a policy of paying out 50% of net profit after tax or 50% of free cash flow (whichever is higher), based on “pre normal items,” meaning non-cash or abnormal items are excluded. He also said the company intends to link its AUD 2 billion-plus franking credit balance to ongoing dividends “instead of using the franking credit as a special dividend payment.”
Executives also responded to questions about the company’s cash balance and market reaction to the dividend. Su said management sought to balance growth and dividends, and noted the company keeps flexibility to pursue value-accretive opportunities, while following its stated dividend framework. He added that Yancoal places cash into term deposits to maximize returns, citing an indicative return of about 4% plus or minus.
On foreign exchange, Su said Australian dollar volatility can create foreign exchange losses on U.S. dollar working capital when the Australian dollar appreciates, and suggested the currency could remain elevated in 2026 given differing central bank policies. He said most costs are in Australian dollars, with some U.S. dollar-linked expenses partially offset by a “natural hedge” from U.S. dollar-linked revenue indices.
2026 guidance and operational outlook
For 2026, Su guided to attributable saleable production of 36.5 million to 40.5 million tonnes, cash operating costs of AUD 90 to AUD 98 per tonne, and capital expenditure of AUD 750 million to AUD 900 million.
In response to questions about production cadence, Bennett said 2026’s first quarter was expected to be the lowest for coal production, with a more even flow expected across quarters two through four. He added that open-cut operations would likely focus on moving higher overburden volumes in the first quarter to unlock coal for later production.
On mine-level dynamics, Bennett said large New South Wales open-cut mines were expected to be broadly consistent year-over-year, while the underground portfolio was expected to see a step-up at Ashton following a prior relocation to a new mining domain. He also said Moolarben Underground would be lower due to an additional longwall move, but that overall volumes in New South Wales and Queensland were expected to be similar, with slightly higher coal production overall in 2026 in line with guidance.
Management also discussed inflation expectations embedded in guidance, noting labor and maintenance as key cost categories expected to face inflationary pressures in 2026, with potential offsets from production volumes and productivity initiatives.
On sustainability and climate reporting, Burra said the company published AASB S2 climate-related disclosures alongside its 2025 results and plans to develop a climate transition plan in 2026. He also said a sustainability digital data platform launched in the third quarter of 2025 to improve sustainability data capture and governance.
Yancoal said it expects to release its next update on April 21 with the company’s first-quarter production report.
About Yancoal Australia (ASX:YAL)
Yancoal Australia Ltd engages in the exploration, development, production, and marketing of metallurgical and thermal coal in Australia, China, Japan, Taiwan, South Korea, Europe, Malaysia, Vietnam, Thailand, India, Chile, Indonesia, Cambodia, and Bangladesh. The company owns a 95% interest in the Moolarben coal mine located in the Western Coalfields of New South Wales; 80% interest in the Mount Thorley and Warkworth mines located in the Hunter Valley region of New South Wales; and 51% interest in the Hunter Valley Operations located to the north-west of Singleton in the Hunter Valley region of New South Wales.
