A solid result from SMR with lower than guidance costs driving a beat to Ebitda while SMR also announced a stronger than expected dividend. The key positive from the result was strong guidance for CY25, with better-than-expected volumes guidance across all assets and lower FOB costs and capital expenditure guided to. Net debt continues to decrease and with contingent payments now complete, we expect strong free cash flow from SMR and forecast it to return to a net cash position in the near-term, allowing it to increase capital returns to shareholders. We are bullish on the medium-term price outlook for coking coal and note that SMR has significant leverage to coal prices.
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