Fortress Minerals Limited · SGX:OAJ
Fortress Minerals — 3QFY2020 Earnings Presentation
28 slides from Fortress Minerals's earnings presentation, January 2020
Slide 1: Fortress Minerals Limited 3QFY2020 Results Presentation
A LEADING MALAYSIAN HIGH-GRADE IRON ORE CONCENTRATE PRODUCER AND EXPORTER FORTRESS MINERALS LIMITED 3QFY2020 Results Presentation
Slide 2: Important Notice
IMPORTANT NOTICE: This presentation does not constitute, or form any part of any offer for sale or subscription of, or solicitation of any offer to buy or subscribe for, any securities in Fortress Minerals Limited (“Fortress Minerals” or the “Group”) in Singapore or any other jurisdiction nor shall
Slide 3: Business Introduction
01 BUSINESS INTRODUCTION
Slide 4: Company Profile
COMPANY PROFILE • We are an iron ore producer and exporter headquartered in Malaysia • Our principal business activities include exploration, mining, production and sale of iron ore concentrate • Currently producing high grade iron ore concentrate from East, Valley and West Deposits in Bukit Besi mi
Slide 5: Management Team
MANAGEMENT TEAM Dato’ Sri Ivan Chee Ng Mun Fey Fionne Chua • Responsible for overall • Responsible for the overall • Responsible for all finance and management and operations of the management and day-to-day accounting operations of the Group, including formulating, operations of the Bukit Besi Mine
Slide 6: Our Milestones
OUR MILESTONES ✓ Awarded mining rights to Bukit Besi Mine 2016 ✓ Magnetic survey and metallurgical testing ✓ Planning & design of mine infrastructure and processing plant ✓ Completed JORC drilling campaign on East, Valley & West Deposits ✓ Constructed mine infrastructure and processing plant with a
Slide 7: Milestones FY2020 by quarter
✓ Listed on the Catalist Board of SGX-ST in March 2019 1st Quarter ✓ First iron ore miner listed on SGX FY 2020 ✓ S$15.0 million gross proceeds raised ✓ Resource upgraded to 6.19 Mt at East, Valley & West Deposits. ✓ First interim dividend for FY2020 equal to the 12.1% profit of FY2019 2nd Quarter ✓
Slide 8: Bukit Besi Mine Overview
02 BUKIT BESI MINE OVERVIEW
Slide 9: Bukit Besi Mine - Overview
BUKIT BESI MINE - OVERVIEW Mine Infrastructure Magnetite-pyrite skarn Tenement Boundaries North Location: Terengganu, Malaysia East West Valley Total Concession Area: 526.2ha open pit Nearby Airports: Airports in Kuantan and Kuala Terengganu (approximately 1.5 hours drive); Explored surface area wit
Slide 10: Mineral Resource – A Closer Look
MINERAL RESOURCE – A CLOSER LOOK RESOURCE SUMMARY: West, Valley and East Deposits are <5% of total Northconcession area (526.2 ha) 7 Aug 2018 28 Feb 2019 East Deposit Resource Area Category West Net Attributable to the Group Valley Tonnes Grade (Mt) (% Fe) West Indicated 0.37 42.20 0.34 41.44 West I
Slide 11: Bukit Besi Mine – Production Process
BUKIT BESI MINE – PRODUCTION PROCESS Removal of blasted material Step 1 Step 2 Blasting of the Removal and identified stockpiling of location blasted materials Rock surface after blasting Step 3 Step 4 Crushing Concentrate processing process The crushing plant Magnetic separator Grinding ball mills
Slide 12: Financial Highlights
04 FINANCIAL HIGHLIGHTS
Slide 13: Quarterly Performance Highlights
QUARTERLY PERFORMANCE HIGHLIGHTS Robust Sales Robust Sales RobustVolume Sales Volume ❖Second Interim Volume Capital Expenditure Dividend of 0.20 Singapore cents, ❖48,121 DMT in 3Q, representing 22.9% of ❖US$1.9 million 30.5.% increase YoY 9M FY2020 net profit invested in exploration after tax and ev
Slide 14: Financial Snapshot
FINANCIAL SNAPSHOT Sales Volume (DMT) Revenue & Average Realised Selling Price DMT US$’M ~86% of FY2019 US$/DMT ~80% of FY2019 25.0 +79% from 9MFY19 $105.00 250,000 223,859 +24% of 3QFY19 +71% from 9MFY19 $98.17 20.6 $100.00 200,000 180,006 20.0 $95.00 $94.47 17.7 $92.24 $89.65 $90.00 150,000 15.0 $
Slide 15: 3Q FY2020 Financials – Operational Efficiency
3Q FY2020 FINANCIALS – OPERATIONAL EFFICIENCY US$/DMT Operational Efficiency (In US$/DMT) 120.00 Comparative Quarter 3 Cumulative 9 months full year 109.48 100.00 97.69 96.87 94.66 94.30 94.47 98.17 92.24 80.00 84.65 79.12 65.43 58.23 60.00 53.84 Adjusted 47.71 49.21 EBITDA/DMT (1) Gross Profit/DMT
Slide 16: Statement of Comprehensive Income for the Group
STATEMENT OF COMPREHENSIVE INCOME FOR THE GROUP Change US$'000 9M FY2020 9M FY2019 (%) Revenue 17,730 9,903 79.0 Gross profit 11,778 5,675 107.6 Gross profit margin 66.4% 57.3% 9.1 Other operating income 594 1,989 (70.1) Selling and distribution expenses (1,420) (3,262) (56.5) Other operating expens
Slide 17: Statement of Financial Position for the Group
STATEMENT OF FINANCIAL POSITION FOR THE GROUP US$'000 30 November 2019 28 February 2019 ASSETS Non-current assets Exploration & evaluation asset 2,375 403 Mining properties 6,539 6,973 Plant and equipment 13,609 11,366 Right-of-use assets 633 - Current assets Inventories 576 439 Trade receivables 1,
Slide 18: Statement of Financial Position for the Group
STATEMENT OF FINANCIAL POSITION FOR THE GROUP US$'000 30 November 2019 28 February 2019 Non-current liabilities Deferred tax liabilities 1,322 505 Amounts due to shareholders 6,354 15,721 Borrowings 45 - Lease liabilities 455 - Current liabilities Borrowings 38 Lease liabilities 189 - Trade payables
Slide 19: Statement of Cash Flows for the Group
STATEMENT OF CASH FLOWS FOR THE GROUP US$'000 9M FY2020 9M FY2019 Net cash flow generated from operating activities 9,239 1,113 Net cash flow used in investing activities (5,802) (2,983) Net cash flow generated from financing activities 7,227 2,266 Net change in cash and cash equivalents 10,664 396
Slide 20: Use of IPO Proceeds – Status in 3Q FY2020
USE OF IPO PROCEEDS – STATUS IN 3Q FY2020 Aggregate amounts in SGD’000 • Further development of Bukit Besi Mine • Future exploration and geology work • Expansion of iron ore processing capacities 01 S$7.0 million • Acquisition/ JV of new mines S$2.0 million 02 • General working capital 03 S$2.4 mill
Slide 21: Industry Overview
AE Pa 2 +¢ ~~ INDUSTRY OVERVIEW
Slide 22: Update on Iron Ore Prices
Update on Iron Ore Prices • Iron ore price has been declining from the peak in July, however it crept back in recent months due to China’s pledge in the infrastructure spending (Source 1) • Fortress, as a high-grade iron ore concentrate producer, enjoys niche position especially during declining pri
Slide 23: Key Market Demand – Malaysia
INDUSTRY OVERVIEW Key Market Demand– Malaysia • Regional steel demand remain robust • Fortress generated revenue from the sales to two local steel mills in Malaysia for the last 3 quarters:: - 1Q FY2020 - 55,552 DMT - 2Q FY2020 - 76,334 DMT - 3Q FY2020 - 48,121 DMT • Iron ore consumption of the two
Slide 24: Key Market Demand – China
INDUSTRY OVERVIEW Key Market Demand – China • The premium Chinese steel mills are willing to pay for high-grade iron ore has widened in recent months, due to recovery in profitability and desire to maximise output (Source1) • Broad customer base and strong relations in China built by Fortress’ exper
Slide 25: Competitive Advantage
COMPETITIVE ADVANTAGE ✓ Key contributing factors to our ✓ High grade Iron ore concentrate competitiveness ✓ Low levels of impurities which ✓ Favourable geological conditions Strategic Location, would command premium prices and cost advantage against lower grades High Grade Iron Good Infrastructure,
Slide 26: Share Statistics
SHARE STATISTICS Bloomberg Code: SGX: OAJ FMIL SP Share Price ~S$0.23 Market Capitalization ~S$115.0M Free Float 76.3M P/E ratio 14.57x Dividend yield 0.87% NAV Per Share 7.50 Singapore Cents Shares 500M Outstanding Source: Bloomberg Data at 7 Jan 2020 26
Slide 27: Price Trend
PRICE TREND Source: Bloomberg Data at 7 Jan 2020 27
Slide 28: Thank You!
THANK YOU! Registered Office: 8 Robinson Road #03-00 ASO Building Singapore 048544 Principal Place of Business: 9-1 Jalan PJS 8/18 Dataran Mentari 46150 Petaling Jaya Selangor, Malaysia Tele: +60 (3) 56301993 Email: corporate@fortress.sg Website: www.fortress.sg