Fortescue Ltd · ASX:FMG
Fortescue — Fortescue Metals Group — H1 FY2012 Earnings Presentation
20 slides from Fortescue's earnings presentation, Feb 15, 2012
Slide 1: Half Year Results – December 2011
For personal use only Halff Year Results – December 2011 15th February 2012
Slide 2: Disclaimer
Disclaimer For personal use only Important Notice The purpose of this presentation is to provide general information about Fortescue Metals Group Ltd ("Fortescue"). It is not recommended that any person makes any investment decision in relation to Fortescue based on this presentation. This presentat
Slide 3: Highlights
Highlights For personal use only • Continuing improvement in safety performance with Lost Time Injury Frequency rate now 40% below industry standard • Record shipped tonnes of 26.6mt for the half year • Annualised production exceeds targeted 55mtpa run rate in Dec quarter • Completion of US$1.5bn ex
Slide 4: Financial Summary
Financial Summary For personal use only • Reported net profit after tax US$801m • Record operating revenues of US$3 US$3,357m 357m • Underlying EBITDA(1) of US$1,510m • Cash balance of US$2 US$2,473m 473m • Net debt of US$3,918m • Higher C1 costs US$47.97 per wmt – Foreign exchange impact – Increase
Slide 5: Underlying EBITDA
Underlying EBITDA (1) For personal use only Underlying EBITDA (US$m) 2,000 473 4 1,510 1,500 203 61 11 1,316 1,000 500 Underlying EBITDA-1H11 Volume Impact Selling Price Input Costs Government Royalties Other Underlying EBITDA-1H12 Ramp up profile delivers record results (1) Underlying EBITDA: calcu
Slide 6: Group Performance
Group Performance For personal use only Half year ended 31 December 2011 2010 % Tonnes shipped(1) (millions - wmt) 26.6 19.5 36% Average CFR price ($/dmt) 138.6 125.8 10% Underlying EBITDA(2) 1,510 1,316 15% Re-estimation of unsecured loan note 8 ((7)) 214% Net foreign exchange 16 (20) 180% EBITDA 1
Slide 7: Earnings Profile
Earnings Profile For personal use only Total Earnings Profile Per share Earnings Profile 1,600 60.00 1,400 50.00 1,200 40.00 1,000 $m 800 $m 30.00 600 20 00 20.00 400 10.00 200 - - 1HFY11 2HFY11 1HFY12 1HFY11 2HFY11 1HFY12 Underlying EBITDA NPBT before refinancing costs EPS CFPS Solid earnings profi
Slide 8: Cash Flows
Cash Flows For personal use only Half y year ended 31 December ($ ($m)) 2011 2010 % Cashflows from operations 1,186 1,201 (1%) Investing activities (2,402) (537) 347% Financing activities 997 452 121% Foreign exchange 28 31 (10%) Net (decrease)/increase in cash (190) 1,147 • Cash flows from operatio
Slide 9: Capital Investment - Cashflow
Capital Investment - Cashflow For personal use only Exploration, p , evaluation and development p (US$m) ( ) 1HFY12 FY11 Expansion to 155mtpa 1,842 446 Expansion to 55mtpa 98 385 Optimisation p 194 224 Sustaining 155 263 Exploration 75 110 Total cash flows 2,364 1,428 Cash spend profile will acceler
Slide 10: Strengthening Financial Position
Strengthening Financial Position For personal use only Cash on hand (US$m) • Period on period improvement in 2,663 2,473 cash flow delivers balance sheet strength 1,236 • Strong credit metrics reflective of investment grade ratio levels 655 • Successful execution of expansion funding plan FY09 FY10
Slide 11: Debt Maturity Profile
Debt Maturity Profile For personal use only Debt Maturity Profile February eb ua y 2012 0 (US$ (US$m)) $2,500 Senior Unsecured Notes Senior Unsecured Notes (Call Option) Revolving Credit Facility (undrawn) $2,040 $2,000 $1,500 $1,500 $1 000 $1,000 $900 $600 $600 Preference Unsecured $500 shares Loan
Slide 12: Existing Bond Portfolio
Existing Bond Portfolio For personal use only Yield Trading Coupon 6.50% value #1 6.10% 2015 U Unsecured dNNotes t 7 000% 7.000% 105 5.47% 2016 Unsecured Notes 6.375% 103 5.25% 2018 Unsecured Notes 6.875% 103 2015 Unsecured 2016 Unsecured 2018 Unsecured 2019 Unsecured 2019 Unsecured Notes 8.250% 108
Slide 13: Future Funding Plan
Future Funding Plan For personal use only • Original plan for 50% funding of $8.4bn infrastructure budget against g which $$3bn has been drawn • Current debt portfolio is unsecured with mix of maturities, early redemption options and an undrawn $600m standby line • Various options for expanded mine
Slide 14: Expansion Update
Expansion Update For personal use only Port • Third berth ready for action with commissioning of 2nd out out-load load circuit underway • Dredging of 4th berth completed Rail • Earthworks advancing on rail duplication and Solomon spur line • Track laying for main line duplication underway Christmas
Slide 15: Expansion milestones - Port
Expansion milestones - Port For personal use only Port • Second in-load in load circuit end Sept Qtr 2012 • Third in-load circuit end Dec Qtr 2012 • Completion of 4th berth and third out-load out load circuit in March Qtr 2013 being a delay on original schedule of end Dec Qtr 2012 15
Slide 16: Expansion milestones - Rail
Expansion milestones - Rail For personal use only Rail • Track laying for main line duplication completed within Sept Qtr 2012 • Spur line to Solomon to be completed by end Dec 2012 • Delivery of additional wagons and locos progressively over the next 10 months 16
Slide 17: Expansion milestones – Chichester Hub
Expansion milestones – Chichester Hub For personal use only Christmas Creek • Completion of 2nd OPF by end Sept Qtr 2012 • Enhancement to existing OPF to 25Mta run rate during June Qtr 2012 • Mining ramp up to targeted 50mtpa be end December 2012 Cloudbreak • New wet front end commissioning for the
Slide 18: Expansion Milestones – Solomon Hub
Expansion Milestones – Solomon Hub For personal use only Solomon • Permanent Village of 1 1,800 800 beds to be completed within June Qtr 2012 • Mining contract to be finalised early June Qtr 2012 • Sealed airstrip operational through June Qtr 2012 • Firetail OPF to commence ramp up through Dec Qtr 2
Slide 19: 2012 and Beyond
2012 and Beyond For personal use only A near term growth story based on pure iron ore exposure p leveraged g to Asia: • Consolidating the 55mtpa operating platform • Fast tracked growth in the near term • Exploration and development teams delivering longer term potential • Nyidinghu development look
Slide 20: Sign up to alerts online
For personal use only Sign up to alerts online www.fmgl.com.au
Fortescue Metals Group — H1 FY2012 Earnings Presentation on 6ix