Yancoal Australia Ltd. · ASX:YAL
Yancoal Australia — H1 2024 Earnings Presentation
36 slides from Yancoal Australia's earnings presentation, Aug 19, 2024
Slide 1: Overseas Regulatory Announcement
Australian Securities Exchange, Hong Kong Exchanges and Clearing Limited and The Stock Exchange of Hong Kong Limited take no responsibility for the contents of this announcement, make no representation as to its accuracy or completeness and expressly disclaim any liability whatsoever for any loss ho
Slide 2: Yancoal Australia 1H 2024 Financial Results
Yancoal Australia 1H 2024 Financial Results 19 August 2024
Slide 3: Important Notice and Disclaimer
Important Notice and Disclaimer Acceptance - This presentation is issued by Yancoal Australia Limited ABN 82 111 859 119 (“Yancoal”). By accepting, accessing or reviewing this presentation, you acknowledge and agree to the terms set out in this Important Notice and Disclaimer. Summary of information
Slide 4: Important Notice and Disclaimer
Important Notice and Disclaimer Reserves and Resources Reporting - In this presentation, references to mineral resources (“Resources”) and ore reserves (“Reserves”) for Yancoal are compliant with the Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves 2012 (“JO
Slide 5: Financial Results Highlights
Financial Results Highlights 7.0 TRIFR rate remains below $3.14 billion Revenue, weighted industry average. $990 million Operating EBITDA (32% margin). 27.9Mt ROM production (100%), $420 million Profit after Tax, 21.6Mt Saleable production (100%), $0.32 earnings per share. 17.0Mt Saleable production
Slide 6: Safety Performance
Safety Performance Yancoal 12mth rolling TRIFR and LTIFR 10.0 ◦ The 12-month rolling Total Recordable Injury Frequency Rate was 7.0 at the end of 2Q 2024, 8.0 an increase from the 5.1 rate at the end of 4Q 2023. 6.0 ◦ Whilst still below the comparable industry weighted average of 8.7, we are committ
Slide 7: Sustainability
Sustainability ◦ In April 2024, the Group published its first Sustainability Report that integrates “Environment, Social & Governance” information with revised sustainability disclosure. ◦ Yancoal has commenced the development of systems and processes in preparation for increased disclosure requirem
Slide 8: Operational Performance
Operational Performance Operating factors 1H 2024 1H 2023 Change Observations ROM coal production, (Mt) 27.9 26.0 7% Production uplift reaffirms effectiveness Saleable coal production, (Mt) 21.6 18.6 16% of the recovery program. Attributable coal production, (Mt) * 17.0 14.4 18% Thermal coal sales,
Slide 9: Thermal Coal Market
Thermal Coal Market Thermal coal indices & Yancoal's average thermal coal sale price* ◦ Thermal coal markets appeared balanced during 250 the period, with relatively high end-user 200 stockpiles in Japan and South Korea countering good demand levels. 150 ◦ China sourced additional imports before rai
Slide 10: Metallurgical Coal Market
Metallurgical Coal Market Metallurgical coal indices & ◦ In the metallurgical coal markets, reduced Yancoal's average met. coal sale price* supply was countered by the reduced demand 350 typically observed during the northern 300 hemisphere summer. 250 ◦ India had been a positive driver, but demand
Slide 11: Product Mix
Product Mix Attributable sales volume* ◦ Responded to market conditions in 1H 2024 (million tonnes) 20.0 18.7 and prioritised thermal coal production. 15.7 2.3 16.9 ◦ Regional supply adjusted to further sanctions 2.0 15.0 2.4 13.6 14.4 on Russian exports but were not overly 2.3 2.4 affected. 10.0 ◦
Slide 12: Sales Volume and Revenue Split
Sales Volume and Revenue Split 1H 2023 Revenue 15% 32% 18% 20% 5% 4% 2% 2% 1H 2024 Revenue 33% 23% 15% 17% 7% 2% 1H 2023 Volume 23% 18% 16% 16% 12% 6% 4% 2% 3% 1H 2024 Volume 34% 19% 15% 11% 11% 2% 3% 2% 3% —% 5% 10% 15% 20% 25% 30% 35% 40% 45% 50% 55% 60% 65% 70% 75% 80% 85% 90% 95% 100% China Japa
Slide 13: Thermal Coal Market Demand Profile
Thermal Coal Market Demand Profile WoodMackenzie historical coal generation capacity forecasts 1H 2021 1H 2022 1H 2023 1H 2024 2,200 ◦ Analyst forecasts for global coal-fired 2,150 power capacity generation continue to be revised in response to strong electricity 2,100 demand. 2,050 Capacity (GW) 2,
Slide 14: Thermal Coal Market Supply Elements
Thermal Coal Market Supply Elements Net supply changes, year-on-year Australia Americas Indonesia Russia Other ◦ Generation capacity peak potentially aligns 20 with forecast supply decline in late 2020’s. 10 ◦ Years of regulatory permitting and finance 0 restrictions contribute to acceleration of Th
Slide 15: ROM Coal Production
ROM Coal Production ROM Production by Asset (100% basis)*, million tonnes ◦ Total ROM mined (100% basis) was 27.9Mt, an 40.0 increase of 7% from 1H 2023. 34.2 35.0 ◦ After investing in additional water storage 27.9 30.0 25.8 26.0 capacity, the mines are now better placed to 24.7 25.0 face both dry a
Slide 16: Saleable Coal Production
Saleable Coal Production Attributable Saleable Production by Asset*, ◦ Attributable saleable coal production, million tonnes 25.0 25.0 increased 18% compared to 1H 2023. 21.6 20.8 ◦ The 2023 quarter-by-quarter profile was 20.0 18.6 19.0 18.1 17.0 5.9Mt, 8.5Mt, 9.3Mt and 9.7Mt. To date in 15.5 14.4 1
Slide 17: Australian Thermal Coal Mines (energy adjusted)
Australian Thermal Coal Mines (energy adjusted) 225 200 Low cost mines 175 Total cash costs, US$/t 150 125 100 MTW HVO 75 Moolarben 50 Large scale mines 25 0 2 4 6 8 10 12 14 16 18 20 22 Annual production, Mt Yancoal’s large scale, low cost mines underpin its competitive position Source: Wood Macken
Slide 18: Cash Operating Costs
Cash Operating Costs Cash operating costs (per product tonne), A$/tonne 120 109 ◦ Inflationary cost pressures across the coal 107 110 101 100 industry, particularly external cost inflation 20 18 86 90 83 17 factors including diesel, explosives, electricity 80 70 13 22 25 15 and spare parts are now e
Slide 19: Operating Cash Margin
Operating Cash Margin Operating cash margin (per product tonne), A$/tonne 400 350 ◦ Coal prices have retreated from 2022 levels in 300 291 response to international energy market 250 conditions but were still robust. 206 144 200 ◦ An implied operating cash margin of $60/t is 150 21 93 60 higher than
Slide 20: Financial Performance
Financial Performance Income Statement 1H 2024 1H 2023 Change Observations Revenue 3,138 3,976 (21)% Operating EBITDA 990 1,821 (46)% Lower realised price impacted Operating EBIT 590 1,410 (58)% revenue; this impact continued down the Income Statement. Profit Before Tax 571 1,388 (59)% Profit After
Slide 21: Price, Revenue and EBITDA
Price, Revenue and EBITDA Revenue and Average realised price Operating EBITDA and Margin (A$ Million) | (A$/tonne) (A$ Million) | (%) 7,000 500 4,000 65% 66% 70% 451 6,000 60% 400 3,000 5,000 46% 44% 50% 314 278 300 4,000 40% 2,000 32% 197 3,806 3,000 176 30% 5,772 200 3,153 4,776 2,000 3,976 20% 3,
Slide 22: Profit and Operating Cash flow
Profit and Operating Cash flow Profit after tax Operating cash flow (A$ Million) (A$ Million) 2,000 4,000 1,500 3,000 1,000 2,000 1,848 3,778 1,738 2,750 500 973 1,000 846 1,172 420 851 — — 89 1H 2022 2H 2022 1H 2023 2H 2023 1H 2024 1H 2022 2H 2022 1H 2023 2H 2023 1H 2024 Profit / (Loss) after tax N
Slide 23: Debt and Gearing
Debt and Gearing Annual Net Debt and Gearing Ratio* (A$ Million) | (%) ◦ Over US$3.0 billion in loan repayments from 4,500 50% late 2021 to early 2023. 41% 3,000 40% ◦ The early repayments delivered over $300 million in finance cost savings during 2023, and 1,500 30% 24% should deliver similar savin
Slide 24: Dividend
Dividend Dividend and Payout Ratio (A$ Million) | (%) ◦ 2023 Final dividend of $429 million fully 1,750 118% 125% franked paid in April 2024, brought total 1,500 100% dividends paid to $4.3 billion. 1,250 924 ◦ The Board has not declared an interim 75% 1,000 60% 58% dividend, retained cash provides
Slide 25: 2024 Operational Expectations
2024 Operational Expectations Operating component Guidance and outlook Yancoal aims to operate at levels similar to 2H 2023 during 2H Attributable saleable coal production 2024, allowing full year output to fall with in the guidance range. Attributable saleable production of 35-39 million tonnes. Th
Slide 26: Appendices and Additional Information
Appendices and Additional Information 24
Slide 27: Executive Leadership Team
Executive Leadership Team Chair of the Executive Chief Executive Officer Chief Financial Officer Executive General Manager Company Secretary, Chief Executive General Manager Chief Commercial Officer Committee (CEC) (CEO) (CFO) – Operations (Acting) Legal, Compliance, and – Marketing (CCO) MR NING YU
Slide 28: Yancoal Overview
Yancoal Overview Milestones in Yancoal’s growth 2023 – Repaid the last external loans. Allocated dividends to shareholders of $918 million (or A$0.695/share). 2022 – $10.5 billion record revenue and $3.6 billion profit after tax. Allocated $1.6 billion in dividends (A$1.23/share). 2020 – Acquired ad
Slide 29: Our economic contributions in 2023
Our economic contributions in 2023 Over $2 billion in corporate income tax and $3 billion in total tax contributions. 1 Value-Added Impact captures both Yancoal’s direct and indirect economic contributions. Indirect impacts capture flow-on economic benefits generated by business supply chain expendi
Slide 30: Yancoal Operations Summary
Yancoal Operations Summary • An interest in 7 producing coal mines and operates 2 mines on management contracts. • Total annual production across the 9 mines is about 70 million tonnes of ROM coal and 55 million tonnes of saleable coal, and nearly all saleable coal enters the export market. Mount Th
Slide 31: Yancoal Reserves and Resources
Yancoal Reserves and Resources • Mining depletion was the primary driver of changes in Coal Resources and Coal Reserve from 2022 to 2023. • HVO concluded a multi-year geological review, resulting in an uplift to the Measured & Indicated Resource, while the lessor Indicated Resource category was redu
Slide 32: Stratford Energy Hub
Stratford Energy Hub ◦ The NSW government granted the Stratford Energy Hub project “Critical State Significant Infrastructure” status, recognising the importance of projects such as this to provide the long-duration storage required to decarbonise the NSW economy. ◦ The development application and a
Slide 33: Emissions Reporting
Emissions Reporting 3.00 0.12 ◦ We report our Scope 1 and 2 emissions in accordance with the NGER Act. Emissions Intensity per ROM tonne of coal mined Million tonnes of carbon dioxide equivalent 2.50 0.10 ◦ Scope 1 emissions are predominantly fugitive emissions and diesel consumption, while Scope 2
Slide 34: Yancoal Market Capitalisation and Daily Turnover
Yancoal Market Capitalisation and Daily Turnover ASX - A$/sh ADT 8.00 10.0 ◦ 1.32 billion shares for an approximate market 7.00 7.5 capitalisation of A$9.2 billion. ◦ Shares are fully fungible between the two 6.00 5.0 exchanges. 5.00 2.5 ◦ Hang Seng Composite Index and Stock Connect inclusion 13 Mar
Slide 35: Dual listed on ASX and HKEX - Shares fully fungible
Dual listed on ASX and HKEX - Shares fully fungible Summary share register (30-Jun-24) Yankuang Energy 822,157,715 62.26 % ◦ ~47% of shares held on ASX and Cinda * 101,601,082 7.69 % ~53% of shares held on HKEx. ◦ Average daily turnover 1H 2024: Management & YAL Trust 6,465,410 0.49 % ▪ ASX 2,800,00
Slide 36: Investor Relations Contact
Investor Relations Contact: Brendan Fitzpatrick, GM Investor Relations - Brendan.Fitzpatrick@yancoal.com.au Media Relations Contact: Matthew Gerber, GM Corporate Affairs - Matthew.Gerber@yancoal.com.au Additional information - www.yancoal.com.au Yancoal Australia Ltd Level 18, Tower 2, 201 Sussex St