2021 Annual Report

Nova’s underlying EBITDA was higher on the previous year, primarily due to the higher revenue from stronger base metal prices and higher payabilities on metal sold. Tropicana’s underlying EBITDA was lower compared to the previous year primarily due to lower mined and milled grades, together with its divestment earlier in the year on 31 May 2021. Exploration and evaluation expenditure decreased by 11% mainly due to lower corporate development expenditure with costs relating to the acquisition of the Company’s 49% interest in the Lithium JV with Tianqi recorded as acquisition costs. Corporate expenditure was up slightly compared to FY20 due to higher group insurance premiums, an increased investment in the Company’s graduate recruitment and training program and higher IT systems costs. The Company’s corporate giving spend was also higher compared to the prior year, driven by additional payments to the Dundas Shire and Esperance Shire for bushfire and Covid-19 relief. Lastly, the investment revaluation of A$10.0 million recognises mark-to- market gains on listed investments. Net profit after tax (NPAT) for the year was A$548.7 million, compared to A$155.1 million in the previous financial year. This included the recognition of a gain on the sale of Tropicana after income tax of A$384.8 million (A$556.8 million before tax). NPAT for the group excluding the gain on the sale of Tropicana was A$163.8 million. The year-on-year variance in NPAT is detailed in the chart below. Depreciation and amortisation expense of A$227.3 million (FY20: A$243.6 million) was lower than the prior year driven by lower amortisation of mine properties following lower reserve depletion for FY21 and the divestment of Tropicana on 31 May 2021. Net finance costs of A$24.2 million relate to loan establishment and commitment fees incurred during the year, which includes A$17.7 million of establishment fees for the new financing facilities entered into during the year. From a cash flow perspective, cash flows from operating activities for the Group were A$446.1 million, compared to the FY20 year of A$397.5 million, predominantly due to stronger base metal prices positively impacting product revenue. NPAT VARIANCE FY21 VS FY20 A$M Exploration & evaluation expense NPAT FY20 Sales volume variance Price Variance Costs of Production variance Corporate D&A MTM of investments Gain on sale of Assets Impairment of exploration Net finance costs Income tax expense NPAT FY21 0 700 200 100 800 600 500 400 300 549 (168) (25) 1 553 (23) 8 16 (2) 4 113 (84) 155 Below is a reconciliation of Underlying EBITDA to NPAT for FY21. A$M Underlying EBITDA Net finance costs Depreciation & amortisation Acquisition & transaction costs Forex gains on Tianqi transaction Gain on sale of Tropicana Income tax expense Net profit after tax 0 700 200 100 600 500 400 300 800 900 1,000 549 (232) 557 (227) (24) 475 5 (5) IGO ANNUAL REPORT 2021— 41