New Hope Corporation Limited · ASX:NHC
New Hope — FY2018 Earnings Presentation
40 slides from New Hope's earnings presentation, Sep 18, 2018
Slide 1: Financial Results Release Full Year Ended 31 July 2018
NEW HOPE GROUP FINANCIAL RESULTS RELEASE FULL YEAR ENDED 41 JULY 2018 New Hope Corporation Tint (ASX code: NHC) newhopegroup.com.au
Slide 2: Results Overview
RESULTS OVERVIEW Robert Millner, Chairman
Slide 3: Results highlights
For personal use only Cash generated from ops Profit after income tax Total tonnes sold (before interest and tax) (before non regular items) $253M $434M 8.9M ▲39% from 2017 ▲5% from 2017 ▲96% from 2017 EBITDA Land rehabilitated (before non regular items) Final dividend $453M 8.0 cents 50ha ▲33% from
Slide 4: Financial Overview
FINANCIAL OVERVIEW Matthew Busch, Chief Financial Officer
Slide 5: Financial highlights
For personal use only Revenue from Profit before income tax Profit after income tax operations (before non regular items) (before non regular items) $1,079M $361M $ 253M ▲28% from 2017 ▲96% from 2017 ▲96% from 2017 EBITDA Earnings per share Final dividend (before non regular items) (before non regul
Slide 6: Profit and EBITDA summary
For personal use only Year Ended 31 July (A$ millions) 2018 2017 Variance EBITDA before non regular items 453.1 283.1 60% Non regular items before tax (147.0) 17.9 (921%) EBITDA after non regular items 306.1 301.0 2% Profit before tax and non regulars 360.8 184.3 96% Non regular items before tax (14
Slide 7: NPAT by segment
For personal use only NPAT $m $125.4 $127.4 130 115 100 85 $74.6 70 $58.5 55 40 25 10 ($0.2) ($4.4) -5 Coal mining QLD Coal mining NSW Oil and gas 2018 2017 Please refer to Appendix for reconciliation of Non IFRS Financial Information 7 FINANCIAL RESULTS RELEASE | FULL YEAR ENDED | 31 JULY 2018
Slide 8: NPAT bridge 2017 to 2018
For personal use only NPAT $m 270 18.7 13.2 14.8 250 4.0 49.3 230 210 66.1 4.5 8.2 190 252.6 170 150 130 110 128.7 90 70 Actuals QLD Revenue QLD QLD mining NSW Revenue NSW Revenue NSW strip ratio Bridgeport FX and Other Actuals 31 July 2017 AUD Price rehabilitation Costs AUD Price Volume oil revenue
Slide 9: EBITDA bridge 2017 to 2018
For personal use only EBITDA $m 26.7 21.2 380 5.8 70.4 320 94.5 6.4 6.8 260 360.8 200 140 184.3 80 Actuals QLD Revenue QLD rehabilitation QLD mining NSW Revenue NSW Revenue NSW strip ratio Bridgeport Actuals 31 July 2017 AUD Price movements FX and other AUD Price Volume oil revenue 31 July 2018 Plea
Slide 10: Cash movement
For personal use only A$m 433.9 1.1 51.7 680 14.2 23.9 99.7 580 480 380 480.0 280 180 236.9 80 Actuals Operating cashflows Interest, tax, PPE Burton Exploration Dividends Actuals 31 July 2017 FX and other 31 July 2018 10 FINANCIAL RESULTS RELEASE | FULL YEAR ENDED | 31 JULY 2018
Slide 11: Colton project impairment and WICET charges
For personal use only • The geological model was externally reviewed and resources WICET Charge Contract Price per Tonne updated to be compliant with 2012 JORC code 220% • It is not anticipated that a reserve is capable of being recognised under the 2012 JORC code 200% • It is considered that the re
Slide 12: Economic contribution distribution
For personal use only $1,400 $1,370.1 $1,300 Federal Government $1,200 ($1,374.8 million) State Government ($147.2 million) $800 $762.8 $675.7 $685.1 Local Government $700 ($124.0 million) $595.9 $600 $561.6 $569.4 $560.5 Employees $496.6 $503.8 $500 ($461.1 million) $400 Capital ($957.4 million) $3
Slide 13: Dividends FY2009-FY2018
For personal use only $700 $400 $350 $300 $257.5 $250 $679.7 $215.9 $197.2 $200 $150 $131.8 $132.9 $99.7 $100 $78.9 $66.5 $49.9 $50 $- FY2009 FY2010 FY2011 FY2012 FY2013 FY2014 FY2015 FY2016 FY2017 FY2018 Ordinary Dividend Special Dividend 13 FINANCIAL RESULTS RELEASE | FULL YEAR ENDED | 31 JULY 201
Slide 14: Safety and Sales Performance
SAFETY AND SALES PERFORMANCE Andrew Boyd, Chief Operating Officer
Slide 15: Total Recordable Injury Frequency Rate
For personal use only Quarterly Total Recordable Injury Frequency Rate (TRIFR ) 35 30 25 20 15 10 5 0 TRIFR Linear (TRIFR) 15 FINANCIAL RESULTS RELEASE | FULL YEAR ENDED | 31 JULY 2018
Slide 16: Coal sales volumes and production
For personal use only New Acland Coal sale volumes 4.5Mt ▼2% from 2017 EXPORT Total tonnes produced 8.6Mt Jeebropilly ▲5% from 2017 0.7Mt 9.0Mt In line with 2017 ▲5% from 2017 DOMESTIC Bengalla (40%) 3.8Mt 0.3Mt ▼25% from 2017 ▲10% from 2017 16 FINANCIAL RESULTS RELEASE | FULL YEAR ENDED | 31 JULY 2
Slide 17: For personal use only
For personal use only
Slide 18: Bengalla
For personal use only • New Hope share of saleable coal production 3.8Mt • Profit before income tax of $181.9 million • Cash contribution since 1st March 2016 $322.7 million (before tax) • Continued focus on operational efficiency • Commencement of new water management and diversion project • Resolv
Slide 19: New Acland Stage 3
For personal use only • Investigating options to extend Stage 2 mining operations • Currently working through community consultation, economic viability and operational considerations • Seeking to avoid gap in production between Stage 2 and 3 to safeguard existing workforce – 288 FTE, around 500 con
Slide 20: Jeebropilly and rehabilitation
For personal use only • Jeebropilly Mine last coal expected before end of New Hope Group Ipswich land holdings (shown in orange) calendar 2019 • 459ha rehabilitated, cattle grazing on western areas of the mining lease for more than 15 years • FY2019 focus on Finishing Well • Introduction of monitori
Slide 21: Queensland Bulk Handling terminal
For personal use only • 6 years Lost Time Injury Free • One of Australia’s most efficient coal terminals • Implemented technology that provides remote and semi-automated inbound transfer systems • Maximised customer throughput through flexible work practices and stockpile availability • Providing re
Slide 22: Dozer tonnes per hour improvement
For personal use only Dozer Tonnes Per Hour Improvement 70 60 50 40 30 52.1 45.9 20 40.8 39.9 10 18.9 13.8 0 0 FY12 FY13 FY14 FY15 FY16 FY17 FY18 Baseline 22 FINANCIAL RESULTS RELEASE | FULL YEAR ENDED | 31 JULY 2018
Slide 23: Acland Pastoral
For personal use only • 180ha of rehabilitated mined land handed over to pastoral operations • Completion of a five year cattle grazing trial on rehabilitated mined land shows cattle on mined land perform as well as, or better, than cattle on unmined land • Continued to build size and quality of bre
Slide 24: Bridgeport oil production
For personal use only 400,000 35,000 350,000 30,000 • Record production performance 373,875 barrels • 21% increase in oil production 300,000 25,000 • 56% increase in revenue Revenue (A$'000) 250,000 Production (bbls) • EBITDA contribution of $8 million 20,000 • Continued donation of water to local l
Slide 25: Community and economic contribution
For personal use only Over the last five years… Continued access to STEM education New Hope and LifeFlight’s rural safety partnership tailored for students Taxes paid to Payments made federal to employees government^ $298.9M $251.4M Payments for Donations and goods & services sponsorships $1.9B* $2.
Slide 26: Projects
PROJECTS Managing Director and Chief Executive Officer, Shane Stephan
Slide 27: Burton-Lenton project
For personal use only • Burton purchase completed November 2017 • Combined project including former Burton Mine and New Hope’s neighbouring Lenton Project • 90% joint venture participant • Even split of coking/thermal coal • 380 million tonne resource* • ~1.5 million tonne per annum for approx. 16 y
Slide 28: Surat Basin projects
For personal use only • 1 billion tonnes of thermal coal resource* • Four project areas - Elimatta, Collingwood, Taroom and Woori • To meet anticipated market demand in mid 2020’s • Pre-Feasibility Study progressing • Elimatta Mining Lease application advancing • Resource definition drilling commenc
Slide 29: For personal use only
For personal use only
Slide 30: Company history
For personal use only 1952-1980 • New Hope commenced operations in Ipswich, Queensland in 1952 • Commenced the West Moreton mining operations at Jeebropilly Mine in 1982 1980-1990 • Acquired 50% stake in QBH in 1983 • Interest acquired in PT Adaro Indonesia in 1989 • Purchased the Rhonnda Colleries
Slide 31: Bengalla transactions
For personal use only Second Bengalla $160 Transaction announced for $140 $860m First Bengalla Bengalla Transaction Transaction #1 $120 announced for completes $865m $100 $80 $60 $40 $20 $0 31 FINANCIAL RESULTS RELEASE | FULL YEAR ENDED | 31 JULY 2018
Slide 32: Asian thermal coal imports
For personal use only • Chinese coal importers currently have >20mt/month of Asian Thermal Coal Imports (Mt) import quotas remaining this year, compared with actual imports of 25mt/month in Jan-July 2018 1,400 • China’s thermal power sector recorded earnings of 1,200 RMB11.82bn ($1.73bn) in the firs
Slide 33: Thermal coal import demand by country
For personal use only (imports Mt) • Thermal coal exports from Australia in Jan-July fell 5% or 2.61mt year on year to 45.7mt from 48.48mt, while imports Country 2017 2020 2025 2030 Growth from Indonesia fell 13% or 2.51mt year on year to 16.33mt from 18.83mt China 188 175 188 194 6 India 137 155 20
Slide 34: Thermal coal exports and Europe
For personal use only • Australia’s 5,500 NAR is making its way to Europe – attractive because of its relatively low sulphur and its ability to blend with Illinois Basin coal • Australia has not shipped thermal coal to Europe since August 2016 • According to South Africa’s Department of Energy’s new
Slide 35: Well positioned to meet Asian energy demand
For personal use only New Hope is well positioned to meet the growing energy demands of its Asian customers Coal operations Projects and development Growing Developing Lenton Joint Obtaining approvals to meet Improving safety performance production levels Venture Burton Mine future demand Seeking to
Slide 36: Disclaimer
For personal use only Disclaimer IMPORTANT: The information in this document has been provided to you for information only by New Hope Corporation Limited (“NHC”) and is subject to change without notice. Nothing contained in this document constitutes investment, legal, tax or other advice. The infor
Slide 37: For personal use only
For personal use only
Slide 38: EBIT and EBITDA reconciliation
For personal use only Year Ended 31 July (A$ millions) 2018 2017 Variance (%) Profit after tax 149.5 140.6 6% Income tax expense (64.3) (61.6) 4% Profit before income tax 213.8 202.2 6% Non regular items before tax (147.0) 17.9 (922%) Profit before income tax and non regular items 360.8 184.3 96% In
Slide 39: Net profit after tax reconciliation by segment
For personal use only (A$ million) Coal Mining QLD Coal Mining NSW Oil and Gas Total Year Ended 31 July 2018 Net profit / (loss) after tax 22.3 127.4 (0.2) 149.5 Non regular items after tax: Impairment of property, plant and equipment (0.6) - - (0.6) Impairment of coal exploration and evaluation ass
Slide 40: Earnings per share reconciliation
For personal use only Year Ended 31 July (cents per share) 2018 2017 Basic earnings per share (cents) (before non regular items) 30.4 15.4 Impairment of property, plant and equipment (0.1) - Impairment of coal exploration and evaluation assets (11.1) - Reversal of impairment of coal to liquids facil