Salungano Group Limited · JSE:SLG
Salungano — FY2021 Earnings Presentation
29 slides from Salungano's earnings presentation, March 2021
Slide 1: Results Presentation for the Year Ended 31 March 2021
RESULTS PRESENTATION FOR THE YEAR ENDED 31 MARCH 2021 LAYING THE FOUNDATION TO GROW SUSTAINABLY
Slide 2: Disclaimer and Contents
DISCLAIMER AND CONTENTS This presentation is published solely for informational purposes and does not constitute investment, legal, tax or other advice nor is it to be relied upon in making an investment decision. Information contained herein has been Ref Title Slide taken from sources considered by
Slide 3: FY21 Operational and Financial Overview
FY21 OPERATIONAL AND FINANCIAL OVERVIEW COAL MINED COAL SALES REVENUE EBITDA 7.7Mt 7.9Mt R3.9 billion R569 million (FY20: 6.0Mt) (FY20: 6.3Mt) (FY20: R3.8 billion) (FY20: R332 million) NET LOSS CAPEX CASH GENERATED CASH GENERATED/SHARE R36 million R419 million R773 million 156 cents (FY20: R137 mill
Slide 4: FY21 Strategy Update
FY21 STRATEGY UPDATE • Navigate through COVID-19 • 100% recovery rate, and no work stoppages across all operations • New mining contractor appointed at VGF with minimal disruptions STABILITY • Roll-out of new operating model in Mining • New processing contractor appointed at VGF and Elandspruit • Re
Slide 5: FY22 Strategic Priorities
FY22 STRATEGIC PRIORITIES LAYING THE FOUNDATION TO GROW SUSTAINABLY Stability Sustainability Scalability Navigate through COVID-19 Continue to nurture a strong working relationship Effective organic growth through current greenfield • Health and well-being of employees, communities with Eskom and br
Slide 6: Wescoal Mining Segment
WESCOAL MINING SEGMENT
Slide 7: Health and Safety
HEALTH AND SAFETY Lost Time Injury (LTI) Performance Total Recordable Injury Frequency Rate (TRIFR) Performance 2.5 2.00 1.85 1.80 2 2 2 2 2 1.60 1.46 1.43 1.40 1.5 1.20 1.1 1.00 1.02 1 1.00 1 1 1 1 1 1.02 1.00 1.00 1 1.02 0.75 1 1 0.80 0.92 0.91 0.67 0.91 0.92 0.92 0.86 0.91 0.91 0.92 0.87 0.86 0.8
Slide 8: Vanggatfontein
VANGGATFONTEIN ROM Production and Sales (Kt) 497 419 376 386 367 332 267 280 244 234 247 239 240 249 220 221 230 207 196 178 177 188 153 167 Apr-20 May-20 Jun-20 Jul-20 Aug-20 Sep-20 Oct-20 Nov-20 Dec-20 Jan-21 Feb-21 Mar-21 ROM Sales Factors impacting production Key focus areas • VGF extension stra
Slide 9: Elandspruit
ELANDSPRUIT ROM Production and Sales (Kt) 265 256 256 264 258 253 252 240 237 240 223 188 192 185 193 178 183 175 178 159 167 161 168 67 Apr-20 May-20 Jun-20 Jul-20 Aug-20 Sep-20 Oct-20 Nov-20 Dec-20 Jan-21 Feb-21 Mar-21 ROM Sales Factors impacting production Key focus areas • Q3 and Q4 production r
Slide 10: Khanyisa
KHANYISA ROM Production and Sales (Kt) 120 108 111 95 91 91 87 80 74 68 58 38 Apr-20 May-20 Jun-20 Jul-20 Aug-20 Sep-20 Oct-20 Nov-20 Dec-20 Jan-21 Feb-21 Mar-21 ROM Sales Factors impacting production Key focus areas • Safety stoppages • Recovery of roof coal in the Khanyisa Catwalk Mine • LIFEX pro
Slide 11: Moabsvelden
MOABSVELDEN ROM Production and Sales (Kt) 162 152 153 124 121 111 107 56 95 84 85 80 55 34 85 Apr-20 May-20 Jun-20 Jul-20 Aug-20 Sep-20 Oct-20 Nov-20 Dec-20 Jan-21 Feb-21 Mar-21 ROM Buy-ins sales Own sales Key milestones achieved Key focus areas • Project commenced in June 2020 • Rescheduling and fu
Slide 12: Moabsvelden Project Development Status
MOABSVELDEN PROJECT DEVELOPMENT STATUS 12
Slide 13: Mining Segment ROM and Sales Performance
MINING SEGMENT ROM AND SALES PERFORMANCE ROM Production (Kt) Mining Sales (Kt) 13
Slide 14: LIFEX Projects
LIFEX PROJECTS VG3 UG AND DRILLING CAMPAIGN ELANDSPRUIT UG KHANYISA • Drilling campaign to start in Q2’FY22 • 1.0Mt of reserves Boundary coal mining • A drilling contractor has been selected • 4 years LOM • Reserves lying within mine reserves boundary • Capex approval signed and completed • Steady s
Slide 15: Wescoal Trading Segment
WESCOAL TRADING SEGMENT
Slide 16: Overview
OVERVIEW • Performance affected by COVID-19 • No reportable HSEC incidents • Major customer reduced coal consumption, pricing and margins • Reduced pricing and extra coal availability depressed overall margins • Continued focus on debtors’ book • Sustained regional footprint • Ongoing working relati
Slide 17: Volumes and Revenue Performance Trend
VOLUMES AND REVENUE PERFORMANCE TREND Volumes – Kt Revenue – Rm 259 210 155 149 156 167 162 104 FY21 Q1 FY21 Q2 FY21 Q3 FY21 Q4 FY21 Q1 FY21 Q2 FY21 Q3 FY21 Q4 • Reduced sales volumes and revenue against a background of COVID-19 • FY21 sales volumes decreased by 12.1% to 667Kt (FY20: 759Kt) • FY21 r
Slide 18: Wescoal Financials
WESCOAL FINANCIALS
Slide 19: Financial Salient Features
FINANCIAL SALIENT FEATURES REVENUE GROSS PROFIT • Significant improvement compared to FY20 R3.9 billion R411 million mainly at VGF (FY20: R3.8 billion) (FY20: R333 million) • Moabsvelden sales contribution for full year • Improvement in production contributed to EBITDA CASH GENERATED higher GP & mor
Slide 20: Statement of Comprehensive Income – Extracts
STATEMENT OF COMPREHENSIVE INCOME – EXTRACTS FY21 FY20 Rm Rm • Higher revenue due to higher sales volumes Revenue 3 902 3 810 due to full year contribution from Moabsvelden Gross profit 411 333 • Higher gross profit due to improved production volumes, realized cost savings, higher own sales volumes
Slide 21: Segmental Contributions and Revenue Diversity
SEGMENTAL CONTRIBUTIONS AND REVENUE DIVERSITY Segmental contribution FY21 Revenue EBITDA FY21 FY21 18% Mining 99% Trading 82% FY21 Rev enue div ersity yoy FY20 30% 35% Eskom Other 65% 70% 21
Slide 22: Mining Unit Cost
MINING UNIT COST Unit cost (excluding buy-ins and delivery) R/t 2% 414 404 400 10% 367 38 57 24 45 27 27 78 300 77 12 71 33 13 14 41 200 41 228 100 189 170 0 FY19 FY20 FY21 Mining Fuel Mining Transport Beneficiation Other Operating expenses 22
Slide 23: Statement of Financial Position
STATEMENT OF FINANCIAL POSITION Audited Audited 31 Mar 2021 31 Mar 2020 Rm Rm Non-current assets 2 849 2 703 • Increase in PPE due to expansion projects and due to reassessment of rehabilitation Property, plant and equipment 2 450 2 205 liability Investments - • Reduction in goodwill due to impairme
Slide 24: Statement of Financial Position | Continued
STATEMENT OF FINANCIAL POSITION | CONTINUED Audited Audited 31 Mar 2021 31 Mar 2020 Rm Rm Total shareholders’ funds 849 883 Non-current liabilities 1 420 1 218 Rehabilitation provision 998 700 • Increase in rehabilitation provision due to increase in void and additional provision at Deferred tax 231
Slide 25: Capital Expenditure
CAPITAL EXPENDITURE FY21 CAPEX – Rm FY22F FY21A FY20A FY19A Operation Rm Rm Rm Rm Moabsvelden 68-86 219 23 8 VGF 39-49 139 336 170 Khanyisa 4-5 19 25 209 Elandspruit 69-87 39 40 16 Wescoal Trading 5-10 2 2 - Processing 7-9 1 4 13 Mining HO 1-2 - 2 - Corporate 1-2 - 1 1 Total 188-240 419 433 417 25
Slide 26: Capital Allocation
CAPITAL ALLOCATION +24 +422 -11 +50 1 220 +89 1 021 -773 Net debt Cash Net interest Tax paid CAPEX Purchase Finance Net debt 31 March generated rehab lease liability 31 March 2020 from investment 2021 operations 26
Slide 27: Lending Structure
LENDING STRUCTURE DEBT PROFILE OF CURRENT FACILITIES Debt profile Rm 1,600 1,400 1,200 1,000 800 600 400 200 0 Mar 2020 Jun 2020 Aug 2020 Dec 2020 Mar 2021 Jun 2021 Aug 2021 Dec 2021 Mar 2022 Jun 2022 Aug 2022 Dec 2022 Mar 2023 Jun 2023 Aug 2023 Dec 2023 Mar 2024 Jun 2024 Aug 2024 Jul 2020 Sep 2020
Slide 28: Looking Ahead
WESCOAL LOOKING AHEAD
Slide 29: Looking Ahead: Focus Points
LOOKING AHEAD FOCUS POINTS Risk management General costs and overheads ESG Strategy and growth • COVID-19 • Reap savings from cost • Full implementation in FY22 • Sweat current assets • Debt and liquidity reduction initiatives • Underpinned by a strategy • LOM extensions management - Group restructu