Whitehaven Coal Limited · ASX:WHC
Whitehaven Coal — 2016 Global Metals and Mining Conference
31 slides from Whitehaven Coal's conference presentation, Mar 2, 2016
Slide 1: Whitehaven Coal Limited
Whitehaven Coal Limited 2016 GLOBAL METALS AND MINING CONFERENCE Australia’s Leading High Quality Coal Company MIAMI, UNITED STATES 29 FEBRUARY – 2 MARCH 2016
Slide 2: Disclosure
Disclosure STATEMENTS CONTAINED IN THIS MATERIAL, PARTICULARLY THOSE REGARDING THE POSSIBLE OR ASSUMED FUTURE PERFORMANCE, COSTS, DIVIDENDS, RETURNS, PRODUCTION LEVELS OR RATES, PRICES, RESERVES, POTENTIAL GROWTH OF WHITEHAVEN COAL LIMITED, INDUSTRY GROWTH OR OTHER TREND PROJECTIONS AND ANY ESTIMATE
Slide 3: Agenda
Agenda − About Whitehaven − Asian Coal Market Overview − Operations − Financial Performance − Outlook − Appendices 3 // GLOBAL METALS AND MINING CONFERENCE
Slide 4: Who We Are
Who We Are LISTED AUSTRALIAN COAL MINER (ASX CODE:WHC) PRODUCING PREMIUM COALS FROM THE GUNNEDAH BASIN IN NEW SOUTH WALES − Lowest cost quartile coal miner − Producer of premium quality thermal and metallurgical coals − Long life, low cost tier one mines with world class reserves − Profitable at cyc
Slide 5: Our Mines And Location
Our Mines And Location Maules Creek (75%) Tier One Mine – Reserves ~ 30 years, Permitted & Planned 13Mtpa – SSCC, PCI and high energy thermal Narrabri (70%) Tier One Mine – Reserves ~ 25 years, Permitted 8Mtpa, Planned >8Mtpa – PCI & low ash thermal Werris Creek (100%) – Reserves ~ 8 years, Permitte
Slide 6: Where Our Coal Is Sold
Where Our Coal Is Sold COAL SOLD INTO PREMIUM ASIAN MARKETS Thermal Coal Sales 1% 11% – Managed sales of 9.4Mt in H1 FY2016 with 12% Japan 1% metallurgical coal and 88% thermal coal Korea 10% Taiwan – Key markets of Japan, Korea, Taiwan and India 62% Malaysia – Sales mix improves over time as sales
Slide 7: Whitehaven’s Place In Growing Asian Market
Whitehaven’s Place In Growing Asian Market 7 // GLOBAL METALS AND MINING CONFERENCE
Slide 8: Whitehaven’s Met Coal
Whitehaven’s Met Coal SALES OF MET COAL INCREASE WHITEHAVEN’S MARGINS – High yields and higher prices for the metallurgical coal products incentivises Whitehaven to maximise sales of met coal – Mine yields are much higher than competitor mines - Maules Creek 92% and Narrabri 97% 8 // GLOBAL METALS A
Slide 9: Asian Countries Building More Power Stations
Asian Countries Building More Power Stations NEW USC AND SC GENERATING CAPACITY BEING ADDED ACROSS ASIA EX CHINA – The Asian region (excluding China, Japan, IEA Forecast Coal Fired Electricity Korea and Taiwan) has a population of about Capacity (GW) and Coal Required (Mt) 700 million. Average per c
Slide 10: Whitehaven’s High Quality Thermal Coal
Whitehaven’s High Quality Thermal Coal Thermal Coal - Ash vs Sulphur Ash (% a.d,) 20.0 18.0 16.0 14.0 12.0 10.0 8.0 0.20 High Quality Coal – Whitehaven produces some of the 0.30 Whitehaven highest quality coals sold in the Asian 0.40 region Hunter Valley 0.50 – These high yielding, high quality (Jap
Slide 11: Narrabri Coal Used In Japan’s Most Efficient Power Stations
Narrabri Coal Used In Japan’s Most Efficient Power Stations IF JAPAN’S COAL FIRED GENERATING EFFICIENCY WAS ADOPTED ELSEWHERE2, CARBON DIOXIDE EMISSIONS WOULD BE REDUCED BY 1.5BT/Y1 Japan COP21 Target Mix 2030 – In H1 FY2016, 62% of Whitehaven’s thermal coal 2% 1% was sold in Japan, to increase as M
Slide 12: Operations
Operations 12 //GLOBAL METALS AND MINING CONFERENCE
Slide 13: Safety
Safety Whitehaven and NSW Coal Industry TRIFR 25.00 20.00 – Whitehaven’s TRIFR remains significantly below the NSW 15.00 average of 15.5 10.00 – The TRIFR increased to 10.7 from 9.2 at the end of FY2015 5.00 – Renewed focus across all 0.00 operations to improve safety Jul-12 Jan-13 Jul-13 Jan-14 Jul
Slide 14: Production Profile
Production Profile STRONG GROWTH FROM TIER ONE MINES Whitehaven Saleable Coal Production (100%, Mt) 25.0 20.0 – Production is forecast to be in the range of 19.5Mt to 20.1Mt in FY2016 15.0 – Production has quadrupled since 10.0 FY2012 as Narrabri longwall was commissioned, followed by Maules 5.0 Cre
Slide 15: Maules Creek – A Tier One Mine
Maules Creek – A Tier One Mine OUTSTANDING MARKET ACCEPTANCE OF MAULES CREEK COAL – Mine permitted to 13Mt ROM (12Mt saleable) Maules Creek Half Yearly ROM Coal Production (000's t) – Mine operated at 8.5Mtpa rate in December 4,000 – FOB Costs averaged A$58/t in H1 FY2016 – Thermal coal from Maules
Slide 16: Narrabri Mine Plan
Narrabri Mine Plan A TIER ONE MINE – Mine permitted to 11Mtpa ROM – Mine produced 3.5Mt ROM in H1FY2016 (including LW move) and 8.3Mt ROM in CY2015 – FOB costs at Narrabri averaged A$49/t in H1 FY2016 – First production from the 400m wide longwall face is scheduled for April 2017 – Plan to extend th
Slide 17: Financial Summary
Financial Summary 17 //GLOBAL METALS AND MINING CONFERENCE
Slide 18: Recent Financial Highlights
Recent Financial Highlights PROFITABLE AT CYCLE LOWS H1 H1 Profit and Loss Comment FY2016 FY2015 Net profit after tax 7.8 (77.9) Up A$85.7m (A$’m) EBITDA before 106.4 52.1 More than double the pcp significant items (A$’m) Cash generated from 118.3 22.7 Up A$95.6m operations (A$’m) Unit cost pe
Slide 19: Costs And Margins
Costs And Margins INCREASING MARGINS AS LOW COST PRODUCTION AND MET COAL SALES GROW Whitehaven ASP and Costs ex Royalties (A$/t) 85.0 – Whitehaven’s costs are now firmly 80.0 entrenched in the first quartile of the 75.0 seaborne market and cost reductions 70.0 are sustainable 65.0 – Fully absorbed c
Slide 20: Balance Sheet And Capital Management
Balance Sheet And Capital Management BALANCE SHEET IMPROVED AT CYCLE LOWS 31 Dec 2015 30 Jun 2015 – Capital spend ‘complete’ A$’m A$’m – Net interest expense has peaked Cash on hand 112.0 102.4 – Sustaining capex is modest Senior secured bank facility 900.0 900.0 – Debt serviceability continues to i
Slide 21: Cash Margins
Cash Margins ENTERING THE CASH HARVEST MODE – Major capital investment at Maules Creek and Narrabri completed A$ $3.50/t – Face widening at Narrabri only remaining growth project – Cash flows generated to be used in debt reduction – Higher margin coal being added at both Maules Creek and A$ $7.00/t
Slide 22: Outlook
Outlook 22 //GLOBAL METALS AND MINING CONFERENCE
Slide 23: Production Growth To Continue
Production Growth To Continue MORE HIGH QUALITY, LOW COST, HIGH MARGIN COAL Saleable Coal Production (100%, Mt) – Tonnage growth is low risk 30.0 – Low cost, tier one mines provide 25.0 margins greater than current average (A$14/t) 20.0 – Production commences from Narrabri’s 15.0 wider longwall in F
Slide 24: Vickery – Whitehaven’s Next Project
Vickery – Whitehaven’s Next Project ANOTHER SIGNIFICANT GROWTH OPTION Timing of construction is market dependent, Whitehaven’s share of capex is expected to be funded from selldown of interest Location About 25kms north of Gunnedah Resources and Reserves Resource of 505Mt, Underground Resources of 2
Slide 25: Valuation Disconnect
Valuation Disconnect EQUITY MARKET VALUES SIGNIFICANTLY BELOW RECENT TRANSACTIONS Reserve Values -A$/t A$ $14.00/t A$ $12.00/t – Recent coal transactions in Australia have been A$ $10.00/t completed at significantly higher prices than A$ $8.00/t A$ $6.00/t equivalent equity market valuations A$ $4.0
Slide 26: Investment Highlights
Investment Highlights LOW COST, LOW RISK, GROWTH COMPANY − Compelling value on all metrics − Low risk growth − Levered to growing Asian markets − Levered to regulatory and technological change − Volumes and margins increase − Overall margins improve as metallurgical coal is added to the sales mix 26
Slide 27: Thank You
THANK YOU www.whitehavencoal.com.au
Slide 28: Appendices
Appendices 28 //GLOBAL METALS AND MINING CONFERENCE
Slide 29: Who We Are
Who We Are PRODUCER OF HIGH QUALITY COAL SOLD TO PREMIUM ASIAN SEABORNE MARKET ASX Code: WHC Costs – 1,026 million shares on issue with 6,829 shareholders – Unit costs reduced to A$58/t in H1 FY16, in the lowest cost quartile – Market Cap $A500 million Shareholders – Trading over 80 million shares p
Slide 30: Resources
Resources Note: See Competent Person Statement on Slide 2 30 //GLOBAL METALS AND MINING CONFERENCE
Slide 31: Reserves
Reserves Note: See Competent Person Statement on Slide 2 31 //GLOBAL METALS AND MINING CONFERENCE
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