Whitehaven Coal Limited · ASX:WHC
Whitehaven Coal — H1 FY2015 Earnings Presentation
32 slides from Whitehaven Coal's earnings presentation, Jan 30, 2015
Slide 1: First Half Results FY2015: Achieving a major milestone
For personal use only Whitehaven Coal Limited First Half Results FY2015 Achieving a major milestone Sydney, Australia 30 January 2015
Slide 2: Disclaimer
Disclaimer 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 For personal use only Achievements Safety Coal Outlook - IEA Summary Financials Sales & Production Operations Community Contribution Conclusion Appendices First Half FY2015 Results 3
Slide 4: Key first half achievements
Key first half achievements For personal use only Improved safety performance across all assets Record saleable coal production and sales Railed first coal from Maules three months ahead of schedule Maules Creek construction 87% complete Successfully completed the third longwall changeout at Narrabr
Slide 5: Safety performance
Safety performance For personal use only Introduction of Whitehaven’s “Safehaven Rules” in early 2014 is delivering improved safety performance confirmed by the significant decline in the TRIFR across the Group Achieved TRIFR rate of 9.49 below the NSW average of 15.35 Note: Data includes WHC employ
Slide 6: IEA forecasts – Thermal coal
IEA forecasts – Thermal coal For personal use only Global Thermal Coal Demand (Mt) 9000 8000 7000 6000 5000 4000 3000 2000 Global thermal coal demand is expected to 1000 grow from 6.8Bt in 2012 to 8.0Bt in 2019 a 0 growth rate of 2.4% 2012 2013 2015 2017 2019 United States Canada OECD Europe Oceania
Slide 7: IEA forecasts – Met coal
IEA forecasts – Met coal For personal use only Global Metallurgical Coal Demand (Mt) 1200 1000 800 600 Global metallurgical coal demand is 400 forecast the grow by 116Mt over the period, a growth rate of 1.5% 200 0 2012 2013 2015 2017 2019 Demand in the seaborne market is expected to grow by 64Mt ov
Slide 8: Financial highlights
Financial highlights For personal use only H1 H1 Headlines Comment FY2015 FY2014 Lower average coal price offset by higher sales EBITDA before significant items ($’m) 52.1 55.0 volume and reduced costs Impacted by impairment of MRRT goodwill EBITDA including significant items ($’m) (39.4) 51.1 f
Slide 9: First Half profitability
First Half profitability For personal use only Financial Performance - A$ millions H1 FY2015 H1 FY2014 Revenue 371.8 405.5 Other income 7.4 6.6 Operating expenses (186.9) (192.6) Coal purchases - (20.2) Selling and distribution expenses (including NSW Govt. royalties) (129.2) (131.0) Admin and other
Slide 10: Costs continue to be driven down
Costs continue to be driven down For personal use only H1 H2 H1 Average revenue per tonne was lower with the reduction FY2015 FY2014 FY2014 (1) in coal prices only partly offset by a weakening of the AUD Coal Sales (equity basis, excl. purchased '000t 4,713 3,913 4,302 coal) Average revenue (excl. p
Slide 11: Capital allocation
Capital allocation For personal use only Capital Investment (equity share) - $ Million H1 FY2015 H1 FY2014 Mine Capital Change to H1 2014 Open Cuts Sustaining 3.2 5.1 Narrabri Mains Development 18.4 7.1 Mine capex Narrabri Sustaining 2.3 2.5 Main roads development used over the LOM, increased in the
Slide 12: Balance sheet and capital management
Balance sheet and capital management For personal use only 31 Dec 2014 30 Jun 2014 $’m $’m Cash on hand 111.6 103.2 Senior secured bank facilities 850.0 625.0 Increase in interest bearing liabilities comprised drawings from the corporate debt facility to fund Maules Creek development ECA and finance
Slide 13: Financing – current and future
Financing – current and future For personal use only Current $1.25b facilities are a combination of term loan, revolver and guarantee facilities Current Facility Existing major facility matures in December 2016 Aim to arrange flexible debt structure – longer tenor and appropriate covenants Supportin
Slide 14: Coal sales
Coal sales For personal use only Equity sales increased to 4.7Mt and managed sales of 6.0Mt despite six week Narrabri longwall changeout Equity Basis – 000t H1 FY2015 H1 FY2014 Change Open Cuts (including purchased coal) 2,476 2,505 (1%) Narrabri 2,237 2,001 12% Whitehaven Total 4,713 4,506 5% White
Slide 15: Saleable coal production – new record
Saleable coal production – new record For personal use only First production from Maules Creek (pre-commercial), Narrabri production impacted by a six week longwall changeout in the half Managed Basis – 000t H1 FY2015 H1 FY2014 Change Open Cuts 2,563 2,296 12% Maules Creek 54 - n/a Narrabri 3,052 2,
Slide 16: Maules Creek construction 87% complete
Maules Creek construction 87% complete For personal use only First coal railed in mid-December following the completion of the rail line and by-pass circuit With the project is running several months ahead of schedule total capex is expected to be about $25 Mine million lower than the Infrastructure
Slide 17: Maules Creek railing commences
Maules Creek railing commences For personal use only Pre-commercial coal mining and railing began in mid-December, three months ahead of schedule 9 trains dispatched to Newcastle in December and first shipment in early January Coal railings to progressively increase and will average about one per da
Slide 18: Maules Creek mining progress
Maules Creek mining progress For personal use only Coal mining began in the Braymont and Onavale seams which contain high quality, low ash coal An additional excavator and trucks are being assembled and will increase the installed mining capacity to 6.0Mtpa from mid- March Completion of the construc
Slide 19: Maules Creek progress
Maules Creek progress For personal use only Initial coal sales from Maules Creek will be thermal coal priced with reference to SCOTA index pricing plus an energy adjustment. A significant portion of the first year’s production is already committed to sales Metallurgical coal production can commence
Slide 20: Narrabri – mining progress
Narrabri – mining progress For personal use only The longwall changeout was completed three days ahead of schedule with mining of LW04 commencing on 30 November To reduce the changeout time from 6 weeks to 5 weeks and reduce costs, orders have been placed for an additional shearer, beam stage loader
Slide 21: Narrabri automation
Narrabri automation For personal use only The image shows the profile of the panel floor in LW03 from the startup of the panel Significant improvement in the cutting horizon followed the introduction of the automated system The automation system is operating for LW04 panel Fully automated horizon Au
Slide 22: Vickery update
Vickery update For personal use only Approval granted by NSW Government in September Vickery Project Key Elements Details Location About 25kms north of Gunnedah Resources and Reserves Reserves of 204Mt contained within a Resource of 508Mt Whitehaven 100%. Seeking to form a Joint Venture by selling u
Slide 23: Community contribution
Community contribution For personal use only Whitehaven employed 761 people as at 31 December 2014 with 74% living in the region surrounding its operating mines Wages paid to employees in the region were over $65 million in FY2015 to 31 December 2014 Recruitment at Maules Creek progressively increas
Slide 24: Investment proposition – low cost growth
Investment proposition – low cost growth For personal use only Saleable Coal Production by Mine (Mt) Production is expected to more than 25.0 double by FY2018 as Maules Creek ramps up to its permitted capacity of 20.0 13Mtpa ROM coal 15.0 Saleable production in FY2015 is expected to be about 14Mt on
Slide 25: Focus for FY2015 and beyond
Focus for FY2015 and beyond For personal use only Maintaining focus on improving safety performance at all operations Increasing production at Maules Creek as additional equipment is added to the mining fleet Completing construction of Maules Creek ahead of schedule and under budget Ongoing recruitm
Slide 26: Thank you
For personal use only Thank you www.whitehavencoal.com.au
Slide 27: Appendices
For personal use only Appendices First Half FY2015 Results 27
Slide 28: Where we operate
Where we operate For personal use only Maules Creek (75%) • Reserves to support ~ 30 years • Permitted & Planned : 13 Mtpa ROM • SSCC, PCI and high energy thermal Narrabri North (70%) • Reserves to support ~ 25 years • Permitted : 8 Mtpa ROM • Planned : 6 Mtpa ROM • PCI & low ash thermal coals Tarra
Slide 29: Reconciliation - NPAT to Operating EBITDA
Reconciliation - NPAT to Operating EBITDA For personal use only A$ millions H1 FY2015 H1 FY2014 Net loss for the period attributable to members (77.9) (11.6) Add back: Significant items after tax 65.5 2.7 Net loss before significant items (12.4) (8.9) (Loss) / profit before net financial expense (85
Slide 30: Significant Items
Significant Items For personal use only A$ millions H1 FY2015 H1 FY2014 Included within the balances presented on the face of the Consolidated Statement of Comprehensive Income: Operating expenses: Suspension of mining activities and office closures - (2.0) Other expenses: Cost of terminating infras
Slide 31: Balance sheet at December
Balance sheet at 31 December For personal use only A$ millions 31 Dec - 2014 30 June - 2014 Cash 111.6 103.2 Current receivables 131.1 70.3 Other current assets 44.1 61.1 Current assets 286.8 234.6 Non-current receivables 23.8 29.7 Other non-current assets 4,106.1 4,018.2 Total assets 4,416.7 4,282.
Slide 32: Half year cash flow
Half year cash flow For personal use only A$ millions H1 FY2015 H1 FY2014 Cash from operations 54.1 78.3 Net interest and tax receipts / (payments) 19.1 (22.0) Net cash from operating activities 73.2 56.3 Capital investment (275.1) (140.9) Net cash used in investing activities (275.1) (140.9) Net pr