Whitehaven Coal Limited · ASX:WHC
Whitehaven Coal — BMO 28th Global Metals & Mining Conference 2019
36 slides from Whitehaven Coal's conference presentation, Feb 25, 2019
Slide 1: Whitehaven Coal Limited
WHITEHAVEN COAL LIMITED AUSTRALIA’S LEADING HIGH QUALITY COAL COMPANY BMO 28th Global Metals & Mining Conference 24 - 27 FEBRUARY 2019
Slide 2: Disclosure
DISCLOSURE 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: Agenda
AGENDA AGENDA – Whitehaven Snapshot – Highlights for H1 – Safety Performance – Financial Performance – Operations – Growth – Outlook for Coal Use and Demand – Outlook for Whitehaven – Appendices 3 // BMO GLOBAL METALS & MINING CONFERENCE
Slide 4: Whitehaven Snapshot
WHITEHAVEN SNAPSHOT PRODUCER OF HIGH QUALITY COALS FOR THE PREMIUM ASIAN MARKET ASX Code: WHC Costs – 1,026 million shares on issue with over 5,500 – Unit costs of A$69/t (<US$50/t) in H1 FY2019, likely to shareholders decline in the future – Market Cap A$4.5 billion (US$3.2B) – Trading over 120 mil
Slide 5: Location: Winchester South
APPENDICES LOCATION Winchester South 5 // BMO GLOBAL METALS & MINING CONFERENCE
Slide 6: First Half Highlights
HIGHLIGHTS FIRST HALF HIGHLIGHTS 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$550.8 including purchased coal million up 12% on pcp An
Slide 7: Safety Performance
SAFETY PERFORMANCE SAFETY PERFORMANCE ONGOING FOCUS TO IMPROVE SAFETY OUTCOMES Whitehaven Group TRIFR and Saleable Coal – Whitehaven recorded a TRIFR of Production (Mt) 7.57 at December 2018 25 – In an effort, to improve there has 20 been a renewed focus on safety across the business 15 – Work on im
Slide 8: Financial Performance
FINANCIAL PERFORMANCE
Slide 9: Key Financial Highlights – H1
FINANCIAL PERFORMANCE KEY FINANCIAL HIGHLIGHTS – H1 H1 H1 Profit and loss Comment FY2019 FY2018* Net profit after tax (A$’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 – Increasing EBITDA flowing 463.7
Slide 10: Margins and Costs
FINANCIAL PERFORMANCE MARGINS AND COSTS STRONG UNDERLYING DEMAND FOR 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 for metallurgical coal pur
Slide 11: Recent Cost Impacts
FINANCIAL PERFORMANCE RECENT COST IMPACTS COSTS ARE EXPECTED TO MODERATE Recurring & Recurring & Short Term Market Related Factor Structural Strategic non-recurring ~$3/t ~$3/t ~$1/t ~$4/t Diesel prices Product strategy – Maules Creek Increasing depth of cover – Narrabri Strip ratio increasing
Slide 12: Balance Sheet
FINANCIAL PERFORMANCE BALANCE SHEET BALANCE SHEET IN EXCELLENT SHAPE 31 Dec 2018 30 June 2018 – Strong balance sheet supporting a sustainable capital A$’m A$’m allocation framework Cash on hand 89.2 111.8 – The Board has declared an unfranked interim and special dividend totalling A$0.20ps, payable
Slide 13: Shareholder Distributions
FINANCIAL PERFORMANCE SHAREHOLDER DISTRIBUTIONS RETURNING CASH TO SHAREHOLDERS Shareholder returns paid between November 17 – Whitehaven has committed to returning and March 19 (A$m) excess cash to shareholders and does not 198 793 9 intend to build cash on the balance sheet 268 – Total returns to s
Slide 14: Operations
OPERATIONS
Slide 15: Sales to Premium Markets
OPERATIONS SALES TO PREMIUM MARKETS 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 continues to 12% Korea grow
Slide 16: Production Growth
OPERATIONS PRODUCTION GROWTH 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 FY2019 is expected to be i
Slide 17: Maules Creek High Value Products
OPERATIONS MAULES CREEK HIGH VALUE PRODUCTS STRATEGY TO INCREASE PRICING REALISATIONS Strategy – To deliver fewer high quality products from the mine and to capture the full value of the low ash and low sulphur coals produced at Maules Creek – Three key products to be delivered – a very low ash SSCC
Slide 18: Narrabri Stage 3
OPERATIONS NARRABRI STAGE 3 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 southern exploration licence
Slide 19: Growth
GROWTH
Slide 20: Vickery Extension Project Status
GROWTH VICKERY EXTENSION PROJECT STATUS 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 Environment completed Prelimin
Slide 21: Winchester South
GROWTH WINCHESTER SOUTH 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 tenement – An Initial
Slide 22: Outlook for Coal Use & Demand
OUTLOOK FOR COAL USE & DEMAND
Slide 23: IEA New Policies Scenario (NPS)
OUTLOOK FOR COAL USE IEA NEW POLICIES SCENARIO (NPS) 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 – In the IEA WEO 2018 report the IEA has Fuel (Mtoe) projected in the NPS: World energy demand
Slide 24: Upgraded Coal Fired Technology
OUTLOOK FOR COAL USE UPGRADED COAL FIRED TECHNOLOGY POWER STATION GENERATING TECHNOLOGY IS ON THE UPGRADE PATH – In the NPS, the IEA has projected that coal Coal Demand by Generation Technology NPS (Mtce) consumed for electricity generation (3.4Btce) 4000 will remain stable over the outlook period 3
Slide 25: World Coal Demand
COAL DEMAND OUTLOOK WORLD COAL DEMAND 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 – relatively flat SE Asia – Howeve
Slide 26: Global Coal Production
COAL DEMAND OUTLOOK GLOBAL COAL PRODUCTION 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 mines will be needed to
Slide 27: Growth in Asia Pacific
COAL DEMAND OUTLOOK GROWTH IN ASIA PACIFIC COAL DEMAND PROJECTED TO GROW STRONGLY IN WHITEHAVEN’S KEY MARKETS Coal Demand in Asia Pacific Region – Under the NPS, the IEA projects coal demand to NPS (Mtce) increase by 12% or 491Mtce (575Mt of 6,000 kcal/kg 5000 coal) in the Asia Pacific region out to
Slide 28: Australian Coal Exports
COAL DEMAND OUTLOOK AUSTRALIAN COAL EXPORTS IEA EXPECTS AUSTRALIA TO INCREASE EXPORTS OF COAL BY 22% OR 78MTCE Major Coal Exporters NPS (Mtce) – Under the NPS, the IEA projects coal 1200 exports (seaborne market) to stabilise around current levels out to 2040 1000 – The IEA projects Australia will g
Slide 29: Outlook for Whitehaven
OUTLOOK FOR WHITEHAVEN
Slide 30: Whitehaven's Production Profile
OUTLOOK FOR WHITEHAVEN WHITEHAVEN’S PRODUCTION PROFILE 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 and 35 30 Winchester S
Slide 31: Thank You
THANK YOU www.whitehavencoal.com.au
Slide 32: Appendices
APPENDICES
Slide 33: Winchester South Project
APPENDICES WINCHESTER SOUTH PROJECT ACQUISITION OF HIGH QUALITY METALLURGICAL COAL PROJECT COMPLETED 33 //BMO GLOBAL METALS & MINING CONFERENCE
Slide 34: Resources
APPENDICES RESOURCES 34 //BMO GLOBAL METALS & MINING CONFERENCE
Slide 35: Reserves
APPENDICES RESERVES Note: See Competent Person Statement on Slide 2 35 //BMO GLOBAL METALS & MINING CONFERENCE
Slide 36: Winchester Resources
APPENDICES WINCHESTER RESOURCES 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 named Competent Perso
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