Whitehaven Coal Limited · ASX:WHC
Whitehaven Coal — H1 FY2013 Earnings Presentation
28 slides from Whitehaven Coal's earnings presentation, Feb 26, 2013
Slide 1: Whitehaven Coal Limited Half Year FY 2013 Results
Whitehaven Coal Limited Half Year FY 2013 Results Sydney, Australia 26 February 2013
Slide 2: Disclaimer
Disclaimer Statements contained in this material, particularly those regarding the possible or assumed future performance, costs, dividends, returns, production levels or rates, prices, reserves, potential growth of Whitehaven Coal Limited, industry growth or other trend projections and any estimate
Slide 3: First half FY 2013 - Overview
First half FY 2013 - Overview Financial results continue to be affected by weak coal prices and strong $A. Underlying EBITDA in line with guidance provided at quarterly, with overall EBITDA lower due to accounting treatment of closure costs at Sunnyside. Business remains well located on cost c
Slide 4: First half financial overview - FY 2013
First half financial overview - FY 2013 Underlying EBITDA profit (excluding significant items) of $8.2 million, in line with guidance provided in December quarterly. Overall EBITDA loss of $18.6 million; includes accounting losses associated with Sunnyside mine and Brisbane office closures and o
Slide 5: First half financial overview - FY 2013
First half financial overview - FY 2013 Underlying NPAT (excluding Significant Items) of $27.6 million loss, down from $22.0 million profit in the first half of FY 2012. Directors resolved not to pay an interim dividend for the half. Cash used in operations of $100.5 million. Net cash outflo
Slide 6: Reconciliation of NPAT to Operating EBITDA
Reconciliation of NPAT to Operating EBITDA A$ millions H1 - FY 2013 H1 - FY 2012 Movement % Net profit/(loss) for the period attributable to members (47.0) 19.9 -337% Add back: Significant items after tax (1) 19.5 2.1 808% Net profit/(loss) before significant items (27.6) 22.0 -225% Profit/(loss) be
Slide 7: Significant Items
Significant Items A$ millions H1 - FY 2013 H1 - FY 2012 Included within the balances presented on the face of the Consolidated Interim Statement of Comprehensive Income: Operating Expenses: Suspension of mining activities and office closures (22.9) - Other expenses: Share-based payment expense (2.4)
Slide 8: First half operating highlights - FY 2013
First half operating highlights - FY 2013 Saleable coal production increased: 47% to 3.625 Mt (100% managed basis) 38% to 2.982 Mt (equity basis) Total coal sales up, with less coal purchased to meet legacy contracts: up 19% to 3.924 Mt (100% managed basis) up 11% to 3.325 Mt (equity sha
Slide 9: First half operating highlights - FY 2013
First half operating highlights - FY 2013 Second phase of business review currently underway with the objective of increasing efficiency and reducing costs in both the open cut mines and the Narrabri underground mine. Subsequent to balance date, Whitehaven has received: Approval from the State
Slide 10: First half coal sales – FY 2013
First half coal sales – FY 2013 Equity Basis – 000t H1 - FY 2013 H1 - FY 2012 Movement % Gunnedah Operations 1,766 2,069 -15% Werris Creek 718 830 -14% Narrabri 841 98 754% Whitehaven Total 3,325 1 2,997 11% 100% Basis – 000t H1 - FY 2013 H1 - FY 2012 Movement % Gunnedah Operations 2,005 2,318 -13%
Slide 11: First half saleable coal production – FY 2013
First half saleable coal production – FY 2013 Equity Basis – 000t H1 - FY 2013 H1 - FY 2012 Movement % Gunnedah Operations 1,328 1,251 6% Werris Creek 725 777 -7% Narrabri 929 127 631% Whitehaven Total 2,982 2,155 38% 100% Basis – 000t H1 - FY 2013 H1 - FY 2012 Movement % Gunnedah Operations 1,573 1
Slide 12: First half profitability – FY 2013
First half profitability – FY 2013 Reported Financial Performance - A$ millions H1 - FY 2013 H1 - FY 2012 Revenue 280.8 340.4 NPAT/(Loss) before Significant Items (27.6) 22.0 NPAT/(Loss) (47.0) 19.9 Earnings per share (cents per share - diluted) (4.8) 4.0 Interim dividend (cents per share - fully fr
Slide 13: First half cost of sales
First half cost of sales H1 - FY 2013 H1 - FY 2012 H2 - FY 2012 FY 2012 Coal Sales - (equity basis, excl. purchased coal) '000t 2,639 2,166 2,123 4,289 Average revenue - (excl. purchased coal & net of $A/t 81.55 (1) 104.06 105.06 104.55 NSW royalties) Average cash cost of sales (excludes significant
Slide 14: First half cash flow – FY 2013
First half cash flow – FY 2013 A$ millions H1 - FY 2013 H1 - FY 2012 EBITDA from own coal sales 6.8 86.7 Cash impact of significant items in operating cashflows (4.8) (28.8) Movement in working capital1 (102.0) (90.2) Cash used in operations (100.0) (32.3) Interest and tax payments (13.7) (21.6) Net
Slide 15: 31 December financial position
31 December financial position A$ millions December 31 - 2012 June 30 - 2012 Cash 83.2 513.6 Current receivables 110.1 70.2 Other current assets 163.6 158.3 Current assets 356.9 742.1 Non-current receivables 38.7 11.1 Other non-current assets 3,673.4 3,568.4 Total assets 4,069.0 4,321.6 Current paya
Slide 16: Half year capex – FY 2013
Half year capex – FY 2013 Capital Investment - $ million H1 - FY 2013 H1 - FY 2012 Tarrawonga 1 3.4 2.3 Werris Creek 16.7 6.6 Rocglen 0.2 0.3 Sunnyside 0.2 0.3 Gunnedah CHPP 3.0 1.6 Total Open-cuts 1 23.5 11.1 Narrabri (including capitalised development costs) 1 63.2 87.5 Maules Creek 1 28.3 - Rolli
Slide 17: First half revenue analysis
First half revenue analysis H1 FY 2013 SCOTA Non SCOTA SSCC/PCI Total Thermal Thermal Sales Tonnage (excluding purchased coal) kt 483 1,389 767 2,639 Sales Price per tonne (excluding purchased coal) $US/t 134.45 88.19 74.06 92.55 Sales Revenue (excluding purchased coal) (1) $US'm 64.97 122.47 56.80
Slide 18: Fixed price coal contracts and fixed FX status
Fixed price coal contracts and fixed FX status ► Whitehaven has a total FX fixed position of US$82.0m at an average exchange rate of 0.9984 US$:A$ as at 26 February 2013 Fixed Price and tonnage contracts (100%) FY2013 – 2H FY2014 TOTAL kt US$/t kt US$/t kt US$/t SSCC/PCI 330 108 - - 330 108 Thermal
Slide 19: Strong strategic position for the future
Strong strategic position for the future • Dominant position in the Gunnedah Basin. • Large base of JORC Resources and Reserves (refer 26th February ASX release). • Ability to produce a high proportion of SSCC/PCI if demand is strong. • High yields of saleable coal. • Competitive position on the FOB
Slide 20: Substantial near-term production growth from Narrabri
Substantial near-term production growth from Narrabri Maules Creek and Vickery to follow Saleable Production by Mine 25,000 24 20,000 18 15 000's tonnes 15,000 11 10,000 9 5 5,000 0 FY 2012 FY 2013 FY 2014 FY 2015 FY 2016 FY 2017 Tarrawonga Other WHC Werris Creek Narrabri Maules Creek Note: Data sho
Slide 21: Narrabri status
Narrabri status Current operations • LW system is operating at target capacity, but not yet consistent (30 Kt days, 130 Kt weeks). • Challenge now is enhancing operating practices to achieve consistent high production. • Gas drainage well ahead of development, currently no issues. • Roof caving well
Slide 22: Narrabri thermal coal moisture issue
Narrabri thermal coal moisture issue • Energy of product coal is affected by moisture and ash content. • Narrabri raw coal quality is as expected, inherent moisture of ~5% and ROM ash of ~11%. • Crushed ROM coal would achieve SCOTA thermal coal specification. • Narrabri mine is relatively dry, but m
Slide 23: Maules Creek status
Maules Creek status ► NSW State Government Project Approval received on 23rd October 2012. ► Federal approval under EPBC Act received on February 11th. ► There are a number of secondary NSW and Federal approvals required prior to commencing construction. Plans in support of these approvals are progr
Slide 24: Maules Creek one of the best global coal projects
Maules Creek one of the best global coal projects • Economics of Maules Creek are compelling: • Large reserve of high quality coal; • Competitive capital development costs; • Low life-of-mine stripping ratio of ~6.4 bcm per ROM tonne (~7.1 bcm/t saleable); • High yield (80-90%) of excellent quality
Slide 25: Infrastructure available to support planned growth
Infrastructure available to support planned growth Comments Port capacity and export coal sales (Mt, 100% basis)1 25,000 • Strategic 11% shareholding in 24 Newcastle Coal Infrastructure Group • Medium to longer term capacity gaps 20,000 to be secured by accessing surplus 18 capacity from other produ
Slide 26: Newcastle port capacity has grown rapidly
Newcastle port capacity has grown rapidly - Around 211 Mtpa port capacity by December 2013 - Shipments of ~150 Mt forecast for CY 2013 - New/expanded mines of ~65 Mtpa not on the horizon - Re-allocation of contracted capacity being progressed 100 100 40 40 66 32 32 32 30 30 30 30 PWCS NCIG T4 145 11
Slide 27: Demand growth and coal prices remain weak, but some pick-up in recent prices
Demand growth and coal prices remain weak, but some pick-up in recent prices • Competition in the seaborne thermal coal market remains strong. • Buyers are taking full advantage of soft markets with a spate of tenders and ongoing demands for reduced prices. • Recent NEWC thermal coal index price has
Slide 28: Whitehaven's response
Whitehaven’s response • Ongoing business review to increase efficiencies and reduce operating costs • Optimise short-medium term mine plans and deployment of equipment – including replacement of high-cost hire equipment • Productivity improvement and cost reduction opportunities, including overheads