Record Financial Performance and Robust Capital Position

Yancoal Australia Limited concluded 2025 in a strong financial position, reporting an operating EBITDA of \$1.44 billion and a net profit after tax of \$440 million. Despite a year-on-year decrease from 2024’s \$2.58 billion EBITDA and \$1.22 billion net profit, the company remains highly cash generative, ending the year with over \$2.1 billion in cash and a net cash position of \$2.04 billion.

• Capital expenditure for 2025 was \$751 million, at the lower end of the \$750–900 million guidance range due to some projects slipping into 2026.
• The Board declared a fully franked final dividend of A\$161 million (A\$0.1220 per share), reinforcing the company’s commitment to shareholder returns.
• The company paid a total of A\$769 million in fully franked dividends during 2025, underlining strong capital management and investor confidence.

Key Shareholder Information and Policies

• Yancoal maintains a dividend payout policy of at least 50% of net profit after tax or free cash flow (pre-abnormal items) each financial year, with flexibility to reduce to 25% if deemed prudent by the Board.
• The company’s public float stands at approximately 29.7%, well above the HKEX minimum required threshold, ensuring liquidity and compliance with both Australian and Hong Kong listing standards.
• No Treasury Shares are held by the company, and there are currently no pre-emptive rights for shareholders on new share issues.
• There were no significant management contracts, material related-party arrangements, or loans to directors/executives during 2025, further supporting strong governance and transparency.

Remuneration Report and Governance

The Remuneration Report received an unqualified audit opinion. The executive remuneration framework is designed to be market-competitive, with a mix of fixed annual remuneration (FAR), short-term incentives (STIP), and long-term incentives (LTIP), all with clear performance criteria. The Board ensures that remuneration aligns executive and shareholder interests, incorporating both financial and non-financial performance measures (including climate-related KPIs).

• 2025 saw no material changes to the remuneration framework, with a continued 50/50 split settlement for vested deferred STIP share rights between cash and shares, and full share settlement for LTIP rights.
• Independent benchmarking will inform 2026 remuneration decisions.
• No remuneration recommendations were obtained in 2025.

Strategic and Risk Management Highlights

• The Board and Audit & Risk Management Committee (ARMC) have embedded climate-related risk management and scenario analysis into the enterprise risk framework, in alignment with new AASB S2 reporting requirements.
• Yancoal’s Sustainability Report (published as part of the annual report) provides extensive disclosure on climate-related risks, physical and transition risks, and strategic responses, including scenario analysis and greenhouse gas (GHG) emissions metrics.
• The company’s capital management remains conservative, with no significant gearing and ongoing flexibility to fund future growth and M&A, as well as address rehabilitation and closure obligations.

Key risks identified: commodity price volatility, regulatory/environmental risks (including climate policy), capital allocation, and access to finance/insurance. The company continues to monitor these risks and adapt its strategy accordingly.

Regulatory and Compliance Developments

• Yancoal has complied with all Hong Kong and Australian listing rules, corporate governance codes, and reporting obligations.
• There have been no significant events after the reporting date other than the final dividend declaration.
• New accounting standards (including AASB 18 and AASB S2) adopted have not materially impacted the company’s financial reporting.

Shareholder Communications and Corporate Governance

• Yancoal maintains a robust two-way communication framework with shareholders, including timely disclosures on ASX and HKEX, and facilitation of electronic communications and proxy voting.
• The company’s Share Trading Policy and Whistleblower Policy have been updated and all directors confirmed compliance during 2025.
• Shareholders holding at least 5% can call general meetings or add resolutions, supporting minority rights in line with global best practice.

Climate-Related Financial Disclosures and Sustainability

• Yancoal has published its first climate-related disclosures under the new AASB S2 standard, including scenario analysis, risk and opportunity mapping, and climate resilience strategies. These disclosures are subject to limited assurance by the external auditor.
• The company identifies both physical (e.g., extreme weather) and transition (e.g., carbon pricing, regulatory change, market access) risks, with corresponding mitigation and adaptation strategies. No material residual physical risks remain due to implemented controls, but transition risks (especially carbon pricing and structural decline in thermal coal demand) remain potentially material.
• Yancoal is proactively managing its carbon credit purchases and transition planning, but notes that future access to finance and insurance is an emerging risk that could impact capital allocation and free cash flow if not mitigated.
• No voluntary climate-related targets have been adopted, but the company complies with Australia’s Safeguard Mechanism and monitors Scope 1 emissions closely.

Price-Sensitive and Shareholder-Relevant Issues

• The significant decline in net profit from 2024 to 2025 may be viewed as a negative earnings surprise, potentially impacting the share price in the short term.
• However, the substantial cash reserves, strong final dividend, and debt-free balance sheet provide a positive underpinning for investor confidence and future flexibility.
• The adoption of new climate and sustainability disclosure standards positions the company as a leader in governance and transparency, which could positively affect ESG-focused investor sentiment.
• Risks around future access to finance and insurance — if these escalate or materialise — could have a material adverse impact on future capital projects, growth, or shareholder returns.