New Hope Corporation Limited · ASX:NHC
New Hope — H1 2018 Earnings Presentation
37 slides from New Hope's earnings presentation, Mar 20, 2018
Slide 1: Financial Results Release Half Year Ended 31 January 2018
NEW HOPE GROUP FINANCIAL RESULTS RELEASE HALF YEAR ENDED 31 JANUARY 2018 New Hope Corporation Limited Presented by Robert Millner and Shane Stephan (ASX code: NHC) newhopegroup.com.au
Slide 2: Results Overview
RESULTS OVERVIEW Robert Millner, Chairman
Slide 3: Results highlights
Cash generated Net Profit After Tax Total tonnes sold from ops $115.6M $206.5M 4.4M ▲111% from 2017 ▲10% from 2017 Before interest and tax EBITDA Interim dividend Land rehabilitated $211.7M 6.0 cents 45% ▲63% from 2017 ▲50% from 2017 Of all mined land life to date Please refer to Appendix for reconc
Slide 4: Safety and Sales Performance
a] »s x SAFETY AND SALES PERFORMANCE Shane Stephan, Managing Director and Chief Executive Officer
Slide 5: Total Recordable Injury Frequency Rate (TRIFR)
Total Recordable Injury Frequency Rate (TRIFR) TRIFR Linear (TRIFR) 35 30 25 20 15 10 5 0 5 FINANCIAL RESULTS RELEASE | HALF YEAR ENDED | 31 JANUARY 2018
Slide 6: Coal sale volumes
Coal sale volumes New Acland 2.2Mt ▼4% from 2017 EXPORT 4.2Mt Total tonnes produced ▲11% from 2017 Jeebropilly 0.3Mt ▼25% from 2017 4.4Mt ▲10% from 2017 DOMESTIC Bengalla (40%) 0.2Mt 1.9Mt On par with 2017 ▲12% from 2017 6 FINANCIAL RESULTS RELEASE | HALF YEAR ENDED | 31 JANUARY 2018
Slide 7: Financial Overview
FINANCIAL OVERVIEW
Slide 8: Financial overview key metrics
Revenue from Profit before income tax Profit after income tax operations (before non regular items) (before non regular items) $509.4M $165.2M $115.6M ▲36% from 2017 ▲107% from 2017 ▲111% from 2017 Earnings per share EBITDA Interim dividend (before non regular items) $211.7M 6.0 cents 13.9 cents ▲63
Slide 9: NPAT by segment
$58.8 $57.2 55 $39.7 40 NPAT $m 25 $17.3 10 ($0.4) ($2.1) Qld Coal NSW Coal Oil -5 2018 2017 Please refer to Appendix for reconciliation of Non IFRS Financial Information 9 FINANCIAL RESULTS RELEASE | HALF YEAR ENDED | 31 JANUARY 2018
Slide 10: NPAT bridge
160 89.1 1.6 140 120 16.1 115.6 10.0 3.8 100 NPAT $m 80 60 54.9 40 20 0 31 January 2017 Coal revenue (net royalties) Oil revenues QLD Coal Stock Bengalla Strip ratio Other 31 January 2018 Please refer to Appendix for reconciliation of Non IFRS Financial Information 10 FINANCIAL RESULTS RELEASE | HAL
Slide 11: EBITDA bridge
127.2 3.4 250 11.6 211.7 23.0 200 10.9 3.6 EBITDA $m 150 130.2 100 50 0 31 January 2017 Coal revenue (net Oil revenues Bengalla QLD Coal stock Marketing and Other 31 January 2018 royalties) transportation costs Please refer to Appendix for reconciliation of Non IFRS Financial Information 11 FINANCIA
Slide 12: Cash movement
206.7 3.8 450 35.6 8.9 353.1 49.9 300 236.9 Cash $m 150 0 Cash July 2017 Operating cashflows Interest and other PPE Exploration Dividends Cash January 2018 12 FINANCIAL RESULTS RELEASE | HALF YEAR ENDED | 31 JANUARY 2018
Slide 13: Contribution to government, employees and community
$1,300 $1,274.9 Federal Government $675.5 $636.6 • $1.49 billion $600 State Government $506.9 $500 $476.4 • $149 million $468.1 $456.7 Local Government $400 $388.2 $377.6 • $119 million $324.2 Employees $300 • $467 million $209.3 $200 Suppliers • $3.56 billion $100 Community • $4.6 million $- $m FY2
Slide 14: Operations
OPERATIONS
Slide 15: Bengalla
• New Hope share of 1.9Mt of saleable coal production • Profit before tax for the half year of $83.8 million • Continued focus on operational efficiency and de-bottlenecking of the coal supply chain • Working with the neighbouring Mt Pleasant operation to manage interaction between the two sites 15
Slide 16: New Acland approvals and Stage 2 options
Potential extended • Federal environmental approval in Jan 2017 Stage 2 areas • Unfavourable Land Court recommendation in May 2017 • Application to Amend Environmental Authority for Stage 3 rejected in February 2018 • Judicial Review of the Land Court decision began 19th March 2018 • Investigating o
Slide 17: Progressive rehabilitation at New Acland video
Please find a video of the progressive rehabilitation at New Acland Mine at: https://www.youtube.com/watch?v=xZciewS7kDM 17 FINANCIAL RESULTS RELEASE | HALF YEAR ENDED | 31 JANUARY 2018
Slide 18: Jeebropilly and Ipswich land holdings
• Jeebropilly Mine last coal ~end of calendar 2019 New Hope Group Ipswich land holdings • 459ha rehabilitated to date, cattle grazing on western areas of the mining lease for more than 15 years • Rehabilitation works complete at Chuwar and New Oakleigh West • Rehabilitation works beginning at New Oa
Slide 19: New Oakleigh rehabilitation
• Rehabilitation works complete at New Oakleigh West (pictured), now in monitoring and maintenance phase • 223ha of mined land rehabilitated to grazing standard • Planning for rehabilitation works at New Oakleigh East underway 2012 2018 19 FINANCIAL RESULTS RELEASE | HALF YEAR ENDED | 31 JANUARY 201
Slide 20: Chuwar rehabilitation
• Rehabilitation works complete, now in monitoring and maintenance phase • 30ha of mined land rehabilitated to grazing standard • Potential for large lot residential development in line with the local city plan Chuwar East Chuwar West 20 FINANCIAL RESULTS RELEASE | HALF YEAR ENDED | 31 JANUARY 2018
Slide 21: Bulk handling and rail infrastructure
• 5 years Lost Time Injury Free • Significant refurbishment works completed on some critical infrastructure • Implementation of remote train unloading system • Facilitated increased throughput from customers through flexible capacity arrangements 21 FINANCIAL RESULTS RELEASE | HALF YEAR ENDED | 31 J
Slide 22: Agriculture operations
• Breeding operation well established • Breeder numbers at 2,153 • 1,670 calves • Additional 1,800 calves expected in March • 9,000 tonnes of silage sold to local feedlots 22 FINANCIAL RESULTS RELEASE | HALF YEAR ENDED | 31 JANUARY 2018
Slide 23: Oil operations
• Improved production performance • 34% increase in oil production • Increasing oil price • 45% increase in revenue 23 FINANCIAL RESULTS RELEASE | HALF YEAR ENDED | 31 JANUARY 2018
Slide 24: Community investment
Increased rural access to emergency Improved mental health awareness Improved access to STEM education medical resources and training 24 FINANCIAL RESULTS RELEASE | HALF YEAR ENDED | 31 JANUARY 2018
Slide 25: Projects
PROJECTS
Slide 26: Lenton Joint Venture, Burton Mine and North Surat Project
Lenton Joint Venture Burton Mine / Lenton Project North Surat Project Bowen Basin Surat Basin • Coking/thermal coal • First coal estimated for Q2 calendar 2019 • Thermal coal • 380 million tonne resource* • Subject to final investment decision in Q2 • 1 billion tonne resource* calendar 2018 • ~1.5 m
Slide 27: Lenton Joint Venture acquisition
• Sale completed November 2017 • 90% joint venture participant • Adjoins New Hope’s Lenton Project • A mining lease, exploration permit and two mine development leases as well as associated infrastructure • Operational readiness planning • First coal estimated for Q3 2019 27 FINANCIAL RESULTS RELEAS
Slide 28: Group Outlook
GROUP OUTLOOK
Slide 29: Asian energy growth strong
• Asian energy growth strong • Coal is a key sector of Asian energy mix now and in the future • Australian thermal coal is the premium product available into Asian markets • New Hope has the balance sheet, management capability and project pipeline to service the growing demands of its customers • A
Slide 30: Growing demand from Asian markets
• Growing demand from Asian markets • Guangdong power demand up 5.7% in 2017 to 593 TWh • Guangdong is the largest power user in China accounting for 9.4% of China’s total power consumption of 6,307 TWh • China is reducing outdated inefficient domestic coal production • South East Asia investing in
Slide 31: Export share by country
Export Share % Japan 40.8% China 20.9% South Korea 15.5% Taiwan 11.6% India 1.6% Source: HIS Markit, Matau Advisory 31 FINANCIAL RESULTS RELEASE | HALF YEAR ENDED | 31 JANUARY 2018
Slide 32: Positioned to meet growing Asian energy demand
New Hope is well positioned to meet the growing energy demands of its Asian customers Coal operations Projects and development Maintaining current Improving safety Advancing Lenton Joint Optimising oil production production levels performance Venture Burton Mine Extending New Acland’s Securing appro
Slide 33: Disclaimer
Disclaimer IMPORTANT: The information in this document has been provided to you for information only by New Hope Corporation Limited (“NHC”) and is subject to change without notice. Nothing contained in this document constitutes investment, legal, tax or other advice. The information in this documen
Slide 34: Appendices
APPENDICES
Slide 35: Reconciliation of profit after tax to EBITDA
6 Months Ended 31 January (A$ millions) 2018 2017 Variance (%) Profit after tax 115.6 68.4 69% Income tax expense (49.6) (31.0) 60% Profit before income tax 165.2 99.4 66% Non regular items before tax - 19.4 -100% Profit before income tax and non regular items 165.2 80.0 107% Interest expense (0.2)
Slide 36: Net profit after tax reconciliation by segment
6 Months Ended 31 January 2017 (A$ million) Coal Mining QLD Coal Mining NSW Oil and Gas Total Net profit / (loss) after tax 30.8 39.7 (2.1) 68.4 Non regular items after tax 13.9 Recovery of below rail access charge 13.9 - - Impairment of available for sale investments (0.4) (0.4) Net profit / (loss)
Slide 37: Earnings per share reconciliation
6 Months Ended 31 January (cents per share) 2018 2017 Basic earnings per share (cents) (before non regular items) 13.9 6.6 Recovery of below rail access charge - 1.7 Impairment of available for sale investments - (0.1) Basic earnings per share (cents) (after non regular items) 13.9 8.2 Basic earning