Fortress Minerals Limited · SGX:OAJ
Fortress Minerals — 2QFY2020 Earnings Presentation
27 slides from Fortress Minerals's earnings presentation, 2019
Slide 1: Fortress Minerals Limited 2QFY2020 Results Presentation
A LEADING MALAYSIAN HIGH-GRADE IRON ORE CONCENTRATE PRODUCER AND EXPORTER FORTRESS MINERALS LIMITED 2QFY2020 Results Presentation
Slide 2: Important Notice
IMPORTANT NOTICE: This presentation does not constitute, or form any part of any offer for sale or subscription of, or solicitation of any offer to buy or subscribe for, any securities in Fortress Minerals Limited (“Fortress Minerals” or the “Group”) in Singapore or any other jurisdiction nor shall
Slide 3: Business Introduction
7) " ‘i 19) 6 / vy BUSINESS INTRODUCTION
Slide 4: Company Profile
COMPANY PROFILE • We are an iron ore producer and exporter headquartered in Malaysia • Our principal business activities include exploration, mining, production and sale of iron ore concentrate • Currently producing high grade iron ore concentrate from East, Valley and West Deposits in Bukit Besi mi
Slide 5: Management Team
MANAGEMENT TEAM Dato’ Sri Ivan Chee Ng Mun Fey Fionne Chua • Responsible for overall • Responsible for the overall • Responsible for all finance and management and operations of the management and day-to-day accounting operations of the Group, including formulating, operations of the Bukit Besi Mine
Slide 6: Our Milestones
OUR MILESTONES Awarded mining rights to Bukit Besi Mine 2016 Magnetic survey and metallurgical testing Planning & design of mine infrastructure and processing plant Completed JORC drilling campaign on East, Valley & West Deposits Constructed mine infrastructure and processing plant with a
Slide 7: FY2020 Quarterly Milestones
Listed on the Catalist Board of SGX-ST in March 2019 1st Quarter First iron ore miner listed on SGX FY 2020 S$15.0 million gross proceeds raised Resource upgraded to 6.19 Mt at East, Valley & West Deposits. First interim dividend for FY2020 equal to the 12.1% profit of FY2019 2nd Quarter
Slide 8: Bukit Besi Mine Overview
7) " ‘i 19) 6 / vy — @’ BUKIT BES! MINE OVERVIEW
Slide 9: Bukit Besi Mine - Overview
BUKIT BESI MINE - OVERVIEW Mine Infrastructure Magnetite-pyrite skarn Tenement Boundaries North Location: Terengganu, Malaysia East West Valley Total Concession Area: 526.2ha open pit Nearby Airports: Airports in Kuantan and Kuala Terengganu (approximately 1.5 hours drive); Explored surface area wit
Slide 10: Mineral Resource – A Closer Look
MINERAL RESOURCE – A CLOSER LOOK RESOURCE SUMMARY: West, Valley and East Deposits are <5% of total Northconcession area (526.2 ha) 7 Aug 2018 28 Feb 2019 East Deposit Resource Area Category West Net Attributable to the Group Valley Tonnes Grade (Mt) (% Fe) West Indicated 0.37 42.20 0.34 41.44 West I
Slide 11: Bukit Besi Mine – Production Process
BUKIT BESI MINE – PRODUCTION PROCESS Removal of blasted material Step 1 Step 2 Blasting of the Removal and identified stockpiling of location blasted materials Rock surface after blasting Step 3 Step 4 Crushing Concentrate processing process The crushing plant Magnetic separator Grinding ball mills
Slide 12: Financial Highlights
7) " ‘i 19) 6 / vy FINANCIAL HIGHLIGHTS
Slide 13: Financial Snapshot
FINANCIAL SNAPSHOT Sales Volume (DMT) Revenue & Average Realised Selling Price DMT US$’M US$/DMT 250,000 223,859 25.0 105 20.6 ~34.1% of FY2019 20.0 103.29 102.95 100 200,000 +37.1% from 1QFY20 ~37.9% of FY2019 150,000 15.0 +34.5% from 1QFY20 95 100,000 ~24.8% of FY2019 10.0 ~28% of FY2019 7.8 90 76
Slide 14: 2Q FY2020 Financials – Operational Efficiency
2Q FY2020 FINANCIALS – OPERATIONAL EFFICIENCY US$/DMT 250.00 Operational Efficiency (In US$/DMT) 103.29 200.00 102.95 89.65 150.00 100.00 72.18 70.75 58.23 50.00 Realised Selling Price/DMT Gross Profit/DMT 40.63 32.99 25.28 Adjusted Net Profit/DMT (1) - FY2019 1QFY2020 2QFY2020 14 (1) Adjusted net p
Slide 15: Statement of Comprehensive Income for the Group
STATEMENT OF COMPREHENSIVE INCOME FOR THE GROUP Change US$'000 1H FY2020 1H FY2019 (%) Revenue 13,624 6,572 107.3 Gross profit 9,410 3,916 140.3 Gross profit margin 69.1% 59.6% 15.9 Other operating income 417 2,070 (79.9) Selling and distribution expenses (1,054) (2,306) (54.3) Other operating expen
Slide 16: Statement of Financial Position for the Group
STATEMENT OF FINANCIAL POSITION FOR THE GROUP US$'000 31 August 2019 28 February 2019 ASSETS Non-current assets Exploration & evaluation asset 1,525 403 Mining properties 6,529 6,973 Plant and equipment 12,929 11,366 Right-of-use assets 721 - Current assets Inventories 597 439 Trade receivables 1,47
Slide 17: Statement of Financial Position for the Group
STATEMENT OF FINANCIAL POSITION FOR THE GROUP US$'000 31 August 2019 28 February 2019 Non-current liabilities Deferred tax liabilities 1,191 505 Amounts due to shareholders 8,048 15,721 Borrowings 40 - Lease liabilities 542 - Current liabilities Borrowings 31 Lease liabilities 187 - Trade payables 9
Slide 18: Statement of Cash Flows for the Group
STATEMENT OF CASH FLOWS FOR THE GROUP US$'000 1H FY2020 1H FY2019 Net cash flow generated from operating activities 7,654 1,608 Net cash flow used in investing activities (3,939) (2,672) Net cash flow generated from financing activities 9,899 2,266 Net change in cash and cash equivalents 13,614 1,20
Slide 19: Use of IPO Proceeds – Status in 2QFY2020
USE OF IPO PROCEEDS – STATUS IN 2QFY2020 Aggregate amounts in SGD’000 • Further development of Bukit Besi Mine • Future exploration and geology work • Expansion of iron ore processing capacities 01 S$7.0 million • Acquisition/JV of new mines S$2.0 million 02 • General working capital 03 S$3.5 millio
Slide 20: Industry Overview
7) " ‘i 19) 6 / vy INDUSTRY OVERVIEW
Slide 21: Update on Iron Ore Prices
Update on Iron Ore Prices • Prices volatile during 2019 due to supply disruptions • Fortress, as a high-grade iron ore concentrate producer, enjoys niche position especially during supply disruptions Cyclone Veronica • High grade iron ore concentrate enjoys premium pricing. Source S&P Global Platts
Slide 22: Key Market Demand – Malaysia
INDUSTRY OVERVIEW Key Market Demand– Malaysia • Regional steel demand remain robust • Fortress revenue for last 2 quarters generated from two local steel mills in Malaysia: - 1Q FY2020 - 61,386 WMT (55,552 DMT) - 2Q FY2020 - 85,739 WMT (76,334 DMT) • Iron ore consumption of the two steel mills in ea
Slide 23: Key Market Demand – China
INDUSTRY OVERVIEW Key Market Demand – China • Ever tightening of pollution control continues to promote healthy demand of high-grade iron ore concentrate • Broad customer base and strong relations in China built by Fortress’ experienced team throughout the years • Fortress is well-positioned to ride
Slide 24: Competitive Advantage
COMPETITIVE ADVANTAGE Key contributing factors to our High grade Iron ore concentrate competitiveness Low levels of impurities which Favourable geological conditions Strategic Location, would command premium prices and cost advantage against lower grades High Grade Iron Good Infrastructure,
Slide 25: Share Statistics
SHARE STATISTICS Bloomberg SGX: OAJ Code: FMIL SP Share Price ~S$0.21 Market Capitalization ~105M Free Float 327.5M P/E ratio 13 times Dividend yield 0.76% NAV Per Share 5.54 US Cents Shares 500M Outstanding Substantial Periods At IPO 1QFY2020 2QFY2020 Now Net increase Shareholders Management 50.25%
Slide 26: Price Trend
PRICE TREND Source: Bloomberg Data 26
Slide 27: Thank You!
THANK YOU! Registered Office: 8 Robinson Road #03-00 ASO Building Singapore 048544 Principal Place of Business: 9-1 Jalan PJS 8/18 Dataran Mentari 46150 Petaling Jaya Selangor, Malaysia Tele: +60 (3) 56301993 Email: corporate@fortress.sg Website: www.fortress.sg