Yancoal Australia Issued Performance Share Rights Under Its Equity Incentive Plan

Yancoal Australia Issued Performance Share Rights Under Its Equity Incentive Plan

Australia’s largest pure-play coal producer, Yancoal Australia Ltd (ASX: YAL) has recently reported strong results for FY 2018. For FY 2018, the company reported a profit after tax of A$852 million as compared to the profit of A$229 million in FY 2017. Further, the company reported revenue of A$4,850 Mn and achieved a total operating EBITDA of A$2,180 million in FY 2018.

In order to reward the eligible participants for the achievements of the company, Yancoal Australia has issued 1,744,704 performance share rights (STIP Rights) and 1,483,811 performance share rights (LTIP Rights) under its equity incentive plan to the executive director and certain senior executives of the Company, as announced on 4 March 2019. 

The STIP rights were issued at a nil issue price to the executive director and certain senior executives of the Company as part of the revised short-term incentive plan under the Equity Incentive Plan that is designed to reward Eligible Participants for the achievements of the Company, the business and the Eligible Participants’ individual goals that are aligned to the Company’s financial, operational and strategic priorities.

The STIP awards will be delivered in two components, with 50% of the award delivered as a cash payment around April 2019 and 50% of the award to be delivered in fully paid ordinary shares in the Company (“Shares”), which vests in equal parts over a two-year period i.e. 25% will vest on 1 March 2020, and the remaining 25% will vest on 1 March 2021, and at the discretion of the board of the Company. Eligible Participants may be permitted to settle any vested STIP Rights in Shares or a cash equivalent amount.

The STIP Rights have a nil exercise price and a vesting date of 1 March 2020 (first 25% tranche) and 1 March 2021 (second 25% tranche), respectively. Under the Long-Term Incentive Plan, the Company issued 1,483,811 LTIP Rights at a nil issue price to the Eligible Participants.

Recently, the company’s Board of Directors declared a final dividend totalling A$211 million and a special dividend of A$166 million, with a record date of 11 March 2019. The final dividend and special dividend will be paid on 30 April 2019. The total FY2018 dividend payments of A$507 million represent a payout ratio of ~60%, consisting of 40% of net profit after tax (A$341 million) and a 19.5% special dividend (A$166 million).

Now, let’s have a glance at the company’s stock performance and the return it has posted over the past few months. The stock is trading at a price of $4.05, down by 1.22% during the day’s trade with a market capitalisation of ~$5.41 billion as on 8 March 2019. The counter opened the day at $4.050 and reached the day’s low of $3.750 with a daily volume of ~ 48,900. The stock has provided a year till date return of 7.89% & also posted returns of -6.29%, 14.53% & 31.41% over the past six months, three & one-months period respectively. It had a 52-week high price of $5.598 and touched 52 weeks low of $2.520, with an average volume of ~19,431.


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