Working cap unwind helps gearing, FY18costs higher on capex and currency    NCM has reported full year underlying EBITDA of US$1.41bn, within 1% of DB& market expectations. NCM also reported underlying NPAT of US$394m (3%lower than DB) and a final dividend of US7.5cps (70% franked). The balancesheet has benefitted from a US$250m swing in working capital, leading togearing of just 17%. Looking forward, FY18guidance of 2.4-2.7Moz looks fine,but cost guidance implies a step up in AISC to US$850/oz, 8% higher than lastyear. This is due to higher capex but also a 0.80AUD assumption. We forecastUS$795/oz AISC using 0.73AUD, but if we run 0.80AUD we are in line withguidance. NCM remains well placed but fairly valued; Hold.    P&L as expected, working cap helps cash flow, new dividend policy    NCM has reported full year underlying EBITDA of US$1.41bn, in line with ourexpectations. Free cash flow was ahead of our forecasts due to i) US$50mlower cash tax and ii) a US$250m working capital movement, which we expectwill revert next half. NCM has ended FY17with US$1.5bn net debt and 17%gearing, a stark contrast to the 34% gearing level only three years ago. NCMhas also announced a new dividend policy, linking shareholder returns to freecash flow; going forward, NCM’s total dividend payout will be 10-30% of freecash flow, with a minimum of 15cps per year. This policy gives shareholderssome certainty and allows NCM to withhold capital when investing, but sets anFY18dividend of 15-25cps, which is still only around 1% dividend yield.    FY18guidance hints at higher capital spend    NCM has provided FY18guidance for the first time, forecasting 2.4-2.7Moz &80-90kt copper for the full year, in line with our forecasts. Importantly, Cadiaguidance has increased 4% to 680-780koz. Costs on the other hand are aboveexpectations, with the midpoint of guidance implying around US$850/oz AISCin FY18. This is 8% higher than FY17(US$787/oz) and above our previousforecasts due to higher sustaining capital (US$270-330m vs. our US$250massumption) and a 0.80AUD assumption (above spot AUD). We assume 0.73AUD for FY18which reduces our Group AISC by around US$45/oz.    Cadia risk subsiding, FY18guidance upgraded    NCM has upgraded Cadia FY18production guidance to 680-780koz andreiterated that both PC1and PC2can be back to previous operating rates(15Mtpa for PC1, 8Mtpa for PC2) by the March Q. NCM is still yet to reinterpretthe PC2cave shape and define the air gap; until this happens, extraction ratescan’t increase but we are comfortable that full year guidance is achievable.    A$19.00/sh PT (unch.); FY18downgrades due to costs/capex; maintain Hold    Our price target is set broadly in line with our DCF valuation which is 1% lowerdue to higher costs in FY18. Our spot NPV is $17.62/sh. Upside/downside risksinclude operational performance, cash costs, gold/copper prices.

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