Rising Costs and Export Pressures Test Bathurst’s FY26 Profit Outlook

Financial Performance and Market Context

Bathurst Resources Limited has delivered a consolidated EBITDA of NZD 16 million for the first half of fiscal year 2026, aligning with its forecast and maintaining full-year guidance between NZD 35 million and NZD 45 million. This outcome comes despite a notable NZD 11 million decline compared to the same period last year, primarily driven by weaker export segment earnings and rising operational costs.

The company’s consolidated cash reserves remain robust at NZD 156 million, including restricted short-term deposits, providing a solid financial foundation amid ongoing market volatility. Export sales volumes increased by 187,000 tonnes compared to the prior period, recovering from disruptions caused by the Tawhai Tunnel closure in FY25. However, this volume growth was offset by a lower Hard Coking Coal (HCC) benchmark price and a shift in product mix, resulting in reduced average prices per tonne.

Operational Challenges and Cost Pressures

Bathurst faced several operational headwinds during the quarter, including adverse weather conditions that hampered overburden removal and production, particularly at the Stockton and Rotowaro mines. Labour and fuel costs escalated significantly, alongside increased contracting expenses necessary to meet production targets. These factors contributed to the EBITDA contraction despite higher sales volumes.

Domestically, the South Island segment experienced a decline in sales due to reduced agricultural demand and a customer shift towards alternative fuel sources. In contrast, the North Island operations progressed with intensive overburden removal and coal production aligned with budgeted sales volumes, although some delays in mining sequencing and operator training affected quarterly outputs.

Project Development Progress

Bathurst continues to advance its strategic growth projects. The Buller Plateaux Continuation Project (BPCP) in New Zealand is nearing submission of its Fast Track Approvals application, expected in March 2026. This project promises to extend mining operations by 15 years, leveraging existing infrastructure and delivering significant economic benefits to the Buller region.

In British Columbia, the 100% Bathurst-owned Tenas Project is progressing through regulatory approvals, with key environmental and First Nations consultations underway. An updated feasibility study released in October 2025 highlighted increased capital and operating costs, offset by higher coal price assumptions, reinforcing the project’s strong economic potential. Production is targeted to commence in fiscal year 2029, with an expected output of 750,000 tonnes per annum over 21 years.

Market Dynamics and Outlook

The HCC price showed a strong resurgence in FY26, climbing from USD 170 per tonne to over USD 218 by December 2025, driven by renewed demand from India and supply disruptions in Queensland caused by Cyclone Koji. The coal price surged further to USD 250 per tonne by late January 2026, although market analysts anticipate a potential price correction as supply normalises.

Bathurst’s management remains cautiously optimistic, balancing the benefits of improved pricing against ongoing cost pressures and operational challenges. The company’s commitment to maintaining its EBITDA guidance reflects confidence in its operational resilience and project pipeline.

Safety and Corporate Matters

Safety remains a priority, with seven lost time injuries reported during the quarter, predominantly musculoskeletal in nature. Bathurst has introduced a revised Injury and Illness Management Standard to enhance early reporting and treatment, aiming to reduce long-term impacts.

On the corporate front, litigation with Talley’s Group Limited continues in New Zealand’s High Court, with a substantive trial expected in mid to late 2027. The outcome remains uncertain but is closely watched by investors.