Yancoal Australia Ltd. · ASX:YAL
Yancoal Australia — FY2019 Earnings Presentation
17 slides from Yancoal Australia's earnings presentation, Feb 29, 2020
Slide 1: 2019 Result Presentation
YANCOAL AUSTRALIA LTD ADDRESS: Tower 2, 201 Sussex Street Sydney NSW 2000 PHONE: 61 2 8583 5300 FAX: 61 2 8583 5399 WEBSITE: www.yancoal.com.au 28 February 2020 ASX Release: 2019 Result Presentation Yancoal Australia Ltd (the “Company”) is pleased to present its annual results investor presentation
Slide 2: 2019 Result
Yancoal Australia Ltd 2019 Result Australia’s Largest Pure-play Coal Producer 28 February 2020
Slide 3: Important Notice and Disclaimer
Important Notice and Disclaimer Acceptance This presentation is issued by Yancoal Australia Limited ABN 82 111 859 119 (Yancoal). By accepting, accessing or reviewing this presentation, you acknowledge and agree to the terms set out in this Important Notice and Disclaimer. Summary of information Thi
Slide 4: Important Notice and Disclaimer (Continued)
Important Notice and Disclaimer (Continued) Reserves and Resources Reporting In this presentation, references to mineral resources (Resources) and ore reserves (Reserves) for Yancoal are compliant with the Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves 201
Slide 5: 2019 Key Highlights
2019 Key Highlights Sustained improvement in safety A$1.64 billion EBITDA performance (operating margin of 36%) US$500mn debt pre-payment 35.6Mt Attributable Saleable Production Leverage reduced to 1.6x Gearing reduced to 29.2%(1) Total dividend of A$417 million, or A$61/tonne Operating Cash Cost A$
Slide 6: Yancoal advantages
Yancoal advantages Portfolio of mines producing high-value export coal at industry-leading cash margins Significant reserve base and sustainable capital structure underpin platform for growth Management track record of capturing growth opportunities and creating shareholder value Valuable an
Slide 7: Safety Performance
Safety Performance TRIFR – Yancoal (2, 3) LTIFR – Yancoal (4) Rolling 12 Month Basis Rolling 12 Month Basis YAL 12mth Rolling TRIFR YAL 12mth Rolling LTIFR 10 6 9 5 8 4 3.56 7.40 7 7.27 3 3.23 6 2 5 1 Ongoing focus resulted in improved metrics across Yancoal operations 6
Slide 8: Coal Production
Coal Production Attributable Saleable Production by Asset (100% Basis) (5, 6) (Million tonnes) Moolarben MTW HVO • 2019 production target of ~35Mt exceeded. Yarrabee Stratford Duralie Non-attributable 60 52.1 • 35.6Mt of attributable saleable coal (+8% YoY). 50.0 50 40 • Large-scale, low-cost and lo
Slide 9: Sales Volumes and Unit Costs
Sales Volumes and Unit Costs Cash Operating costs (per sales tonne) (A$/tonne) Cash operating (excluding royalties) Operating Margin • 2019 unit cost target achieved. 140 • A$61/t FOB(7) (-3% YoY despite sector inflation). 120 • A$111/t average sale price (-16% YoY). 100 69 52 50 • A$50/t operating
Slide 10: EBITDA and Operating Cashflow
EBITDA and Operating Cashflow EBITDA and Margin Operating Cashflow (A$ Million) (A$ Million) Operating EBITDA EBITDA Margin Operating cash flows 3,000 2,000 45% 1,747 2,500 38% 1,548 2,180 36% 1,500 2,000 1,635 1,500 1,000 988 1,000 500 408 500 - - 2017 2018 2019 2017 2018 2019 Quality assets are de
Slide 11: EBITDA Drivers
EBITDA Drivers 2018 to 2019 drivers of the change in EBITDA A$ million External factors The lower coal price was the most significant factor 10
Slide 12: Continued Dividends and Debt Reduction
Continued Dividends and Debt Reduction Annual Net Debt (10) and Leverage Ratio (11) Dividend distribution and Payout ratio (12) (A$ Million) | (x) (A$ Million) | (%) Net debt, A$ mn Net debt, US$ mn Interim Div. Final Div. Leverage (net debt/EBITDA) Special Div. Payout ratio 6,000 600 4.6 5,000 500
Slide 13: Profit after tax has one-off items
Profit after tax has one-off items Annual Pre and Post Tax Profit Results (A$ Million) Profit before tax Profit after tax • Lower coal prices reduced the Profit before 1,400 tax in 2019. 1,200 1,172 • One-off items include an income tax credit 1,000 852 of $219 million to the Profit After Tax, arisi
Slide 14: Evolving coal market conditions
Evolving coal market conditions Regional thermal coal indices • Thermal coal found price support by the end USD/tonne GC Newc (6000 kCal/kg NAR) US$/t API5 (5500 kCal/kg NAR) US$/t 130 of 2019. 120 110 • The high-energy thermal coal premium 100 90 returned to past levels during the year. 80 70 60 •
Slide 15: Guidance for 2020
Guidance for 2020 Operational guidance for 2020: • Attributable(14) saleable coal production of around 36 million tonnes. • Attributable(14) cash cost (excl. government royalties) of around A$61/t. • Attributable(14) capital expenditure expected of around A$380 million(15). Aim to balance long-term
Slide 16: Strategy and Investment case
Strategy and Investment case Core assets drive Yancoal forwards • Our production base and unit costs are a strategic advantage. • High-quality coal is essential to the global energy mix. • Asset reinvestment and shareholders returns are a priority. • Debt optimisation and debt reduction is an ongoin
Slide 17: Footnotes
Footnotes 1. Net debt does not include debt and earnings associated with Watagan arrangements. 2. TRIFR – Total Recordable Injury Frequency Rate as at 31 December 2019. 3. Excludes data from the Middlemount and Watagan assets (Austar, Ashton and Donaldson). 4. LTIFR – Lost Time Injury Frequency Rate