Coronado Global Resources (CODQL) 21 Jul 232023 Q2 Earnings call transcript

Thank you for standing by, and welcome to the Coronado Global Resources Second Quarter Investor Call. [Operator Instructions] There will be a discussion of results from the CEO and CFO followed by question-and-answer session. [Operator Instructions] I would now like to hand the conference over to Andrew Mooney, Vice President, Investor Relations and Communications. Please go ahead.

Thank you, operator, and thank you, everyone, for joining Coronado's second quarter investor call. related quarterly outlined the volumes performance. our as key our in and as released results, other we safety which production information we report and ASX to SEC, well coal Today, markets our financial to and sales more our financial and Form half earnings be of XX-Q results the Xth our market release. to and the on outline of detailed will A position released August with year

Gerhard encourage Thompson; joined Within by Director and certain of We our numbers you measures. dollars our see and and our review Ziems. ASX SEC. Douglas conjunction in I'd financial otherwise metric also ton will forward-looking CFO, in with U.S. I'm unless report, Today, statements that regarding and Group non-U.S. statements stated. all Managing notice our GAAP you remind CEO, filings quotes reconciliations the our to other and with everyone these Coronado

I Douglas. hand With to over that,

all Andrew, the to Thanks, the who join well performed Coronado June thank to call in quarter. made time and today. team The you of you our

progress and continue plan, to sheet into waste for healthy company business quarter-on-quarter remainder well only growth balance and deliver quarter saw These and according our set to movements our initiatives. volumes, liquidity higher up not business milestones the the maintained but sales strong XXXX our future. to also of the will and we several The We production, achieved. delivered the continue while

rate In addition, improved the recordable further our year-on-year. team upon safety

at we to our pipeline projects. a negotiated reduction new year-on-year. and successfully into our released a and organic reduction that fifth continue agreements in enterprise emissions also sustainability emissions capital growth in reflects We report invest X-year We Curragh,

to be reducing coal by diversity delivers report from get growth of underground for aligns that this It production thereby million project organic strategy. North I'm their XXXX. The also development. cut project saleable and We'll by met the underground today, XX.X supported Board And strategy. project of our risk. our of This the open approval underpins Curragh seeking Curragh officially pleased our from coal and Directors tonnes from complex supply to

project extensive many the successfully. mines. pleased the is operated Curragh ramp-up producing very of And team to projects Buchanan and We've I'm the targeting and running for tonnes to by program in U.S. Pillar Bord on XXXX. McCann business budget. experience has operations years, a with report Coronado also powerful are Longwall and in XX.X saleable have expansion production expansion million underground that and

business of attention is our the approved highest the further Board ] will a the have on since model. Operating our shortly, financial full the The the generated operating revenue notably, organizational will we like elaborate to revenue performance but [ Officer. to draw first change, Chief global ensure to I'd second this the change quarter, of first In potential group's nearly half June to that $X.X which in a billion inception. your change position the also of business, XXXX. Gerry This leverage half

I'd results, and attention to further like safety,. we focus our production Before on financial to turn

total well-being June X.XX% to total relevant as was recordable at reportable of X.XX% averages. injury X.XX% incident X.XX% rate was recordable incident management If last improvement. our of at people quarter-on-quarter. people. compared a June same X.XX% level, year, a and reflecting of XX% once group in March, XX% efforts the compared improvement. our as at industry reflecting March, fact frequency XX% our improved leadership the the the better Our of as and is the below This And rate in compared In again advise Their results we our business X.XX% end is to was improvement relentless reportable priority. this that the to businesses than is a continue pleased end the #X I'm of our safety to U.S, shown And the Australia, time total reflecting be XX% to last well Coronado's the the year. to rates end go rate XX-month time XX-month of

equipment by During achieved started our drag milestone continued the time to in reduce and drag quarter, time at XXXX safe driveline achieved work In our the complex complex is of the of the Logan ] to this complex The interactions lines continue Logan Curragh [ be the proximity environment. our has free. this inception. the and promote hours this truly man the tremendous is of X is the our will Mining This quarter, all a million this and lost first role expect team work by on effort team. of and completed end the risk lines to awareness personnel across year. the with technology Intent program. enhanced since

regard in and to the we make this learnings whole industry to industry as are for strive workplaces the safer our our available We freely all. making

month production. the by the production September March XXXX. months month X production since the at delivered XX% quarter, tonnes. X.X X.X saleable run-of-mine XX% is X last approximately respectively. million our tonnes March performance of million tonnes. operational tonnes. million best on to a March at mine improvement long on with of quarter. The improvement, improvement on quarter is X.X of excellent complex a solid building delivered XX% tonnes rate and second Curragh the tonnes and XX% completed Turning This coal had This The production the saleable performance. the per Curragh's and averaged Curragh quarter, a production on in million is salable of an a production production and is million coal This for X.X a run a June more quarter Coronado X group million than [indiscernible] a

the quarter, mine advanced What's year. exposures second note Curragh significant up setting of the quarter, are the the was the highest well a during coal the results in June history complex. than the June XX-year actions the half prime and is conditions of These plan team's One addition, in movement the executing improved quarters. impressive was prior waste for focus the nearly compared waste improvement works on to combination identified weather movement the continued In significantly the of movement Curragh waste a March in quarter. to higher Curragh XX% for quarter the

also On The valuable new at the commitment in stability, Xth a company Coronado's contribution enables our the well-being. employees with demonstrates workforce of new recognizing successfully negotiated enterprise workforce July, the their X-year but overall Curragh. to and agreement EA

our saleable million their only did very the with another was and U.S. quarter. to with longwalls. achieve the peers substantially the production and tonnes Long at outage million. the shorter this In is any Buchanan production successful in that than X.X is Longwall This X required of days of underground X had result and have the Buchanan operations move strong coal a good quarter, environment, continued was the performance X.X and move. we capitalization

prior tonnes. Logan our saw quarter X quarter, Rail tonnes, June Australia for This X.X million once the and quarter. group a continues the were we Also in U.S., the May, the improvement And set record during in volumes on million respectively, in that March. late for is across production also to tonnes the million sales. be some Complex. this X.X Eagle across an #X, performance X.X% Sales pleasing strong. new is improved the and quarter following and delays performance again, at their performance

returns strong maintain we see June during things in December. conditions saw continuing performance, high the to This we existing beyond to reflects finish guidance. like with September Coronado quarter. to improved and build. production obviously and our control expect the average anticipates stock and will Curragh slippage weather production sold production our September rates and deliver levels July This in on The some July, June stockpile into inventory inventory be

And position will to with I'll this, financial our market through Gerhard, and you over outlook. some hand take who

good and day, Douglas, you, everybody. Thank

premium half result we XX% the Douglas were a this billion. strong index, earlier, benchmark with As achieved second the short decrease liquidity time in half since healthy lower the USD for USD still are just due year of Coronado founded revenues were the we to and year the versus company. XXX first highest quarter FOB last half revenue a and group low-vol balance sheet than revenues but Half levels. ended June million, revenue X.X mentioned year year

June, The position year-to-date group which XXX as and per liquidity and the pricing company's XXX maintained domestic Australia creates coal met of $XXX index cash million, It's and X hard was FOR price and was FOB XX price USD a of coal contracts, of months realized we to for net XX% tonne. coking the per tonne. to the a June, it average averaged million. available $XXX USD And mixture on realization

successfully bonds outstanding closing cash net balance during a position executed Our to And of XXX quarter, our in the the refinance million. USD an cash USD facility. ABL of of we agreement million order consisted XXX in

increased refinancing, July have to million date the limit the maturity and USD until from extended million of we the USD part XXXX. As facility XXX XXX

agreement the expect July. in to We complete

quarters XX derailment lower Year-to-date, on time. to line inflation, average the above-average and mining costs by March the the were weather tonne. January per USD sold are at following wet per the for from tonne group deferred cost driven following train impact Higher mining the per quarter tonne production and in the Blackwater in

in XX second with half the average weather weighted company mining year-to-date year. be year prior maintenance of tonne the second lower given of to wet some to deferred and USD X% in production And are programs the million to works was cost compared down quarter. same plans half CapEx The per first expects the as to half period the second

market we 'XX in the announced invests including higher plans guided, weather of The organic be CapEx works capital year of and Curragh remainder is underground occur the and the weighted today, guidance. events is projects. meet into Buchanan's second may guidance expected that the wet second pilot half focus previously extraordinary to subject to as any the growth And in gas previously FY to As half projects, in the XXXX production deliver for group reaffirm to expansion year.

the pressure in to the continue We of remain continued also inflationary industry. watchful

tonne. for tonne, average quarter Australian March June the June for Coast XX% down average per the benchmark markets, low-vol the of compared quarter price XXX a core XX% East the being coal also the index price USD hard for quarter-on-quarter coking per reduction to price the USD tonne. On was with U.S. per index benchmark premium average In XXX average quarter, June low-vol FOB $XXX we quarter price saw

of improved from global lower Australia in steel to steelmakers conditions demand fall due June prices quarter primarily The Europe continues prices supply absence from Japan, pressure steel India. steel margins environment The economic with higher Korea, and and and to weak material procurement. is to delay continuing to put and outlook demand on an strong restocking due steelmakers in raw

production Chinese high. remains steel

in price China. Expectations to margins are However, stimulus improve weak domestic the to to steel markets forcing volume to measures export put steamers be expected They of and sentiment quarter market. to infrastructure real demand conditions demand and improve continue China late further are X, in quarter could incentives on pressure divert estate X. and

and As July season before return projects. planned we're bearish [ following the the demand from continued and on. segment improves restocking restocking we for monsoon ] to growth in country's anticipate demand market short-term for the dynamics dampen coals there then steel will demand and forecast August in continue pricing And metallurgical infrastructure

today. price that, the still good looks benchmark like a that a is floor and where price, good. said price we it is current very, appears having And the for new very -- it an are that coal level It's exceptionally met it's

So up despite $XXX than with long-term for XXX later the of the the to to per short-term projecting year. forward SGX average the expect tonne per curve the going remain headwinds, of remainder greater mentioned price $XXX tonne above USD XXXX, even we pricing prices in above

back I projects. to discuss over will So hand to growth our Douglas Douglas?

I'll Thanks, first undergoing project. our mate. to attention draw

the open cut by XXXX. of sought in for project XX.X production are our And coal our in project the from strategy As we quality support I of late this be of gained to opening highly my program mentioned project. has will The Board presently. the that deliver complex Curragh delivering coal similar salable XXXX. after from have And underpins development our remarks, late us delivering north June first

So similar from underground products will come the project.

the of mining X Phase to utilize the Pillar This by would also wall continuous we're expenditure, reduces capital to will final significantly once via only the give project million in start-up The to virtue utilize between and method, high and tonnes seams. cost. access but reduces of production. direct X.X will not coal us looking project produce and the X million Bord production miners X salable full the

that reserves exploit is phases open-cut million estimate tonnes. the Resource options. XX present coal approximately Future are will ROM under also

our kilometers continued the will we quarter, as quarter drilling, drilling and done third June program project. XX into continue we the and and of is X During this We've the this results holes favorable. almost of mature

And coal Now a use this operating turning online run XXXX in gas. and project. We to have program project mine to diesel progression fleet delivered gas-fired first gas and The intends come to X our substitute to intend these waste X trucks our half a trucks. capture gas fleets. to as and it planning our in this utilizing gas sufficient at has the wells as the produce of been stage of

During quarter, fuel June first successfully we the commissioned our truck.

the diesel this the To will project been been So has run has X run part and or for gas. on about date, trial weeks. trial truck this to And successful. this successful of will XX

In the also finished quarter, we the primary wells. drilling

in seeing wells X, [ gathering our and diesel Once equipment. to the usage drilled the emissions And also that will be for gas we'll we've also the the reduce but release our commissioning and project reduce [indiscernible]. complete, is these fully costs quarter from usage Curragh, changing fleets. [indiscernible] in by intersected So ] commissioned, gas

hoisting Turning any on only program the operations the set but the potential And this chain well. of the X increase underground. construction States. U.S. The the reduces will of I storage being the million operating communicated not in to to by to and grow is have at we line. progressing plan, Buchanan to surface of continues capacity new produce from as projects is second capital This rule earlier. progress stockpile also XXXX. also if United risk Construction will bound works our This increases our delays skips together stock tonnes down logistics on capacity our our

to like last to And as I'd week, before your our draw our Officer. Q&A, attention Operating we move we Chief to Group where Bitzer appointed announcements Jeff

the Operating demonstrated has in deliver [indiscernible]. the results of us group the Chief past by role, accepting, Over and new the are this career delighted Jeff U.S. experience and a I to operations. by great X years, leadership our team that role is he in Officer the exceptional as delighted His of target I'm and know for rest him

will over our operator I'll any questions. of now to turn the take who

Paul comes Your first Instructions] Sachs. Young from [Operator Goldman question from

really record Well, first, Doug, that just good I waste movements. production on to Curragh, coming to also see and focus you on that the performance out, think through called

Have about second curious on movements? just Just half waste for on are on looking that, you all outlook again Curragh, up waste caught the at I'm you half? Or your second just the of movements waste movements. higher the in

we a we've very performance. much -- not stripping got thanks that, last mine over communicating close to in this a plan but Paul, stripping for long-term we're to the ratios. fit long-term sustained investing We're our the at there that the flow to stage there months get of as to been We've plan core quite XX recognizing the at mine being probably have be stabilized will ratio. yet,

see coal to focusing that waste because movement exposures. on that's the we waste prime what -- continue movements, So to should drives we higher particularly continue but

And your sales last the or over inventory, great. That's at X X the production coal just on versus looking quarters. Okay. just then

inventory up million Curragh? built have or if calculations. what product about tonnes far finished might you're do X.X so sitting that an I at on inventory just rough as as You right, Is of

That's about right.

chart just continuing Okay. then And a short questions. on few Great.

to Bowen the et difficult money rain, half. all spend mean, wet with -- first the the been Just the CapEx. in I on it's in the cetera,

that Is on You're the looking going Buchanan in for second spend end at early sustaining? thereabouts the top Curragh? the Or that mostly and XXX underground USD the works going million into of at a or is mostly of sort guidance half. at

also but of we was will the half Bowen first a XX-XX we There's CapEx, for half $XXX that actually conditions spent of half on scheduled I another wouldn't And was lower drier a pushed work probably into second to guidance. I million a or point the say end The bit Yes. the half. second lot on we little spot Basin. even expect CapEx the difficult. we probably Paul, the of lot see million, have would $XX Look, second where because in more maintenance

Okay.

lastly Okay. Curragh. at nuance you a around Got there, outlined And there, given see said think fleet. operations, us more detail to you've guess, underground think I that was there that and the it the production will resource. the the on that it. good diesel, just on I a bit approved I And you've And lower cost your more but gas around

I operating had this if XXX, a can the underground for around running your tonne what just AUD have been what to capital AUD actually is budget what weighted for And an cost this cost from project? question the But your perspective, at FOB, the is And one at Curragh? project. capital cost average at is do XXX Curragh budget

the I can Paul, this if it's way, move let's don't quite I for budget think this I cheap. we specifically the capital disclosed one. What look say probably -- at is,

I'll Let's this way. put it there. leave it

Right.

X case, or be capitalized? just is it's X ahead expect as continuous that development in So -- miners of go we those, this we the Do going to go [indiscernible]? -- development really

makes a box have for way -- we It's When say in but the all to that to cost, it per through a lot this. Others development you And and a don't cuts between less. the cost underground tonne. look also $XXX lot call the the enter We highwall capacity necessarily, about talking expensive tonne at build Australia, lot want it's I'm the you we cheaper. because can I do sits $XXX of range less. can average and per in simply average it the

be guidance it to new that lot a establish cheaper will establish. project, So I don't for want a to but

it don't reduce to for the Again, then digits, long-term power of cost? the Curragh. single we and therefore, will digits also but overall good single double guidance, And definitely what cost Probably Coronado. it normally then not digits, do does

Yes.

Okay.

question. So this capital sensitivity cost I'll project? of pass Why the last over it on, just the one

Say again?

you aren't project? Why on disclosing this the CapEx

I we also At previous want refer to don't on the towards guidance, but made $XXX this. we And give announcement this we -- can to stage, roughly million. you provide have guided

that given number. have You

Yes.

We at previous had [ XXX. a ] have guidance

Okay.

did it Sorry, pass I'll on. I that. miss

Glyn Lawcock Next [Operator question comes Barrenjoey. Instructions] from from

time line you project. little the have approved you've on what's me in just could. if a done? permitting through like Could It the just side? the left time required talk just I And bit Maybe it Curragh underground, enough more maybe seems on to get you

You're to all the buying you spending going start equipment need.

Just what around the permitting? risks are the

project Yes, path on to we critical the equipment U.S. understanding our the from of assembled view, of best perspective, in have Australian a that's best my identified, the items but approvals of our We've critical lines. Procurement and is us what the one expertise, and of team time our some path. support an including in owners in

an to mining to the area Pillar, there in on using approval. it will substance have And method more It that The we're being no The open deploy from we're be bought mine this areas surface from method we underground mining be that is we're change can mined. perspective. area that seeking that mine into. makes approval looking and an We a going particularly perspective. proved sense cut

to we what set lines the are We've line. But are this the we're have a on or program that the seeking we're engaged will So best time for And realistic. comfortable work information we already with them that we time and through at to do. authorities approval. stage explained

time. at what manner can a at procurement got that planned procurement well a perspective stage. within We we phase totally stage. comfortable quite we're with going procuring there derisks we're From fleet delays, this can if a any see we've And through that in are of secure we're fleet, ourselves the but this

just involved? bit just sorry, department And delve mines rigor deeper the go then anything that? much is little it I is Like simply public how Does makes on permitting. it can review have like the for the or to a decision? maybe back Or

the going approval stage, be and for this departments authorities government mine we'll the At through relevant approval. for

to But public reopen out doesn't that like you up that? think scrutiny goes -- or anything you back don't the it

is price At this stage, this now, stage, the it but could, no. at ] [

could. It stage, But no. being told this you're at

sitting staying from -- the U.S.? experience, to planning with I you've say workforce Okay. Maybe I just of out well and to just it's the the your but underground, on on other Curragh, got know the good underground bring Are the side all world. they're you too. mean all

how Curragh So intention? that would the Or the that you -- underground? do to get you actually from experience Australia's is cross-pollinate to U.S.

Two room in Jeff actually us with got today. things. We've the

the over our moment. on So parts been of with in we've us at already the a SMEs, year project this experts working U.S., for having our

got fully some we're us moment project. will Yes, the established, into to mobilization So people manned have there for Australia be skills support out. within into of those size of project that's business. skills starting are nature. the tapping across to team the a of the we fully start the best start-up moving And the But the this a in right with the at skills that we're we've

to I X the first phase up said, in As miners. ramping continuous we're

So looking size we're large, is available. the of and planned see part the workforce pool but a our of skills in can phase, ramp-up the we that's for or

then do to Okay. just in percentage-wise? wage like sort you what of rise rates give you put the And have That's through, great.

it's and agreement, that X, to X, managed X, we've X, workforce. X-year a with It's a our achieve

that? sorry, then fall safeguard just under mechanism, Curragh And Okay. does

we Yes, do.

up -- I Any Any from COX. end because heavy do think cost you the thoughts that? ] sort What's with it's emitter ideas? think of you'll quite of on impost a [

-- Yes, working probably it. it's there And Glyn. also at are than more here moment, it's XXX% clear some yet, the here signs, positive weeks not but X yet, not but on It's not positive ago.

on delivering our of results out that. mines units great operations utilized And underground really our U.S. are VAM and

gas a mined and cut be the program tapping that we've gas as using resource. From would within we've plan would where that, come we're in learnings that the an it business. valuable that proven open mining seams to methods, cut drilling the into the by that and and of open the will technology be for underground got coal our advance So mining the pilot bear perspective,

we've So been not idle.

progressing will help this the progressed. been through While systems, that been mitigate government has we've well and worked the projects impact

Gerhard's just response. listening to So

like an originally it changes thought... down and So be may impasse, is as government of the perhaps won't pipe, it given some impasse sounds but be will what as coming be doing the great the

-- not it splitting like That's and looks they're cut. why underground open the

So the could undergrounds are open therefore, now it level a the at same as cuts. lot better. look And

-- to So again, guidance at on early but too this point, give this.

Correct.

then final And Okay. one question. just

process, Just I you much, can't say looking know the tent BMA the too sales but at are you in still assets? BMA's the

unfortunately, can't -- we comment. [indiscernible] just

comes Your next question Paul Goldman Young from Sachs. from

that few a met achieve had actually the the the coal in is on between pricing there X. that market? met market, price a And done? when to you for bit how in sold much arbitrage the What more Or did volume know I is and sales specifically thermal had that coal go? more I coal from of coal thermal questions little on we realized you market mix.

switching happening we're finished. year. No, anymore. no. is I switching That's there not this no Listen, mean

So that more end finished think I X. year. nothing at all switching quarter Certainly, of in last

domestic realization, was, the -- sales if and sales details, X, quarter bit look well. little impacted If impacted well, FOR you a bit impacted exceptionally you U.S. more X, the price in in at the by -- it's look In it's by a at it's quarter little it

about talk for pretty with up Yes, for year? Or with steel still you that mean, U.S. next profitability understood. when market steel pretty do tight, still to the good but seems early it is on And be met I market mills. still is U.S. it to just mills initial a U.S. your think U.S. coal might little U.S. early -- for discussions you too down, production prices the a where start steel bit, okay, tight. you little for I stepping is do discussions too pretty steel then negotiations be bit just mean yet?

early. bit A little too

the the discussions try game, they September. started these little U.S. it's Usually, in to think a too knock bit, but early. I door at

but -- a few but little little bit a I month, think bit the are at -- are nothing yet. X more we a some knocking concrete door, maybe people off,

Yes.

And costs. just on last Okay. just question,

labor the about You like sort of just been rail labor strip [ ] rail are all, rates of piece, what in and availability mentioned port? how cost and there, touched -- then in both that before on the on looking trajectory also, on the has and horizon? productivity But second first for bone we the just transportation with just And and -- half ratios.

Don't Yes. think handy. line improved profoundly rates have second the the I the But in look, has quarter. Blackwater

So quarter, April issues but we as has in well, first had improved. absolutely, dragged performance that into the probably

all not not impacted any are by we at or too So moment. -- at impacted by issues transportation the

There time. hand further I questions back remarks. are any for will now at no closing this Douglas to

Investor participating any just everybody Relations for today. I'd you've our Well, And please to like if thank contact got follow-up questions, don't team. to hesitate

That everyone Thank does today. in call for you for conclude participating our participating. the today. conference to for you Thank

disconnect. now may You