New Hope Corporation Limited · ASX:NHC
New Hope — Shareholder Meeting (November 2019)
47 slides from New Hope's shareholder meeting presentation, Nov 19, 2019
Slide 1: Annual General Meeting
NEW HOPE GROUP ANNUAL GENERAL MEETING ROBERT MILLNER, SHANE STEPHAN & ANDREW BOYD wey tope comoraton unites (ASX code: NHC) newhopegroup.com.au
Slide 2: Group & Financial Overview
GROUP & FINANCIAL OVERVIEW Robert Millner, Chairman
Slide 3: FY2019 key results
Cash generated from ops Profit after income tax (before interest, tax and Total tonnes sold (before non regular items) acquisition costs) $268M $510M 10.9M ▲23% from 2018 ▲3% from 2018 ▲17% from 2018 State Government EBITDA Full year dividend Certified Rehabilitated (before non regular items) Land $
Slide 4: Profit before tax by segment
$m 250.0 239.0 197.0 200.0 182.0 172.0 150.0 100.0 50.0 15.0 - (7.3) (19.0) (21.0) (50.0) Coal mining Coal mining Other Treasury QLD NSW 2019 2018 Please refer to Appendix for reconciliation of Non IFRS Financial Information 4 ANNUAL GENERAL MEETING | 19 NOVEMBER 2019
Slide 5: EBITDA bridge 2018 to 2019
$m 530 110.9 10.0 500 470 50.2 4.7 28.0 14.5 440 9.0 517.1 410 465.5 380 350 Actuals QLD Revenue QLD rehabilitation QLD mining NSW Revenue NSW Costs NSW acquisition Treasury and Actuals 31 July 2018 Volume movements other AUD Price R&M / Other 40% other 31 July 2019 Please refer to Appendix for reco
Slide 6: Dividends paid over 15 years
• Over the previous 15 years $1.62 in special dividends • Ordinary dividends of $1.25 • Total dividends paid $2.88 All dividends paid have been fully franked at 30% 6 ANNUAL GENERAL MEETING | 19 NOVEMBER 2019
Slide 7: Market Overview
ae | \sa LLL TTT SE MARKET OVERVIEW Shane Stephan, Managing Director
Slide 8: Australian trade in goods and services
A$ Billion ABS Cat No. 5368 International Trade in Goods and Services 8 ANNUAL GENERAL MEETING | 19 NOVEMBER 2019
Slide 9: Coal imports by country
25000 20000 15000 10000 5000 0 Japan China India South Korea Taiwan Netherlands Malaysia Vietnam Metallurgical Thermal Department of Industry, Innovation and Science; Resources and Energy Quarterly – September 2019 9 ANNUAL GENERAL MEETING | 19 NOVEMBER 2019
Slide 10: Coal quality demand in Asia
ASH <15% SULPHUR <0.6% • Traditionally Japan has demanded the highest quality ENERGY >6000 kcal/kg GAR coal in the world due to ash disposal costs, and a drive to clean-up industry in the 1970’s High JAPAN • Taiwan is now seeking lower ash, higher energy coals for environmental reasons 140Mtpa KOREA
Slide 11: Diversified revenue base
Group Coal Revenue by Country • Diversified revenue base – lowering market risk • Over 70% of revenue derived from stable, developed 4% economies looking for higher quality coals 8% 1% • Growth markets being pursued but not at the expense of 0% quality of revenue 8% • Vietnam and India will become i
Slide 12: Bengalla joint venture and Taipower
• First Bengalla Joint Venture meeting in Taiwan last month – will become annual event • New Hope Group 80%, Taipower 20% Bengalla • Taipower, one of Bengalla’s founding participants, Bengalla’s first customer late 1998 and our largest customer – 1.2Mtpa • Visited Taichung Power Station 5.5GWatts –
Slide 13: Coal power generation efficiency
Generation Efficiency Advanced USC 65% Thermal Efficiency: 46% CO2: 710g/kWh 60% 55% IGFC (Integrated coal Gasification Fuel 50% IGCC (Air-blown) Cell combined cycle) Advanced Turbine 45% (1700 degrees Celsius) Thermal efficiency: 55% CO2: 590g/kWh 40% Integrated coal Gasification Combined Cycle (IG
Slide 14: Thermal coal import growth
• Thermal coal imports to Vietnam and Pakistan have been growing strongly • USA, Columbia and South Africa have suffered cuts to thermal coal exports as reliant upon European market • Russia and Australia increasing exports of higher energy coal whilst Indonesia continues to increase supply of lower
Slide 15: CRU Data
CRU Data 15 ANNUAL GENERAL MEETING | 19 NOVEMBER 2019
Slide 16: CRU Thermal Coal Market Outlook
CRU Thermal Coal Market Outlook - July 2019 16 ANNUAL GENERAL MEETING | 19 NOVEMBER 2019
Slide 17: globalCOAL
globalCOAL 17 ANNUAL GENERAL MEETING | 19 NOVEMBER 2019
Slide 18: Quarter ended 31 October results
Quarter Ended 31 October 2020 2019 Variance (%) Saleable coal production 000t 3,328 2,002 66% Total Coal Sales 000t 3,343 2,066 62% QBH Export Throughput 000t 1,466 1,672 (12%) Oil Production bbls 95,563 95,095 - Revenue A$000 327,340 286,737 14% EBITDA A$000 102,466 127,302 (20%) Net profit before
Slide 19: Operational Performance
OPERATIONAL PERFORMANCE Andrew Boyd, Chief Operating Officer
Slide 20: Bengalla included from December 2018
^ Bengalla included from 1 December 2018 20 ANNUAL GENERAL MEETING | 19 NOVEMBER 2019
Slide 21: Coal production and sales volumes
New Acland Coal sale volumes 4.1Mt ▼8% from 2018 EXPORT Total tonnes produced 10.6Mt Jeebropilly ▲23% from 2018 0.7Mt 10.9Mt In line with 2018 ▲21% from 2018 DOMESTIC Bengalla (80%*) 6.0Mt 0.3Mt ▲ 5% from 2018 ▲60% from 2018 * New Hope’s equity share increased from 40% to 70% on 1 December 2018 and
Slide 22: Bengalla performance
• New Hope share of saleable coal production 6.0Mt • Profit before income tax and non regular items of $239.1 million • Cash contribution since 1 March 2016 $631.1 million (before tax) • Continued focus on operational efficiency • The Company acquired an additional 40% interest in the Bengalla Joint
Slide 23: Bengalla integration
• A major focus during the second half of 2019 has been the integration of Bengalla into the New Hope business • Key activities have been focused on marketing, finance, human resources, procurement and systems with a range of support functions now provided to site from New Hope’s corporate center •
Slide 24: Bengalla sales and cost management
• New Hope’s share of Bengalla sales has increased materially through both increased ownership and incremental expansion • Since New Hope gained management control in December 2018 there has been a strong focus on cost management across the operation • Recent cost increases have been arrested with c
Slide 25: New Acland production reduced
• Production and employment levels were reduced on 1 November 2019 due to inaction from Government on approvals, 150 direct jobs lost • Roster changes came into effect on November 1 with most operations moving to day shift only • 4.1mt coal produced, 8% less than previous year • Production levels fo
Slide 26: New Acland Stage 3 court outcome
• Environmental Authority granted March 2019 • Court of Appeal ruled in favour of New Hope in September 2019 • The Court of Appeal dismissed Oakey Coal Action Alliance’s Appeal and granted orders requested by New Acland Coal Pty Ltd • There is no further barrier to the Queensland Government now givi
Slide 27: Stage 3 start-up plans
• Subject to the Queensland Government granting the necessary approvals we expect to be in a positon to commence Stage 3 operations during the first quarter of 2020 • Initial works will focus on gaining access to the Manning Vale East and Willaroo Pit areas which require minimal additional infrastru
Slide 28: Jeebropilly finishing well
• FY2019 focus has been on Finishing Well and leaving a positive legacy in the region • Jeebropilly Mine last coal expected before end of calendar 2019 • Rehabilitation works being undertaken at New Oakleigh East • Continued maintenance of rehabilitated New Oakleigh West and Chuwar sites • Options f
Slide 29: Jeebropilly future land use
• Due to its scale and location next to the Amberley Airforce base and major road infrastructure the Jeebropilly site is valuable for commercial and industrial land uses • Ultimately the community benefits from the proposed final landforms 29 ANNUAL GENERAL MEETING | 19 NOVEMBER 2019
Slide 30: Queensland Bulk Handling terminal
• Excellent safety record with over 7 years worked without a lost time injury • Strong environmental performance achieved through extensive dust monitoring and water management practices • One of Australia’s most efficient coal terminals • Coal through put in FY2019 was 6.7 million tonnes • Operatin
Slide 31: Rehabilitation and agriculture
• 349ha of progressive rehabilitated land certified by the Queensland State Government • 180ha of rehabilitated mined land handed over to pastoral operations • Pasture management strategy, including use of rehabilitated land for grazing is ongoing • Continued to build size and quality of breeding he
Slide 32: Oil operations and exploration
• The drilling of five development wells (three successful and on production) • Production optimisation from well workovers resulting in increased production • Progressing feasibility studies for the enhanced oil recovery project at the Moonie field in the Surat Basin • Successfully de-risking our e
Slide 33: Community support
• Bengalla allocated 8 tertiary undergraduate scholarships, helping Bengalla supporting Aboriginal education through a partnership local students secure tertiary education with the Graham (Polly) Farmer Foundation • Bengalla Mining Company continued as the leading Industry Partner in the support, se
Slide 34: Bengalla supporting firefighters
• Bengalla supports employees who are members of the Aberdeen FRNSW to fight recent bushfires • Six of the crew, Captain Derek Wicks, Ryan King, Shane Hasselmann, Kristy Orlowsky, Jack Duckar and Matt Thomspon are employed full time by Bengalla • The Aberdeen FRNSW leader said “It’s just something s
Slide 35: Projects & Outlook
PROJECTS & OUTLOOK Shane Stephan, Managing Director
Slide 36: Lenton Joint Venture
• Combined project including former Burton Mine and New Hope’s neighbouring Lenton Project • Formosa Plastics are the 10% participant • 90% joint venture participant • Even split of coking / thermal coal • 412 million tonne resource* • Planned ~1.5 million tonne per annum for approximately 16 years
Slide 37: Surat Basin thermal coal projects
• 1 billion tonnes of thermal coal resource* • Four project areas - Elimatta, Collingwood, Taroom and Woori • To meet anticipated market demand from mid 2020s • Pre-Feasibility Study nearing completion • Elimatta Project has completed all statutory requirements towards the grant of a Mining Lease •
Slide 38: Positioned to meet Asian energy demand
New Hope is well positioned to meet the growing energy demands of its Asian customers Coal operations Projects and development Growing Developing Lenton Joint Obtaining approvals to meet Improving safety performance production levels Venture Burton Mine future demand Bengalla Growth / Efficiency Sec
Slide 39: Priorities for the year ahead
1. Continued Focus on Safe Production including establishment of critical risk framework and behavioural safety program 2. Gain full approval for the New Acland Stage 3 project and commence mining and construction activities in Stage 3 3. Implement efficiency initiatives at Bengalla and evaluate inc
Slide 40: Proxy voting results
Resolution 1 - Remuneration Report Proxies in favour of FOR AGAINST OPEN TOTAL ABSTAIN Chairman 628,212,506 59,253,666 1,422,875 688,889,047 1,093,847 Other Attendees 521,771 55,985 452,538 1,030,294 8,660 Total 628,734,277 59,309,651 1,875,413 689,919,341 1,102,507 % Issued Capital 75.60% 7.13% 0.2
Slide 41: Disclaimer
Disclaimer IMPORTANT: The information in this document has been provided to you for information only by New Hope Corporation Limited (“NHC”) and is subject to change without notice. Nothing contained in this document constitutes investment, legal, tax or other advice. The information in this documen
Slide 42: Appendices
APPENDICES
Slide 43: EBITDA reconciliation
Year Ended 31 July (A$ millions) *Restated Variance (%) 2019 2018 Profit after tax 210.6 149.5 41% Income tax expense (97.4) (64.3) 51% Profit before income tax 308.0 213.8 44% Non regular items before tax (76.3) (159.4) (52%) Profit before income tax and non regular items 384.3 373.2 3% Interest ex
Slide 44: Profit after tax reconciliation
Year Ended 31 July (A$ millions) *Restated 2019 2018 Profit after tax before non regular items 268.5 261.2 Insurance proceeds from ship-loader 1.7 - Gain / (loss) on discontinued operation 0.2 (37.8) Onerous contract and related expenses (19.7) (10.5) Acquisition costs expensed (33.4) - Establishmen
Slide 45: Segment reconciliation 2019
(A$ million) Coal Mining QLD Coal Mining NSW Other Treasury Total Year Ended 31 July 2019 Profit / (loss) before tax from continuing operations after non 169.2 191.4 (41.0) (11.7) 307.8 regular items Non regular items before tax: Insurance proceeds from ship-loader 2.4 - - - 2.4 Onerous contract and
Slide 46: Segment reconciliation 2018
Year Ended 31 July 2018 Coal Mining QLD Coal Mining NSW Other Treasury Total Profit / (loss) before tax from continuing operations after non 196.5 181.9 (126.1) 15.3 267.6 regular items Non regular items before tax Impairment of coal exploration and evaluation assets - - (91.5) - (91.5) Reversal of
Slide 47: Earnings per share reconciliation
Year Ended 31 July (cents per share) Restated* 2019 2018 Basic earnings per share (cents) (before non regular items) 32.3 31.5 Insurance proceeds from ship-loader 0.2 - Gain / (loss) from discontinued operations - (4.6) Onerous contract and related expenses (2.4) (1.3) Acquisition costs expensed (4.