Whitehaven Coal Limited · ASX:WHC
Whitehaven Coal — H1 FY2021 Earnings Presentation
32 slides from Whitehaven Coal's earnings presentation, Feb 17, 2021
Slide 1: Half Year Results FY21
Half Year Results FY21 17 February 2021
Slide 2: Disclosure
Disclosure FORWARD LOOKING STATEMENTS 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 P
Slide 3: Contents
Contents 1. Whitehaven’s Market 2. H1 FY21 Results 3. Guidance for FY21 4. Appendices
Slide 4: Whitehaven's Market
Whitehaven’s Market
Slide 5: Whitehaven's customer base is in Asia
Whitehaven’s customer base is in Asia Whitehaven’s coal products are 4 18 Japan exported to Asia 2 6 Korea Our coal products are used: 1 1 Taiwan 1. In high efficiency, India 2 - 1 1 Vietnam low emission (HELE) electricity generation - 1 Philippines Malaysia - 1 2. to make steel; and Indonesia 1 - 3
Slide 6: Current coal market dynamics
Current coal market dynamics China's import restrictions on Australian sourced coal • Whitehaven has no direct exposure to China Industrial activity gaining momentum • Increased demand for all fuel types Impact of weather events • Northern hemisphere winter • La Niña 6
Slide 7: Forecast seaborne thermal coal demand & pricing
Forecast seaborne thermal coal demand & pricing Global seaborne thermal coal demand (Mt) Thermal coal prices, 6,000kcal, US$/t By 2025, seaborne imports will recover from 2020 lows Source: CRU January 2021 7
Slide 8: Whitehaven plays an important role helping customer countries meet their emission targets
Whitehaven plays an important role helping customer countries meet their emission targets The benefits of using Whitehaven coal products: High CV coal Assists customers Decreases the ash requires less coal to meet strict byproduct of the to be used to sulphur and generation process produce energy ni
Slide 9: H1 FY21 Results
WW Working H1 FY21 Results
Slide 10: H1 FY21 operational and financial highlights
H1 FY21 operational and financial highlights COVID’s impact on coal prices eclipsed an improved operational performance Safety Production Unit costs Earnings Liquidity 5.41 9.6Mt A$70/t $37.2m $411.8m TRIFR1 managed ROM EBITDA production 1 Total recordable injury frequency rate (TRIFR) - the number
Slide 11: Safety performance
Safety performance Safety is always a key focus for Whitehaven 25 20 ROM coal production (Mt) 15 and TRIFR Whitehaven recorded 10 a TRIFR of 5.41 5 5.41 as at 31 December 0 2020 FY09 FY10 FY11 FY12 FY13 FY14 FY15 FY16 FY17 FY18 FY19 FY20 H1 FY21 ROM coal production (Mt) Total Recordable Injury Frequ
Slide 12: ROM coal production and sales
ROM coal production and sales H1 FY21 ROM production H1 FY21 Sales supported by stock draw downs Whitehaven Managed ROM Coal Production (Mt) Whitehaven Managed Coal Sales (Mt) 14 13.1 14 12.2 12.2 11.8 12 11.7 12 10.8 11.4 11.2 10.9 11.2 11.0 10.4 0.7 10.2 0.1 10.3 10.1 10.3 0.9 10.0 10.2 10.5 9.6 9
Slide 13: Premium products sold into premium markets
Premium products sold into premium markets Demand for high quality, high CV thermal coal is increasing in the Asian market • We produce and sell high Thermal Coal Sales H1 FY21 Metallurgical Coal Sales H1 FY21 quality coal products into 4% Japan premium Asian markets 2%2% 2% 8% 3% Korea 10% • Manage
Slide 14: Maules Creek
Maules Creek Operational improvement Managed ROM Coal Production (Mt) Managed ROM production for H1 FY21 Guidance 24% at 5.2Mt ROM vs pcp of 4.2Mt range 11.8-12.4Mt • At the end of the half Maules Creek H2 operated through one of the wettest Decembers on record to deliver a 11.7 11.0 confidence-buil
Slide 15: Narrabri
Narrabri H1 FY21 impacted by geological challenges Managed ROM Coal Production (Mt) Managed ROM production for H1 FY21 30% at 2.6Mt ROM vs pcp of 2.0Mt • During the half the longwall mined through Guidance range a faulted section of LW109 that resulted in 5.4-6.0Mt reduced productivity and increased
Slide 16: Gunnedah open cuts
Gunnedah open cuts Smoothing annual production Managed ROM Coal Production (Mt) Managed ROM production for H1 FY21 35% at 1.8Mt ROM vs pcp of 1.3Mt • The increase reflects improved ROM coal Guidance production at both operating mines, Tarrawonga range and Werris Creek, reflecting improved mining 3.8
Slide 17: Growth opportunities and optionality
Growth opportunities and optionality Whitehaven has multiple options to grow its business of long life mines Assets Approved Production1 LOM • Mine ramping up to 16Mtpa ROM with the roll out of AHS2, Maules Creek 13Mtpa ROM >35 years commencement of in-pit dumping and 16Mtpa modification application
Slide 18: Financial highlights
Financial highlights Profit and Loss ($m) H1 FY21 H1 FY20 Comment COVID’s impact on coal prices offsets improved EBITDA 37.2 177.3 operational performance Net (loss)/profit after tax (94.5) 27.4 Cash generated from operations 54.9 122.3 Dividends (cps) - 1.5 Dividend policy 20%-50% of NPAT Unit cost
Slide 19: Profit and Loss
Profit and Loss COVID’s impact on coal prices eclipsed improved operational performance Financial Performance – A$ millions H1 FY21 H1 FY20 Revenue 699.3 885.1 Other income 1.6 1.4 Operating expenses (362.9) (338.6) Coal purchases (65.9) (127.4) Rail, Port, Marketing and Royalties (209.4) (227.9) Ad
Slide 20: EBITDA vs pcp
EBITDA vs pcp $m Realised Prices H1 FY21 H1 FY20 Thermal (USD/t) 55 70 200 Metallurgical (USD/t) 75 94 FX H1 FY21 H1 FY20 150 AUD:USD 0.72 0.68 100 177 (197) (10) 50 48 37 - 18 -50 H1 FY20 Price (net of royalties) Sales Volume Costs Other H1 FY21 and FX 20
Slide 21: Project STRIVE update
Project STRIVE update A two year program to embed cost savings into our business Initiatives include: Initiatives include: • Improved • CHPP recovery Expected cost productivity at load • Train load out savings and haul optimization (per sales of own coal): • Reduction in • Introduction of equipment
Slide 22: Drivers of D&A and net interest expense
Drivers of D&A and net interest expense H1 FY21 H1 FY20 Drivers Depreciation & amortisation $138.2m $116.1m • Increase driven by higher ROM production, the new Tarrawonga fleet, renewed lease arrangements and capitalised major rebuilds of the operating fleet D&A per tonne (sales of own coal) • Refle
Slide 23: Financing
Financing Diversified sources of capital Senior debt facility ECA2 Leased equipment Bank guarantees3 as at 31 December as at 31 December as at 31 December as at 31 December $688.0m drawn $63.1m $307.4m $446.2m drawn • $1bn syndicated facility • Average tenor of 8 years • Tenor - Four or five years •
Slide 24: Net debt and liquidity
Net debt and liquidity 31 Dec 2020 30 June 2020 • Available liquidity of $411.8m at 31 Dec 2020 $m $m • Undrawn senior debt facility of $312m Senior secured bank facility (drawn) 688.0 638.0 • Cash of $99.8m ECA1 63.1 68.1 • Increase of $50m in senior drawn debt driven by Finance leases 195.3 216.3
Slide 25: Investing - capital expenditure
Investing - capital expenditure Sustaining PP&E Growth Projects $37m $18m Operating mine • Sustaining capex • Water security projects • Land purchases • Maules Creek AHS • Narrabri mains • Vickery expansion Growth projects • Winchester South • Narrabri Stage 3 Extension 25
Slide 26: Guidance for FY21
WW Working Guidance for FY21
Slide 27: FY2021 production, sales & cost guidance
FY2021 production, sales & cost guidance FY21 FY21 H1 FY21 Key Elements updated previous Comments actual guidance guidance Managed ROM Coal Production Mt 9.6 21.0 – 22.5 21.0 – 22.5 Unchanged Maules Creek Mt 5.2 11.8 – 12.4 11.8 – 12.4 Unchanged Narrabri Mt 2.6 5.4 – 6.0 5.4 – 6.0 Unchanged Gunnedah
Slide 28: FY2021 capital expenditure guidance
FY2021 capital expenditure guidance H1 FY21 FY21 updated FY21 previous Key Elements Comments actual guidance guidance Sustaining Capital $m 19 35 – 40 30 – 35 Underground and open cut, land Major rebuilds previously funded in lease $m 15 20 – 25 30 – 35 refinance Narrabri Mains Development $m 3 3 5
Slide 29: Continued Focus CY21
Continued Focus CY21 Continue to improve operational performance and discipline driving improved productivity and lower costs • Improved safety and environmental performance • Operational focus • Build on early STRIVE initiatives and embed in operations • Retire debt 29
Slide 30: Appendices
WW Working Appendices
Slide 31: Gunnedah Basin and expanding to Bowen Basin
Gunnedah Basin and expanding to Bowen Basin Whitehaven is the largest independent producer of high CV coal in Australia Winchester South will increase Whitehaven’s metallurgical coal production 31
Slide 32: Unit cost calculation
Unit cost calculation The unit cost can be calculated off the face of the P&L. It includes operating expenses, selling & distribution expenses, administration expenses and share based payment expenses. Coal purchases, royalties, depreciation & amortisation, FX and significant items are excluded. H1