New Hope Corporation Limited · ASX:NHC
New Hope — Wilsons Virtual Rapid Insights Conference (May 2020)
27 slides from New Hope's conference presentation, May 28, 2020
Slide 1: Wilsons Advisory – New Hope Corporation Limited
WILSONS ADVISORY New Hope Corporation Limited (ASX code: NHC) Presented by Shane Stephan & Matthew Busch newhopegroup.com.au
Slide 2: Agenda
1. 1st Half Financial Year Summary – 3rd Quarter Update 2. COVID19 Risk Management Response 3. COVID19 Impacts on Coal Markets 4. Coal Prices 5. NAC03 Update 6. Outlook – Near term – Medium term 2
Slide 3: Half year highlights
Revenue from EBITDA Total tonnes sold (before non regular items operations 6.4M $618M $213M ▲ 42% from 2019 In line with 2019 ▼25% from 2019 Cash generated from ops Interim dividend TRIFR¹ (before interest, tax and acquisition costs) $167M 6cps 3.6 ▼25% from 2019 ▼64% from 2019 ▼41% from 2019 Please
Slide 4: Half Year Ended 31 January
Half Year Ended 31 January (A$ millions) 2020 2019 Variance Revenue from continuing operations 618.2 616.7 0.2% Lower coal prices per tonne (29% down on prior corresponding period) EBITDA before non regular items 212.6 285.2 (25%) have offset the benefits of higher sales volumes (42% up on prior cor
Slide 5: EBITDA by segment
$m 150 $126.6 125 $110.3 $110.9 100 75 50 $37.3 25 0.6 0 ($9.1) (7.8) -25 ($16.4) Coal NSW Coal QLD Other Treasury 2020 2019 Please refer to the Appendix for reconciliation of Non IFRS Financial Information ¹ Treasury profit before tax also included as reconciling item. 5
Slide 6: Coal price and revenue bridge
$m 44.1 105.9 310 76.5 280 52.8 250 19.3 6.4 220 190 A$ coal price A$ coal price ▼ 25% ▼ 31% 285.2 212.6 160 130 100 2019 QLD Revenue NSW Increased NSW Revenue NSW Revenue NSW Costs Other 2020 AUD Price ownership AUD Volume AUD Price Please refer to Appendix for reconciliation of Non IFRS Financial
Slide 7: Quarter and nine months production and sales
Quarter Ended Nine Months Ended Apr-20 Apr-19 Change Apr-20 Apr-19 Change (‘000t) (‘000t) (%) (‘000t) (‘000t) (%) Saleable Coal Production QLD 100% owned and operated 576 1,227 (53.0%) 2,443 3,527 (30.7%) NSW 80% owned operations** 1,706 1,686 1.2% 6,050 4,035 49.9% Total Saleable Coal Production 2,
Slide 8: COVID19 Risk Management Response
• Followed Government advice and that of our nominated medical advisor along with industry consultation groups. • Implemented a COVID management group to coordinate company wide response, site implemented risk management processes similar to standard hazard management processes. • Internal communica
Slide 9: Safety performance
• TRIFR has continued to decrease to 3.6 per million exposure hours currently, well below the Opencut Mining Industry of 6.3. • Queensland Bulk Handling (QBH) continued to build on its record of safe operations and is now over six years lost time injury free (LTI) while Bridgeport is over five years
Slide 10: Bengalla update
• New Hope’s share (equal to 6.05 million tonnes) of Bengalla’s production for the nine months ended 30 April 2020 up to 49.9% on the prior corresponding period. • Most recent quarterly production 21% lower than average of the prior two quarters due to mine sequencing, wet weather and a localised ge
Slide 11: New Acland update
• New Acland produced 2.44 million tonnes for the nine months ended 30 April 2020, a decrease of 30.7% on the prior corresponding period. • Production for the third quarter was 0.58 million tonnes compared to 1.23 million tonnes in the prior corresponding quarter down 53%. • Unit costs of production
Slide 12: Oil operations update
• Approximately 80,290 barrels of oil were produced in the third quarter down 14% on the equivalent quarter in 2019. • Forward capital and operating expenditures have been reduced due to the significant recent drop in oil price. • The firms drilling rig completed six workovers across the Kenmore, Bo
Slide 13: Coal prices
• Thermal coal prices were resilient until the end of Newcastle thermal coal prices March however fell quickly due to reduced $140 electricity demand across most markets. $120 • Thermal coal demand and price has dropped sharply since the beginning of April which will $100 negatively impact financial
Slide 14: Global power demand destruction
• Global power demand destruction more rapid Daily power consumption in April (YoY change, %) and greater than during GFC. • Some markets are delaying cargos, currently 0.0% fluid market conditions. -2.0% • China power consumption is currently higher than this time last year. -4.0% -3.0% -6.0% -5.4%
Slide 15: All markets and coal types affected by COVID
• All markets and coal types affected by COVID • Large scale redirection of trade in coal markets with Asian markets materially less impacted than Europe and the Americas. • Markets are extremely dynamic with demand in Vietnam and Taiwan strong, Korea firm and China recovering quickly. Source: Macqu
Slide 16: Positives and Negatives in the Current Thermal Coal Market
Positives and Negatives in the Current Thermal Coal Market Chinese industrial activity and power Uncertainty about consumption picking up, Supply is starting to Australia/China relations Japan’s pace of warmer weather than come out of the market recovery usual, coal stocks declining Korea, Vietnam a
Slide 17: Unit cost and revenue
Total FOB $ per tonne movement - 2016 - 2020 • Attached is a chart of the 170% Company’s unit cost and revenue on a total cost basis each half year 160% since the 1st half of 2016. 150% • It should be noted that unit costs in 140% this latest half year are the same as those from the 1st half of 2016
Slide 18: Source: CRU International Ltd & NHG Analysis
Source: CRU International Ltd & NHG Analysis 18
Slide 19: Queensland Economic Opportunity
Queensland Economic Opportunity NEW ACLAND MINE At 18 months 487 new jobs NEW JOBS ows sete At 6 months \ 187 new jobs created At 12 months At 3 months £ 258 new jobs 60 new jobs nth created created g AT APPROVAL AT 18 MONTHS ERS 761 WORKERS 274 WORI t> NEW HOPE 19 ZN NEW HOPE
Slide 20: New Acland Mine
• The resources sector has been a standout success story during the COVID19 lockdown managing to safely maintain sizeable workforces. • The resources sector is poised to create 12,000 jobs and pump more than $24billion in to the Queensland economy as we come out of lockdown. • Projects are waiting f
Slide 21: Coal operations – goal is safe production
New Hope is well positioned to meet the growing energy demands of its Asian customers Coal operations – goal is safe production Developing projects when markets demand Carefully budgeting resources Managing costs and risks Obtaining Acland Stage 3 to future projects with a risk Burton/Lenton across
Slide 22: Disclaimer
Disclaimer IMPORTANT: The information in this document has been provided to you for information only by New Hope Corporation Limited (“NHC”) and is subject to change without notice. Nothing contained in this document constitutes investment, legal, tax or other advice. The information in this documen
Slide 23: Appendices
APPENDICES
Slide 24: Half Year Ended 31 January
Half Year Ended 31 January (A$ million) 2020 2019 Variance Profit after tax 69.8 120.2 (42%) Income tax expense 23.6 57.2 (59%) Profit before income tax 93.4 177.4 (47%) Non regular items before tax 30.1 51.5 (42%) Profit before income tax and non regular items 123.5 228.9 (46%) Interest expense 10.
Slide 25: Half Year Ended 31 January (cents per share)
Half Year Ended 31 January (cents per share) 2020 2019 Variance Basic earnings per share (cents) (after non regular items) 10.4 14.4 (46%) Jeebropilly rehabilitation\ (1.8) - (100%) New Acland redundancies (0.5) - (100%) Recovery of Port costs 0.2 - 100% Oil exploration asset impairments (0.3) - (10
Slide 26: Half year ended 31 January 2020
Half year ended 31 January 2020 Coal Coal Other Treasury Total¹ (A$ million) NSW QLD Profit / (loss) before tax from continuing operations after 112.2 10.2 (21.4) (7.8) 93.4 non regular items Non regular items before tax: Jeebropilly rehabilitation - (21.0) - - (21.0) New Acland redundancies - (6.1)
Slide 27: Half year ended 31 January 2019
Half year ended 31 January 2019 Coal Coal Other Treasury Total¹ (A$ million) NSW QLD Profit / (loss) before tax from continuing operations after 88.7 113.3 (21.1) (3.8) 177.4 non-regular items Non-regular items before tax: Insurance proceeds ship-loader - 2.4 - - 2.4 Onerous contract and related exp
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