Midway — H1 2019 Earnings Presentation
24 slides from Midway's earnings presentation, February 2019
Slide 1: Full year result – 1H19 Analyst and Investor Presentation
Full year result – 1H19 Analyst and Investor Presentation February 2019
Slide 2: Disclaimer
Disclaimer This presentation has been prepared by Midway Limited ACN 005 616 044 (Midway or the Company). The information contained in this presentation is current at the date of this presentation. The information is a summary overview of the current activities of the Company and does not purport to
Slide 3: Financials 1H19
Financials 1H19 Midway
Slide 4: Performance Overview
Performance Overview Strong underlying performance in 1H19 results • 1H19 EBITDA – S(1) of $12.2M (1H18: $6.5M) • Net profit before tax was $7.3M and NPAT was $5.6M Revenue $124.2M +45.8% • Favorable sales price increase of $12 USD / BDMT on average over the pcp • Bone dry % increased over prior cor
Slide 5: Financial Performance – 1H19
Financial Performance – 1H19 $Am 1H19 1H18 % Change Sales Revenue 124.2 85.2 45.8% Other Income 2.6 2.0 30.0% Equity Accounted Share of 2.2 1.2 83.3% Profits Operating Costs (116.8) (81.9) (42.6%) EBITDA – S(1) 12.2 6.5 87.7% Significant items(2) 2.7 - - Net fair value gain on 13.8 - - biological as
Slide 6: Financial Performance – 1H19
Financial Performance – 1H19 Midway Group EBITDA ($m) 20 18 16 14 1.0 12 1.0 3.3 10 1.9 0.2 4.2 8 6 12.2 4 0.4 5.3 6.5 2 0 1H18 Volume Price FX Bone Dry JV (SWF) Supply PMP Other 1H19 % costs restructure 6
Slide 7: Segment contribution
Segment contribution (1) Forestry logistics includes a negative contribution in 1H19 relating to the startup activities of SLS and BGP due to some teething problems and is expected to contribute fully in FY20 (2) Contribution from Ancillary represents the margin on the third party woodfibre trading
Slide 8: Cash Flow – 1H19
Cash Flow – 1H19 $Am 1H19 1H18 $Am Change Operating Cash Flow (13.7) (11.2) (2.5) Investing Cash Flow (15.7) (15.2) (0.5) Financing Cash Flow 23.6 13.7 9.9 Net Change in Cash (5.8) (12.7) 6.9 Net Debt(1) 36.2 49.9 (13.7) (1) Net debt excludes the Strategy financial liability as this is not taken int
Slide 9: Balance Sheet – 1H19
Balance Sheet – 1H19 $Am 1H19 FY18 $Am Change Total Current Assets 62.9 52.9 10.0 Total Non-current Assets 206.7 135.4 71.3 Total Assets 269.6 188.3 81.3 Total Current Liabilities 43.3 37.0 6.3 (1) Non-current borrowings 34.5 35.4 (0.9) Total Non-current Liabilities 87.3 52.1 35.2 Total Liabilities
Slide 10: New business activities
New business activities • On 15 October 2018, the Company made two acquisitions in Western Australia (WA): – 100% of Softwood Logging Services (SLS), a harvest and haul business in WA. SLS provides Midway with access to equipment, management expertise and contracts for the harvesting and delivery of
Slide 11: Investing $17 million on the Tiwi Islands
Investing $17 million on the Tiwi Islands The investment ($12.0M 1H19) has been used to acquire additional production and port assets on Melville Island that will increase woodfibre production and deliver cost efficiencies To date this has entailed acquiring the existing woodfibre stockpile, pur
Slide 12: Strategy and Outlook section
Strategy and Outlook section
Slide 13: Strategic priorities
Strategic priorities Good progress continues to be Increasing EBIT over time: made with our strategic priorities 1. EXPANSION OF EXISTING BUSINESS Midway continues to assess opportunities to better utilise existing facilities and acquire Growth of planation management and woodfibre processing bu
Slide 14: Overall volume growth with changing mix
Overall volume growth with changing mix Facility Volumes FY2017 FY2018 FY2019 FY2020 FY2021 FY2022 (000’s GMT) Geelong 1,413 1,223 1,191 1,000 900 700 Portland 1,545 1,448 1,559 1,450 1,200 1,000 Brisbane 292 284 264 380 480 550 Melville Island 197 229 340 400 500 Tasmania1 135 270 450 600 800 Weste
Slide 15: Outlook for FY19
Outlook for FY19 Positive outlook • On track to meet the current analyst consensus EBITDA forecast range before significant items Adoption of new accounting standards • Accounting changes with the introduction of AASB 15 will impact balance sheet and statutory NPAT (see attachments) however will not
Slide 16: Attachments
Attachments Midway
Slide 17: New accounting standards - impacts
New accounting standards - impacts Key impacts – AASB 15 Revenue from contracts with customers • The Strategy arrangement entered into (disclosed in Appendix 4D note 2) to repurchase hardwood trees previously sold is deemed a financing arrangement as a result of Midway’s obligation to repurchase the
Slide 18: Australasian Growth Opportunities
Australasian Growth Opportunities Plantation management Further expansion of Midway’s position in the supply chain to reduce operational and market risks and capture additional margins New and expanded areas of plantation management in Australia, South East Asia and New Zealand Harvesting and lo
Slide 19: Midway's key business activities
Midway’s key business activities Key areas of expertise Plantation and land Harvesting and logistics Processing and materials Marketing and shipping Management • Existing freehold estate • Extensive experience in • Management of woodfibre • Market most of own • Experienced plantation Contract manage
Slide 20: Strategically located port and processing facilities
Strategically located port and processing facilities Five Key Export Ports QCE Brisbane Only woodfibre exporter from Brisbane Port – provides geographic and market diversity 15 year lease on a four ha site with the Port of Brisbane for producing, storing & loading GrainCorp provides toll ship
Slide 21: Positive pricing outlook
Positive pricing outlook Hardwood Chip Imports Volume, 2008-2017 (‘000 BDMT) • Demand for woodfibre in the Asia-Pacific region is expected 14,000 Japan China to continue to grow with most shipments bound for China 12,000 and Japan 10,000 8,000 • China demand has exceeded Japan since 2017, while 6,00
Slide 22: Board of Directors – overseen strong growth
Board of Directors – overseen strong growth Greg McCormack Founding Director of Midway in 1980 and has a long-term commitment to the Australian forest products industry, holding senior positions Non-Executive Chairman with both the National and Victorian Association of Forest industries (having serv
Slide 23: Senior management team – extensive experience
Senior management team – extensive experience Stephen Roffey Mr Roffey joined Midway in 1994 and holds forestry qualifications. He previously held the position of CEO between June 2012 and General Manager – Marketing and February 2013. He then commenced his duties and role as the General Manager – M
Slide 24: Questions ?
Questions ? Midway