Whitehaven Coal Limited · ASX:WHC
Whitehaven Coal — Credit Suisse 22nd Asian Investment Conference 2019
40 slides from Whitehaven Coal's conference presentation, Mar 27, 2019
Slide 1: Whitehaven Coal Limited – Australia's Leading High Quality Coal Company
For personal use only WHITEHAVEN COAL LIMITED AUSTRALIA’S LEADING HIGH QUALITY COAL COMPANY Credit Suisse 22nd Asian Investment Conference 25 - 28 MARCH 2019
Slide 2: Disclosure
DISCLOSURE For personal use only 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 PROJEC
Slide 3: Agenda
AGENDA AGENDA For personal use only – Whitehaven Snapshot – Highlights for H1 – Safety Performance – Financial Performance – Operations – Growth – Outlook for Coal Use and Demand – Outlook for Whitehaven – Appendices 3 // CREDIT SUISSE ASIAN INVESTMENT CONFERENCE
Slide 4: Whitehaven Snapshot
WHITEHAVEN SNAPSHOT For personal use only PRODUCER OF HIGH QUALITY COALS FOR THE PREMIUM ASIAN MARKET Key Details ASX Code and Market Details WHC, 1,026m shares on issue, Market Cap A$4.5b, trades 120 million shares per month Narrabri U/G mine, Maules Creek, Tarrawonga, Werris Creek, Rocglen and Sun
Slide 5: Share and Coal Prices
SHARE AND COAL PRICES For personal use only Price and volume Thermal Coal Prices (NewC Index) 30 6.2 180 160 25 140 5.6 20 120 Share price ($) Volume (m) 100 15 5.0 80 10 60 4.5 40 5 20 0 3.9 0 29-Jun-18 03-Aug-18 07-Sep-18 12-Oct-18 16-Nov-18 21-Dec-18 25-Jan-19 01-Mar-19 3/07/2015 3/07/2016 3/07/2
Slide 6: Location
APPENDICES LOCATION Winchester South For personal use only – Six mines in the Gunnedah Basin producing high energy thermal coal and metallurgical coal – All coal railed to Newcastle for export with access to two coal terminals – Vickery project near other mines in NSW – The recently acquired Winches
Slide 7: Sales to Premium Markets
OPERATIONS SALES TO PREMIUM MARKETS For personal use only WHITEHAVEN CONTINUES TO DIVERSIFY ITS SALES TO THE GROWING ASIAN MARKET H1 FY2019 THERMAL COAL SALES – Managed coal sales of 10.3Mt including purchased 2% 3% 2% coal for the year 5% Japan Taiwan – Taiwan’s demand for higher quality coal conti
Slide 8: First Half Highlights
HIGHLIGHTS FIRST HALF HIGHLIGHTS For personal use only RECORD HALF YEAR PROFIT TRIFR of 7.6 at 31 December Record first half net profit of slightly higher than pcp and A$305.8 million up 19% on well below NSW average pcp Equity coal sales of 8.4Mt Record EBITDA of A$550.8 including purchased coal mi
Slide 9: Safety Performance
SAFETY PERFORMANCE SAFETY PERFORMANCE For personal use only ONGOING FOCUS TO IMPROVE SAFETY OUTCOMES Whitehaven Group TRIFR and Saleable Coal Production (Mt) – Whitehaven recorded a TRIFR of 25 7.57 at December 2018 – In an effort, to improve there has 20 been a renewed focus on safety 15 across the
Slide 10: Financial Performance
For personal use only FINANCIAL PERFORMANCE
Slide 11: Key Financial Highlights – H1
FINANCIAL PERFORMANCE KEY FINANCIAL HIGHLIGHTS – H1 For personal use only H1 H1 Profit and loss Comment FY2019 FY2018* Net profit after tax (A$’m) 305.8 256.2 – Record, up 19% on pcp Underlying EBITDA before significant items (A$’m) 550.8 493.7 – Record, up 12% on pcp Cash generated from – Increasin
Slide 12: Margins and Costs
FINANCIAL PERFORMANCE MARGINS AND COSTS For personal use only STRONG UNDERLYING DEMAND FOR HIGH QUALITY COAL DRIVES INCREASED MARGINS H1 FY2019 FY2018 – Higher average prices for the first half with achieved prices of US$110/t for thermal coal Coal Sales (equity basis, excl. Mt 7.4 16.0 and US$124/t
Slide 13: Recent Cost Impacts
FINANCIAL PERFORMANCE RECENT COST IMPACTS For personal use only COSTS ARE EXPECTED TO MODERATE Recurring & Recurring & Short Term Market Related Factor Structural Strategic non-recurring ~$3/t ~$3/t ~$1/t ~$4/t Diesel prices Product strategy – Maules Creek Increasing depth of cover – Narrabri
Slide 14: Balance Sheet
FINANCIAL PERFORMANCE BALANCE SHEET For personal use only BALANCE SHEET IN EXCELLENT SHAPE 31 Dec 2018 30 June 2018 – Strong balance sheet supporting a sustainable capital A$’m A$’m allocation framework Cash on hand 89.2 111.8 – The Board has declared an unfranked interim and Senior secured bank fac
Slide 15: Shareholder Distributions
FINANCIAL PERFORMANCE SHAREHOLDER DISTRIBUTIONS For personal use only RETURNING CASH TO SHAREHOLDERS Shareholder returns paid between November 17 – Whitehaven has committed to returning and March 19 (A$m) 198 793 9 excess cash to shareholders and does not intend to build cash on the balance sheet 26
Slide 16: Operations
For personal use only OPERATIONS
Slide 17: Production Growth
OPERATIONS PRODUCTION GROWTH For personal use only WHITEHAVEN HAS MORE THAN DOUBLED PRODUCTION OVER FIVE YEARS WITH MORE TO COME IN THE FUTURE Whitehaven Managed Saleable Production (Mt) – Whitehaven’s managed production has 25.0 grown strongly in recent years 20.0 – Saleable coal production in FY20
Slide 18: Maules Creek – WHC 75%
MAULES CREEK – WHC 75% For personal use only WHITEHAVEN’S NEWEST AND LARGEST, LONG LIFE HIGH QUALITY COAL MINE – Commercial production began in July 2015 after two Maules Creek Saleable Coal Production (Mt) years of construction and capex of ~$720 million 10.0 – Mine capable of producing 50:50 metal
Slide 19: Narrabri – WHC 70%
NARRABRI – WHC 70% For personal use only A HIGHLY PRODUCTIVE LOW COST UNDERGROUND MINE Narrabri Saleable Coal Production (Mt) – Commercial production began in 2012 8.0 – Mine produces PCI coal (sold to Indian steel mills) and a NewC Index (6,000k/cal), low 6.0 ash thermal coal – A 400 metre wide lon
Slide 20: Narrabri Stage 3
OPERATIONS NARRABRI STAGE 3 For personal use only SHORT AND LONGER TERM OUTLOOK FOR Mined Area NARRABRI Mining – FY2019 ROM coal production expected to be in the range of Lease 5.6Mt to 6.0Mt increasing g to the range of 6.2Mt to 6.6Mt in Boundary FY2020 Potential Stage 3 – Conversion of the souther
Slide 21: Gunnedah Mines – WHC 100%
GUNNEDAH MINES – WHC 100% For personal use only STABLE PLATFORM OVER MANY YEARS – The Gunnedah mines comprise Werris Creek Gunnedah Open Cuts Saleable Coal Production (Mt) (2.1Mtpa), Rocglen (0.7Mtpa), Tarrawonga 6.0 (2.4Mtpa) and Sunnyside rehab project (0.4Mt) 5.0 – Reserves at Rocglen are deplete
Slide 22: Growth
For personal use only GROWTH EN WHITEHAVEN COAL
Slide 23: Vickery Extension Project Status
GROWTH VICKERY EXTENSION PROJECT STATUS For personal use only MOVING THROUGH THE REGULATORY PROCESS – Public display of EIS completed 25 September 2018 – 63% of 560 submissions were supportive – Independent Planning Commission (IPC) of three commissioners formed – Department of Planning and Environm
Slide 24: Winchester South
GROWTH WINCHESTER SOUTH For personal use only LOCATED IN A WORLD CLASS MINING PRECINCT – With a JORC Resource of 530Mt, Winchester South project is in a world class, established mining precinct surrounded by a number of operating mines with a rail line that passes directly over the Winchester South
Slide 25: Outlook for Coal Use & Demand
OUTLOOK FOR COAL For personal use only USE & DEMAND
Slide 26: Outlook for Coal Use – IEA New Policies Scenario
OUTLOOK FOR COAL USE IEA NEW POLICIES SCENARIO (NPS) For personal use only THE NPS IS THE CORE SCENARIO DEVELOPED BY THE INTERNATIONAL ENERGY AGENCY (IEA) FOR THE WORLD’S ENERGY OUTLOOK (WEO) NPS World Primary Energy Demand by Fuel – In the IEA WEO 2018 report the IEA has (Mtoe) projected under the
Slide 27: World Coal Demand
COAL DEMAND OUTLOOK WORLD COAL DEMAND For personal use only LARGE REGIONAL DIFFERENCES IN WORLD PROJECTED COAL DEMAND Coal Demand Change 2017 - 2040 (Mtce) – Under the NPS, the IEA projects coal demand to increase by 1.5% or 100Mt of 6,000 kcal/kg coal Other Asia over the outlook period SE Asia – Ho
Slide 28: Global Coal Production
COAL DEMAND OUTLOOK GLOBAL COAL PRODUCTION For personal use only THE IEA PROJECTS THAT MORE MINES ARE REQUIRED TO MEET DEMAND UNDER NPS – Under the NPS, the IEA projects that a total of US$1 trillion investment is required in existing and new mines to deliver coal out to 2040 – Expansions and new mi
Slide 29: Growth in Asia Pacific
COAL DEMAND OUTLOOK GROWTH IN ASIA PACIFIC For personal use only COAL DEMAND PROJECTED TO GROW STRONGLY IN WHITEHAVEN’S KEY MARKETS Coal Demand in Asia Pacific Region NPS – Under the NPS, the IEA projects coal demand to (Mtce) increase by 12% or 491Mtce (575Mt of 6,000 kcal/kg 5000 coal) in the Asia
Slide 30: SE Asia Electricity Capacity
SE ASIA ELECTRICITY CAPACITY For personal use only GENERATION CAPACITY OF ALL TYPES GROWS STRONGLY IN THE REGION Southeast Asia Generation Capacity (GW) – Under the NPS, the IEA projects that 700 South East Asian generation 600 capacity grows from 248GW in 2017 to 620GW in 2040 500 – Coal fired elec
Slide 31: Short Term Forecasts for SE Asia
SHORT TERM FORECASTS FOR SE ASIA For personal use only COAL DEMAND GROWING STRONGLY IN WHITEHAVEN’S MARKETS SE Asia Thermal Coal Imports (Mt) – CRU forecasts that South East Asian coal 140 imports are expected to grow from 90Mt in 120 2017 to 124Mt by 2023 as these countries deploy more coal fired p
Slide 32: Short Term Coal Exports
SHORT TERM COAL EXPORTS For personal use only EXPORTS FROM THE MAJOR EXPORTING COUNTRIES DO NOT GROW OVER THE FORECAST PERIOD Seaborne Thermal Coal Exports (Mt) – CRU forecasts thermal coal exports to 1,200 remain flat over the period to 2023 1,000 – Australian exports are forecast to grow from 200M
Slide 33: Outlook for Whitehaven
OUTLOOK FOR For personal use only WHITEHAVEN
Slide 34: Whitehaven's Production Profile
OUTLOOK FOR WHITEHAVEN WHITEHAVEN’S PRODUCTION PROFILE For personal use only PRODUCTION FORECAST TO GROW WITH VICKERY & WINCHESTER SOUTH PROJECTS Whitehaven Saleable Coal Production Profile – Managed saleable coal production (100%, Mt) is forecast to grow strongly from 40 the startup of the Vickery
Slide 35: Thank You
For personal use only THANK YOU www.whitehavencoal.com.au
Slide 36: Appendices
For personal use only APPENDICES
Slide 37: Winchester South Project
APPENDICES WINCHESTER SOUTH PROJECT For personal use only ACQUISITION OF HIGH QUALITY METALLURGICAL COAL PROJECT COMPLETED 37 //CREDIT SUISSE ASIAN INVESTMENT CONFERENCE
Slide 38: Resources
APPENDICES RESOURCES For personal use only 38 //CREDIT SUISSE ASIAN INVESTMENT CONFERENCE
Slide 39: Reserves
APPENDICES RESERVES For personal use only Note: See Competent Person Statement on Slide 2 39 //CREDIT SUISSE ASIAN INVESTMENT CONFERENCE
Slide 40: Winchester Resources
APPENDICES WINCHESTER RESOURCES For personal use only Information in this report that relates to Coal Resources is based on and accurately reflects reports prepared by the Competent Person named beside the respective information. Troy Turner is the Managing Director of Xenith Consulting Pty Ltd. The
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