Channel Infrastructure Nz Limited · NZX:CHI
Channel Infrastructure Nz — FY2023 Earnings Presentation
27 slides from Channel Infrastructure Nz's earnings presentation, Feb 29, 2024
Slide 1: Financial Results
Financial Results For the 12 months ended 31 December 2023 29 February 2024
Slide 2: Important Information
Important Information • This presentation contains forward looking statements concerning the financial • In light of these risks, results could differ materially from those stated, implied or condition, results and operations of Channel Infrastructure NZ Limited (hereafter inferred from the forward-
Slide 3: Highlights and Operating Update
Highlights and Operating Update Rob Buchanan Chief Executive Officer
Slide 4: 2023 Financial Highlights
2023 Financial Highlights $130.7m $87.2m $34.1m Total Revenue EBITDA from continuing operations Net Profit Before Tax from Continuing (August Guidance: $128 - $130m) (August Guidance: $84-$88m) Operations $10.5m $61.8m 10.5cps Total Ordinary Dividend 1.5cps Special Dividend Stay-in-business capex No
Slide 5: 2023 Highlights
2023 Highlights Full year throughput of 3.4 billion litres, slightly ahead of Envisory’s fuel demand outlook, driven by growing jet fuel demand Terminal fees exceeded the take-or-pay revenue level, reflecting strong throughput and higher ancillary charges $87.2m EBITDA and $61.8m Normalised Free Cas
Slide 6: Continued investment in safety culture
6 Continued investment in safety culture Process Safety Incidents 6.0 • Safety is a foundation of our world-class operator ambition with a focus on operational discipline and safety critical risk 5.0 management 4.0 3.0 • Partnered with Safety Futures in 2023 for implementation of their Safety Leader
Slide 7: Conversion and Private Storage substantially complete
Conversion and Private Storage substantially complete Shutdown Shutdown and conversion substantially complete, on time and on Terminal and private storage cost phasing and budget, in environment of a pandemic, supply and labour shortages, conversion major weather events, and high inflation Terminal
Slide 8: Fuel volumes approaching pre-Covid levels
Fuel volumes approaching pre-Covid levels Pipeline and Truck Loading Facility volumes ML • FY23 Pipeline and Truck Loading Facility volumes up 19% on FY22[1] 1,000 • continued strong recovery in aviation demand now c.92%[2] of pre- 800 251 280 249 249 263 Covid volumes 600 257 258 222 283 400 275 28
Slide 9: Strategic real estate with significant repurposing potential
Strategic real estate with significant repurposing potential • Freeing up more space for further repurposing and site restoration opportunities • Seadra Energy has purchased option (US$4.5m of option payments received to date) to buy the decommissioned hydrocracking assets for US$33.875m[1] . Option
Slide 10: Good progress on transition and climate change targets
Good progress on transition and climate change targets 2022 TARGET KEY ACHIEVEMENTS PROGRESS TO DATE Just At least 90% of employees seeking new • Extensive program of workforce transition support over past 2 years Complete employment find new roles, or have • 99% of employees who left the business d
Slide 11: Financial Update
Financial Update Alexa Preston Chief Financial Officer
Slide 12: Financial Highlights
Financial Highlights Continuing operations delivered Revenue of $130.7m, EBITDA of $87.2m and normalised free cash flow[1] of $61.8m at the top end of August guidance Fixed and variable terminal fees exceeded take-or-pay, reflecting strong throughput and higher ancillary charges Private and addition
Slide 13: Strong financial result in line with guidance
Strong financial result in line with guidance Profit & Loss from continuing operations • FY23 Revenue of $130.7m reflects the first full year of terminal operations Period ended 31 December FY23 FY22 2H23 2H22 ($m) (12 months) (9 months) (6 months) (6 months) • 70 import shipments received and disch
Slide 14: Annual Revenue ($M)
Revenue reflects above take-or-pay and private storage Revenue from continuing operations • Terminal Fees exceeded take-or-pay commitments due to strong throughput and ancillary charges FY23 FY22 2H23 2H22 Period ended 31 December ($m) (12 months) (9 months[1]) (6 months) (6 months) • PPI adjustment
Slide 15: Disciplined cost management in an inflationary environment
Disciplined cost management in an inflationary environment Electricity and utility costs Operating costs from continuing operations • Energy and utility costs increased 2H23 versus 2H22 reflecting: FY23 FY22 2H23 2H22 Period ended 31 December ($m) (12 months) (9 months) (6 months) (6 months) • highe
Slide 16: Strong balance sheet, with leverage remaining in target range
Strong balance sheet, with leverage remaining in target range • Successful issue of $100m unsecured, unsubordinated retail bonds in Key balance sheet metrics November 2023, replacing subordinated notes. Balance of subordinated As at 31 December FY23 FY22 notes not exchanged in the bond offer ($54.9m
Slide 17: Strong and Stable Cash Flows
Strong and Stable Cash Flows Net Debt Movement • Strong operating cash flow of $90m fully funded the conversion spend and capex in FY23 $'M 42 300 (90) 17 • Significant conversion spend undertaken in FY23, with a total of c.$57m spend 50 11 28 remaining over FY24-FY27 250 200 • Normalised Free Cash
Slide 18: Continued investment for resilience and growth
Continued investment for resilience and growth Capital expenditure • Import terminal system capex lower in FY23 as FY22 included tank conversion and bund works Period ended 31 December ($m) FY23 FY22 • Four tanks undertook maintenance turnaround in FY23 (FY22: 3) in line with Import Terminal System
Slide 19: FY24 Guidance and outlook
FY24 Guidance and outlook • FY24 Revenue will benefit from continued growth in jet fuel volumes, PPI escalator of 2.1% and private storage FY24 EBITDA Guidance at a full year run rate. FY24 last full year of Wiri lease revenue (expires February 2025) • Operating expenditure expected to be broadly fl
Slide 20: Strategy Update
Strategy Update Rob Buchanan Chief Executive Officer
Slide 21: All 2023 priorities delivered
All 2023 priorities delivered - Long-term Asset Management Plan in place - Modern workplace and cloud transformation delivered simplifying operations and technology systems Safe, reliable, and cost-efficient terminal operation and maintenance - Independent review of site safety management system com
Slide 22: Refreshed strategy: helping fuel NZ's future to 2050 and beyond
Refreshed strategy: helping fuel NZ's future to 2050 and beyond OUR VISION World-class energy infrastructure company OUR PURPOSE Delivering resilient infrastructure solutions to meet changing fuel and energy needs OUR STRATEGIC PRIORITIES World-Class High Performance Grow from Support Energy Discipl
Slide 23: Progress towards world-class
Progress towards world-class Supporting long-term asset resilience and positioning Channel as a partner of choice for fuel infrastructure Systems Infrastructure People and High Performance and Processes and Performance Capabilities Culture Regular customer Long term asset Increasing resourcing Regul
Slide 24: Pursuing growth opportunities
Pursuing growth opportunities Supporting fuel resilience in New Zealand • Channel welcomes the Government’s focus on enhancing New Zealand’s fuel security, committed to working with Government to ensure fuel supply chain resilience • Submitted a response to support the Government’s Onshore Diesel St
Slide 25: 2024 measures of delivery aligned to refreshed strategy
2024 measures of delivery aligned to refreshed strategy MEASURE STRATEGIC PILLAR TARGET New Zealand’s Safely home, every day Lost Time Injuries Zero infrastructure partner of choice Diverse and engaged team Lift in employee engagement score +4 percentage points[1] Reliable infrastructure Pipeline re
Slide 26: Appendix
Appendix
Slide 27: Discontinued Operations
Discontinued Operations Profit & Loss from discontinued operations • FY23 Revenue from discontinued operations principally reflects revenue from scrap metal sales, proceeds from historical legal claims and gains on Period ended 31 December ($m) FY23 FY22 the sale of NZ carbon credits Revenue 6.9 70.
Channel Infrastructure NZ — FY2023 Earnings Presentation on 6ix