Slide 1: Full-year 2017 Earnings Presentation
Full-year 2017 Earnings Presentation 6 March 2018
Slide 2: Agenda
Agenda 3 Summary 4 2017 Market Review 7 Operations Review 9 Financial Highlights 13 2018 Exploration Program 15 Market Preview 2
Slide 3: Summary
Summary • Complex but strong nickel environment in China in 2017 • Ore prices stage recovery as inventory drops • End-demand stable since 2016 with rising new energy vehicles • Price recovery, operational efficiency and FX boost financial performance • Revenues were up 54% year-over-year to ₱5,815.6
Slide 4: 2017 Market Review
2017 Market Review
Slide 5: Ore prices stage recovery as China stocks slide
Ore prices stage recovery as China stocks slide Nickel Price versus Nickel Ore Price LME and China Laterite Ore Inventory LME Nickel Nickel Ore Major ports in LME Nickel Price Nickel Ore Price LME LME Nickel Inventory China Laterite Ore Inventory Price (US$) Price (RMB) China (10k MT) 20,000 500 500
Slide 6: End-demand in China stable since 2016 with rising new energy vehicles
End-demand in China stable since 2016 with rising new energy vehicles China Fixed Assets Investment (Excluding Rural Households)1 China Industrial Production2 YOY Growth YOY Growth 12 (%) 8 (%) 9 7.2% 7 6.6% 6 6 3 0 5 Dec-15 Mar-16 Jun-16 Sep-16 Dec-16 Mar-17 Jun-17 Sep-17 Dec-17 Dec-15 Mar-16 Jun-1
Slide 7: Operations Review
Operations Review The Cagdianao Mine comprises 4,376 hectares located in Sitio Kinalablaban Brgy. Cagdianao Claver, Surigao del Norte, Philippines. Divided into seven contiguous laterite deposits, it is connected within eight kilometers from two separate causeway facilities. It is covered by MPSA 00
Slide 8: Volume growth highly linked to operational strength
Volume growth highly linked to operational strength Annual Production (‘000 WMT) 2017 2016 7,000 6,450 50,000 6,178 6,153 109 80 5,779 45,000 vessels vessels 6,000 5,016 40,000 4,712 4,567 shipped shipped 5,000 35,000 3,828 30,000 5.971 million WMT 4.309 million WMT 4,000 25,000 3,000 20,000 11 7 1,
Slide 9: Financial Highlights
Financial Highlights Our subsidiary, PGMC-CNEP Shipping Services Corporation, owns five landing craft transports (LCTs) with 1,800 tons capacity for hauling nickel ore from the port to the shipping vessel
Slide 10: Flexible product offering addresses customer needs
Flexible product offering addresses customer needs Revenue Breakdown Volume Analysis By shipment volume (‘000 WMT) LG MG HG 2017 2016 Change 7,000 5,929 6,303 5,971 Volume (million WMT) 5.971 4.309 39% 6,000 5,352 5,000 4,354 4,501 4,309 Limonite (Low grade) 3.641 2.396 52% 4,000 3,407 Saprolite (Me
Slide 11: Price recovery, cost-effectiveness and FX boost financial performance
Price recovery, cost-effectiveness and FX boost financial performance Summary Income Statement Cash operating cost (PHP/ WMT) (in PHP millions, unless otherwise indicated) 2017 2016 change ₱693.23 ₱619.97 ₱590.24 Volume (million WMT) 5.971 4.309 39% 11% 5% Shipping and Distribution Average realized
Slide 12: Financial position remains strong
Financial position remains strong Summary Balance Sheet Capital Structure Cash 886.6 Total bank debts 749.7 Total current assets 3,682.1 Common shares 6,113.5 Property and equipment 2,003.3 Total non-current assets 5,358.7 Total current liabilities 1,805.5 Earnings per share 0.1368 Working capital 1
Slide 13: 2018 Exploration Program
CAGA=4) ICAGA- 2) [CAGA=5) (CA GA=3} LOCAL GEOLOGY IGEOLOGICAL MAP OF CAGDIANAO PROJECT
Slide 14: New exploration areas to raise existing resource base
New exploration areas to raise existing resource base Current Drilling Program (drill holes) Mineral Resources (CAGA 1 to 5) Measured + Indicated Measured + Indicated + Inferred Areas Target Completed Remarks 90,000 78,142 CAGA 1 (unmined) 919 606 Ongoing drilling 80,000 CAGA 2 (active) 29 - For Dri
Slide 15: Market Preview
Market Preview
Slide 16: Global nickel supply demand balance
Global nickel supply demand balance EBITDA Potential Impact of Operating Leverage on Margins kt 2018 2019 2020 Margin (%) 50% Mine production 2,228 2,347 2,397 45% 45% 43% Refined production 2,180 2,271 2,316 40% 40% Consumption/Demand 2,206 2,275 2,322 35% 35% Surplus/Deficit -22.1 -3.15 -5.3 30% 3
Slide 17: Appendices
Appendices www.gfni.com.ph investorrelations@gfni.com.ph
Slide 18: Leading indicators for real estate development
Leading indicators for real estate development Slower but still in positive territory for China’s real estate development China Fixed Assets Investment in Real Estate China Land Area Purchased for Real Estate YOY Growth YOY Growth (%) (%) 15.8% 10 20 8 10 0 6 3.6% Dec-15 Mar-16 Jun-16 Sep-16 Dec-16
Slide 19: Leading indicators for infrastructure
Leading indicators for infrastructure Water, environment and public facilities remain the key focus area of infrastructure China Fixed Assets Investment in Supply of Power, Gas and Water China Fixed Assets Investment in Water, Environment and Public Facilities YOY Growth YOY Growth 25 (%) (%) 35 20
Slide 20: Leading indicators for automobile
Leading indicators for automobile New energy vehicles enjoy double-digit growth on rising disposable incomes and government incentives to EV adoption China Industrial Production of Automobiles China Passenger Car Sales YOY Growth YOY Growth (%) (%) 18 35 30 15 25 12 20 15 9 10 5 6 0 3 -5 Dec-15 Mar-