Salungano Group Limited · JSE:SLG
Salungano — FY2022 Earnings Presentation
25 slides from Salungano's earnings presentation, March 2022
Slide 1: Results Presentation
Results Presentation For the year ended 31 March 2022
Slide 2: Disclaimer
Ref Title Slide Disclaimer This presentation is published solely for informational purposes and does not constitute investment, legal, tax or other advice nor is it to 1 Overview 3 be relied upon in making an investment decision. Information contained herein has been taken from sources considered by
Slide 3: FY22 Operational and Financial Overview
FY22 OPERATIONAL AND FINANCIAL OVERVIEW COAL MINED COAL SALES* REVENUE EBITDA** 8.2Mt 7.6Mt R5.1 billion R646 million (FY21: 7.7Mt) (FY21: 6.9Mt) (FY21: R3.9 billion) (FY21: R569 million) NET LOSS CASH GENERATED NET DEBT CAPEX R37 million R672 million R706 million R150 million (FY21: R36 million los
Slide 4: Operating in a Changing Market
OPERATING IN A CHANGING MARKET • Workplace measures remain strictly adhered to COVID-19 • A full return to work has been adopted for all staff within the Group • 100% recovery rate and no work stoppages linked to COVID-19 • Reduced coal demand from Eskom LOCAL COAL MARKET • The last quarter saw an u
Slide 5: Mining Segment
MINING SEGMENT SIF Salungano GROUP
Slide 6: Health and Safety
HEALTH AND SAFETY Lost Time Injury (LTI) Performance Total Recordable Injury Frequency Rate (TRIFR) Performance 2.5 1.40 1.3 1.18 1.25 2 2 2 1.20 1.1 2 1.02 1.00 1.5 0.72 0.80 0.77 0.76 0.78 0.80 0.73 0.74 0.74 0.68 0.70 0.71 1 1 1 1 0.62 0.62 0.62 0.63 0.63 1 0.60 0.37 0.34 0.5 0.40 0.3 0.23 0.29 0
Slide 7: Vanggatfontein
VANGGATFONTEIN ROM Production and Sales (Kt) Factors impacting production • VGF placed on care and maintenance in March 2022 333 335 • Higher than historical average rainfall 314 313 289 289 • Eskom stoppages impacted sales 283 272 255 Key focus areas 222 • Resuming mining after care and 199 198197
Slide 8: Elandspruit
ELANDSPRUIT ROM Production and Sales (Kt) Factors impacting production • Machine availability 287 289 • Higher than historical normal average 243 rainfall 240 231 224 210 217 207 186 193 179174 182 188 179 Key focus areas 174 173 170 163 153 • Improve machine availability 134 120 • Eskom CSA extensi
Slide 9: Khanyisa
KHANYISA ROM Production and Sales (Kt) Factors impacting production • Space constraints mining the boundary 138 127 • Higher than historical normal average 121 rainfall 103 106 100 96 95 97 92 89 89 83 80 79 67 Key focus areas 65 61 55 • Mining closer to TFR pipeline 41 37 • Cost management and stri
Slide 10: Moabsvelden
MOABSVELDEN ROM Production and Sales (Kt) 472 Factors impacting production 429 431 436 • Space constraints mining the box cut 400 407 area 378 • Higher than historical normal average 339 rainfall 247 243 232 221 219 220 Key focus areas 195 169 173 175 172 • Decoupling the pit to minimize box cut 154
Slide 11: Mining Segment ROM and Sales Performance
MINING SEGMENT ROM AND SALES PERFORMANCE ROM Production (Kt) Mining Sales (Kt) 11
Slide 12: Trading Segment
TRADING SEGMENT SIF Salungano GROUP
Slide 13: Overview
OVERVIEW • Early retirement of Michael Richard Berry as the Chief Executive Officer and a director of Wescoal Trading Proprietary Limited, and Mr Thivhafuni Tshithavhane was appointed to act as Chief Executive Officer of Wescoal Trading • No reportable HSEC incidents • Major customer increased coal
Slide 14: Volumes and Revenue Performance Trend
VOLUMES AND REVENUE PERFORMANCE TREND Volumes – Kt Revenue – Rm 181 157 148 131 210 186 158 153 FY22 Q1 FY22 Q2 FY22 Q3 FY22 Q4 FY22 Q1 FY22 Q2 FY22 Q3 FY22 Q4 ▪ Sales volumes for FY22 increased by 15% to 617Kt (FY21: 537Kt) excluding intercompany sales on exports (FY21: 131Kt). Sales volumes increa
Slide 15: Financials
FINANCIALS SIF Salungano GROUP
Slide 16: Financial Salient Features
FINANCIAL SALIENT FEATURES REVENUE GROSS PROFIT R 5.1 billion R551 million • Higher revenue due to Moabsvelden (FY21: R3.9 billion) (FY21: R411 million) ramp-up • Gross profit margin at 10.7% (FY21: EBITDA CASH GENERATED R646 million R672 million 10.5% (FY21: R569 million) (FY21: R773 million) • Red
Slide 17: Statement of Comprehensive Income – Extracts
STATEMENT OF COMPREHENSIVE INCOME – EXTRACTS FY22 FY21 Change Rm Rm % Revenue 5 139 3 902 32% • Higher revenue in mining segment due to ramp-up of Moabsvelden and rectification sales from other operations Gross profit 551 411 34% • Gross profit increased by 34% resulting in gross profit margin of 10
Slide 18: Segmental Contributions and Revenue Diversity
SEGMENTAL CONTRIBUTIONS AND REVENUE DIVERSITY REVENUE EBITDA Segmental contribution FY21 FY22 FY22 18% Mining 98% Trading 82% FY22 Revenue diversity yoy FY21 30% 23% Eskom Other 77% 70% 18
Slide 19: Statement of Financial Position
STATEMENT OF FINANCIAL POSITION Audited Audited 31 Mar 2022 31 Mar 2021 Comments Rm Rm Non-current assets 3 048 2 849 • Increase in PPE due to additions & Property, plant and equipment 2 504 2 450 increase in rehabilitation asset Goodwill and intangible assets 63 62 • Goodwill impairment of R2.5 mil
Slide 20: Statement of Financial Position
STATEMENT OF FINANCIAL POSITION Audited Audited 31 Mar 2022 31 Mar 2021 Comments Rm Rm Total shareholders’ funds 812 849 • NAV of 198 cents per share (FY21: 207 Non-current liabilities 1 720 1 420 cents) Rehabilitation provision 1 390 998 • Higher rehabilitation due to ramp up of Deferred tax 205 23
Slide 21: EBITDA Trend and Analysis
EBITDA TREND AND ANALYSIS EBITDA (Rm) EBITDA/ SALES TON (R) 649 105.25 7.80 FY22 22.31 569 141.58 32.54 92.54 FY21 64.60 456 166.29 42.6 51.1 332 FY20 31.7 300 111.5 - 80.1 FY19 65.2 - - 130.7 FY18 89.8 - Moabsvelden Vanggatfontein Elandspruit Khanyisa 2018 2019 2020 2021 2022 21
Slide 22: Capital Allocation
CAPITAL ALLOCATION 1,200 1,000 800 +81 +33 -67 -672 +154 600 +73 1 021 +82 400 706 200 0 Net debt Cash Net interest Tax paid CAPEX Purchase Investment in Finance lease Net debt 31 March generated rehab & loan to JV asset & other 31 March 2021 from investment 2022 operations 22
Slide 23: Lending Structure
LENDING STRUCTURE DEBT PROFILE OF CURRENT FACILITIES 1 200 1 000 Re-Finance 800 The Group will look to Re-Finance part of the expiring facility 600 400 200 - Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan 20
Slide 24: Looking Ahead
LOOKING AHEAD SIF Salungano GROUP
Slide 25: Looking Ahead
LOOKING AHEAD Capitalize on the high coal price Strengthen our business Diversification and growth environment • Increase coal exports • Margin retention • Strategic acquisitions • Fully operationalize Arnot • Return VGF to production • Agriculture • Take coal resources within our • Strengthen balan