Midway — H1 2017 Earnings Presentation
22 slides from Midway's earnings presentation, March 2017
Slide 1: Analyst and Investor Presentation 1HFY17
Analyst and Investor Presentation 1HFY17 March 2017 Tony Price Managing Director & CEO, Midway Limited
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: A leading woodchip exporter
A leading woodchip exporter Hardwood woodchip capacity ~4.0 million GMT per annum Listed in December 2016, ASX: MWY Softwood woodchip capacity ~0.4 million GMT per annum Produces and exports high quality woodfibre, Export Facilities headquartered in Geelong Wood supply area Railway Key custome
Slide 4: Solid interim result
Solid interim result 1HFY17 in line with expectations • Revenue: $88.0m • Pro forma# EBITDA: $13.9m • Pro forma# NPAT: $8.7m • Interim dividend: 9cps, fully franked On track to deliver our full year forecast • Pro forma EBITDA: $28.1m • Pro forma NPAT: $16.5m PCP variation as expected • No softwood
Slide 5: Good contributions from all businesses
Good contributions from all businesses Revenue EBITDA NPAT Comments $Am 1H16 1H17 1H16 1H17 1H16 1H17 Impacted by poor weather conditions. Midway 88.4 67.5 22.0 10.4 15.0 5.4 Midway 100% Timing of key shipments delayed slightly. SWF Continues to perform steadily in line with Midway 51% 42.3 40.8 4.6
Slide 6: Strategic Priorities and Outlook
Strategic Priorities and Outlook March 2017
Slide 7: Strategic Priorities
Strategic Priorities EBIT over time: 1. OPERATING EFFICIENCIES • Economies of scale • Margin expansion • Favourable demand/ supply dynamics 2. EXPANSION OF EXISTING BUSINESS • Development of Hardwood and Softwood log exports from Brisbane • South West Fibre 50/50 JV • Existing infrastructure expansi
Slide 8: Second Half Outlook
Second Half Outlook On track for full year forecast • Conservative management of $A exposure • Secure timber supply arrangements • Solid export sales contracts • Committed vessel program • Continued focus on operational efficiency • Subject to FX rate and shipment timing 8
Slide 9: Appendix 1 Financial Analysis
Appendix 1 Financial Analysis
Slide 10: Financial Performance
Financial Performance $Am 1H16 1H17 % Change Sales Revenue 109.0 88.0 (19.3) Other Income 1.9 1.8 (5.3) Operating Costs (93.5) (77.5) 17.1 EBITDA 23.0 10.8 (53.0) Depreciation and (1.7) (1.7) 0.0 Amortisation EBIT 21.3 9.1 (57.3) Finance expense (1.0) (0.7) 30.0 Pre-Tax Profit 20.3 8.4 (58.6) Tax Ex
Slide 11: Cash Flow
Cash Flow $Am 1H16 1H17 $Am Change Operating Cash Flow 20.2 (2.5) (22.7) Investing Cash Flow (1.3) 0.8 2.1 Financing Cash Flow (20.0) (4.9) 15.1 Net Change in Cash (1.1) (6.6) (5.5) Net Debt 2.1 26.5 (24.4) Interest Cover 21.9 12.7 (9.2) 11
Slide 12: Balance Sheet
Balance Sheet $Am 1H16 1H17 $Am Change Total Current Assets 45.1 33.5 (11.6) Total Non-current Assets 172.5 120.4 (52.1) Total Assets 217.6 154.0 (63.6) Total Current Liabilities 18.0 15.7 (2.3) Long Term Debt 29.7 30.5 0.8 Total Non-current 62.7 45.0 (17.7) Liabilities Total Liabilities 80.7 60.8 (
Slide 13: Risk management
Risk management Exposure to foreign exchange rates • Active hedging policy in place • Aim to reflect the movement in the AUD:USD rate in timber purchase prices • Timber supply costs are negotiated regularly. Vessel timing • Focused on managing vessel scheduling to match production and sales Customer
Slide 14: Appendix 2 Overview of Company
Appendix 2 Overview of Company
Slide 15: Largest Australian processor of woodchips
Largest Australian processor of woodchips A leading company in the Australian Overview of Midway’s business activities forestry sector, primarily involved in the production and export of high quality woodchip fibre to producers of pulp, paper and associated products in China and Japan Founded in
Slide 16: Strategically located port and processing facilities
Strategically located port and processing facilities Hardwood woodchip capacity ~4.0 million GMT per annum QCE Brisbane Softwood woodchip capacity ~0.4 million GMT per annum Sole woodchip exporter from Brisbane Port – Export Facilities provides geographic and market diversity Wood supply area Rail
Slide 17: Supply deficit expected in medium term
Supply deficit expected in medium term Asian hardwood chip balance forecast – demand to outstrip supply 2020 - 2030 Demand is forecast to be relatively Asian Hardwood Chip Demand & Supply Forecast (‘000 BDMT) stable in the short term, but supply 24,000 500 is expected to reduce over the 94 medium
Slide 18: Committed supply of raw materials and Strategic Alliance
Committed supply of raw materials and Strategic Alliance There is a substantial area of plantations in the catchments of Midway’s processing facilities Midway has a number of short and long term (1 year to 10 year) agreements in place with a number of large plantation managers in each of our opera
Slide 19: A long history of growing sales and customer base
A long history of growing sales and customer base Growth over the last 10 years has been driven through new capital investment Midway total export volumes since 1986 (million GMT) – ~18% CAGR since 1986 3.00 2.92 Geelong Portland Brisbane 2.18 1.66 1.63 1.46 1.34 1.23 1.23 1.08 1.07 0.99 0.97 0.88 0
Slide 20: 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 Non-Executive Chairman industry, holding senior positions with both the National and Victorian Association of Forest industries (having serv
Slide 21: Management team – over 15 years average service
Management team – over 15 years average service Tony Price See previous slide Chief Executive Officer Stephen Roffey Mr Roffey joined Midway in 1994 and holds forestry qualifications. He previously held the position of CEO Development Manager between June 2012 and February 2013. He then commenced hi
Slide 22: Midway Limited contact details
MIDWAY LIMITED ACN 005 616 044 10 The Esplanade, North Shore www.midwaylimited.com.au Tony Price Sophie Karzis Chief Executive Officer Company Secretary T: +61 3 5277 9255 T: +61 3 9286 7500 E: tprice@midway-pl.com.au E: sk@ccounsel.com.au