Thungela Resources Limited · JSE:TGA
Thungela Resources — H1 2021 Earnings Presentation
28 slides from Thungela Resources's earnings presentation, Aug 11, 2021
Slide 1: 2021 Interim Results
2021 Interim Results Presentation for the six months ended 30 June 2021 1
Slide 2: Cautionary Statement
CAUTIONARY STATEMENT Disclaimer: This presentation has been prepared by Thungela Resources Limited (“Thungela”) and comprises the written materials/slides for a presentation concerning Thungela. By attending this presentation and/or reviewing the slides you agree to be bound by the conditions set ou
Slide 3: Agenda
RESULTS OVERVIEW 01 July Ndlovu OPERATIONAL PERFORMANCE 02 July Ndlovu FINANCIAL PERFORMANCE 03 AGENDA Deon Smith OUTLOOK AND CONCLUSION 04 July Ndlovu Q&A 05 Questions through Webinar and Conference Call 3
Slide 4: Results Overview
Results Overview July Ndlovu | Chief Executive Officer 4
Slide 5: H1 2021 Key Features
H1 2021 KEY FEATURES SUCCESSUL TRANSITION SAFETY & HEALTH FOCUS STRONG EARNINGS Listed on JSE and LSE on 7 June Loss of life incident in H1 Operating Profit of R990m and One month of economic and Comprehensive COVID-19 Adjusted EBITDA1 of R1.9bn operational independence response ROBUST FINANCIAL PRO
Slide 6: Safety
SAFETY Key Safety Metrics Loss of life incident 45 2.5 42 • With deep sadness we report tragic passing of Mr. Moeketsi Mabatla during an evacuation following an 40 underground fire at Goedehoop colliery on 23 June 34 2 2021 35 • Fire emanated from trackless mobile machine 1.85 30 30 1.66 1.5 Commitm
Slide 7: Comprehensive Response to COVID-19 Pandemic
COMPREHENSIVE RESPONSE TO COVID-19 PANDEMIC We continue to mount a resilient and effective response • Development of COVID-19 critical controls for on-site management of the pandemic • Procedures include testing, ensuring that social distancing can be maintained in the workplace and detailed contact
Slide 8: Successful Listing
SUCCESSFUL LISTING Listing of Thungela Resources Limited Demerger preparation and regulatory approval Thungela Resources Limited on JSE (TGA) • Internal Restructure commenced in 2020 and completed R/share immediately prior to Demerger 50 • Resultant comparative complexities necessitated having to pr
Slide 9: Creating Shared Value
CREATING SHARED VALUE Thungela Community and Employee Partnership Plans Lasting benefits for stakeholders • Nkulo Community Partnership Plan • SACO Employee Partnership Plan • Each plan purchased 5% of the issued share capital Community Employee of SACO1 from Thungela immediately before the Partners
Slide 10: Internal Restructure
INTERNAL RESTRUCTURE Notes: 1. Thungela Operations Proprietary Limited (currently known as Anglo Operations Proprietary Limited until the formal name change) 10
Slide 11: Operational Performance
Operational Performance July Ndlovu | Chief Executive Officer 11
Slide 12: Export Production Volumes
EXPORT PRODUCTION VOLUMES Export Saleable Production (kt) – Pro Forma Performance -9% • Export saleable production decreased by 9% from 8,680 H1 2020 to H1 2021 • High-cost Bokgoni pit placed on care and 7,782 maintenance in H1 2021 7,107 3,068 • Offset partially by ramp-up of Navigation and 2,447 p
Slide 13: Export Production Volumes: Structure impact on IFRS vs. Pro Forma
EXPORT PRODUCTION VOLUMES Export Saleable Production (kt) Structure impact on IFRS vs. Pro Forma 7,782 • IFRS H1 2020 included only AAIC 1,064 7,107 • IFRS H1 2021 included Mafube from 1 April 2021 389 446 6,661 • Pro Forma adjustments made to reflect the current and forward-looking asset perimeter
Slide 14: Financial Performance
Financial Performance Deon Smith | Chief Financial Officer 14
Slide 15: Market Overview
MARKET OVERVIEW Benchmark and realised thermal coal prices (R/t) Export markets • Firmer demand from South Asian countries R/t underpinned by urbanisation and economic growth 1,700 1,600 • Supply constraints, including TFR challenges and 1,500 ongoing geopolitical tension between Australia and China
Slide 16: Export Equity Sales
EXPORT EQUITY SALES Export Equity Sales1 (kt) – Pro Forma Performance -8% • Export equity sales decreased by 8% 9,385 • Driven by lower export saleable production volumes 7,188 6,589 Impact of TFR challenges • Railings in H1 2021 lower than planned due to performance challenges experienced by TFR •
Slide 17: Revenue
REVENUE Revenue (Rm) Structure impact on IFRS vs. Pro forma • IFRS H1 2020 includes only AAIC 10,157 10,046 1,030 628 111 • IFRS H1 2021 includes Mafube from 1 April 2021 • Pro Forma adjustments made to reflect the current 3,053 and forward-looking asset perimeter 8,200 694 Price • Benchmark prices
Slide 18: FOB Cost per Export Tonne
FOB COST PER EXPORT TONNE H1 2020 vs H1 2021 FOB cost per export tonne (R/t) - Pro Forma Cost performance • FOB cost per export tonne flat period-on-period 782 782 12 40 52 (R782/t) • High-cost tonnes removed at Bokgoni • Inflation includes incremental COVID-19 related cost • Productivity improvemen
Slide 19: Adjusted EBITDA
ADJUSTED EBITDA Adjusted EBITDA1 (Rm) Structure impact on IFRS vs. Pro Forma • IFRS H1 2020 includes only AAIC • IFRS H2 2021 includes Mafube from 1 April 2021 • Pro Forma adjustments made to reflect the current and forward-looking asset perimeter 1,375 Macro environment 1,977 89 1,888 • Realised pr
Slide 20: Net Profit After Tax
NET PROFIT AFTER TAX Adjusted EBITDA to Attributable Net Profit (Rm) - IFRS Profit impacted by non-cash items Adjusted EBITDA 2021 H1 1,888 • FV loss on derivative related to Capital Support Agreement is due to the sustained recovery of the Restructuring1 248 Benchmark coal price Cash items Net fina
Slide 21: Adjusted Operating Free Cash Flow
ADJUSTED OPERATING FREE CASH FLOW Adjusted EBITDA to Adjusted Operating Free Cash Flow (Rm) - IFRS Cash evolution 1,888 • 1 June 2021 ‘clean-slate’ as intercompany loan 340 extinguished prior to demerger – start of economic 248 and operational independence 20 • R2.5bn cash injection augmented by str
Slide 22: Capital Expenditure
CAPITAL EXPENDITURE Capital Expenditure (Rm) Thungela lens ~2,600 to 3,000 • Review and prioritisation of H2 2021 plans to deliver targeted capex savings • Process and reviews to reduce capital intensity underway – focus now on 2022 plans • Lifex capital project studies continue (Zibulo, Elders, Cly
Slide 23: Capital Allocation
CAPITAL ALLOCATION Capital Allocation Framework Capex • Continue to study projects - no decision on lifex projects expected before end 2022 • Capex spend and procurement efficiencies expected in 2021 • Looking at all opportunities in our portfolio to ensure that most accretive options are funded, wi
Slide 24: Outlook & Conclusion
Outlook & Conclusion July Ndlovu | Chief Executive Officer 24
Slide 25: Outlook
OUTLOOK Export Saleable Production (Mt) Export saleable production 16 • Export saleable production guidance maintained at 15-16 15Mt to 16Mt for full year in 2021 • Based on expectation of improved rail performance 2020A 2021F FOB Cost per export tonne (R/t, real) FOB cost per export tonne • FOB cos
Slide 26: Conclusion
CONCLUSION AIM TO BE A FATALITY- MARKET OPERATIONAL DELIVERY FREE BUSINESS Safety continues to be our number Expect strong price environment to Delivering on our production and one value continue into H2 cost targets will allow us to take advantage of price environment CAPITAL DISCIPLINE MONITORING
Slide 27: Q&A
thingela Q&A
Slide 28: Thank you
Thank you 28