Whitehaven Coal Limited · ASX:WHC
Whitehaven Coal — H1 FY24 Earnings Presentation
45 slides from Whitehaven Coal's earnings presentation, Feb 15, 2024
Slide 1: Half Year Results FY24
Half Year Results FY24 15 February 2024 Authorised for release by the Board of Whitehaven Coal Limited Investor contact Media contact Kylie FitzGerald Michael van Maanen +61 2 8222 1155, +61 401 895 894 +61 8222 1171, +61 412 500 351 kfitzgerald@whitehavencoal.com.au mvanmaanen@whitehavencoal.com.au
Slide 2: Contents and Disclaimer
Contents Disclaimer This presentation contains information in a summary form and does not purport to be complete. It is qualified by any other information that Whitehaven’s markets Whitehaven discloses to the ASX. 1. FORWARD LOOKING STATEMENTS 2. H1 FY24 Results Statements contained in this material
Slide 3: H1 FY24 highlights
H1 FY24 highlights Transformational Resilient pricing of 10.3Mt ROM 16% improvement1 in metallurgical coal high-CV thermal underpinning employee and contractor total production up 17% Whitehaven’s realised price recordable injury frequency acquisition announced, reflecting solid performance with com
Slide 4: Acquisition completion is progressing as planned
Acquisition completion is progressing as planned A highly attractive acquisition that transforms Whitehaven into the leading ASX-listed metallurgical coal producer1 Rationale Meeting key milestones ▪ Highly attractive and earnings accretive acquisition ✓ Execution and integration project ▪ Provides
Slide 5: Whitehaven Coal's Markets
Whitehaven Coal’s Markets
Slide 6: High quality thermal products into premium markets, growing metallurgical coal business
Whitehaven has been delivering high quality thermal products into premium markets, and is growing its metallurgical coal business 8.6M tonnes managed sales volumes in H1 FY241 2 New Caledonia Other Europe 2% 2% Indonesia Europe 1% 5% Malaysia 1 China 11% Japan 2 8 Japan Taiwan 52% 13% 2 5 Korea Kore
Slide 7: Producing the highest quality seaborne thermal coal
Producing the highest quality seaborne thermal coal 91% of our thermal coal exports >5600 kcal in CY23 Percentage of thermal coal exports by quality – CY231 100% 90% kcal/kg NAR2 H1 FY24 quality outcomes 80% • Average energy content of WHC’s 70% <4200 coal in H1 FY24 was ~6100 kcal 60% 4200 – 5000 5
Slide 8: Providing energy security for our customers
Providing energy security for our customers Our coal provides a significant proportion of electricity to our key customer countries totalling ~37 TWh annually Contribution to baseload electricity from WHC managed coal supplied into Japan, South Korea & Taiwan (JKT) and Malaysia1 Japan Taiwan WHC coa
Slide 9: Post acquisition, WHC transforms into a metallurgical coal business
Post acquisition, WHC transforms into a metallurgical coal business while continuing to supply high-CV thermal coal to key markets Pro-forma sales volumes by geography1 Europe Malaysia 2% Other¹ China 3% 14% Taiwan Japan 9% 47% Korea 9% Japan India 16% India Korea FY24F Revenue contribution by type2
Slide 10: Significant supply gap forecast for high-CV thermal coal
There is a significant supply gap forecast for high-CV (HCV) thermal coal Commodity Insights forecast seaborne supply & demand for High CV coal (>5850 NCV) 400 • Commodity Insights studied HCV supply 350 and demand taking into account limited expansion projects in the pipeline 300 139Mt • Demand is
Slide 11: Substantial supply gap expected for metallurgical coal
A substantial supply gap is also expected for metallurgical coal Global supply / demand for HCC1 (Mt) 300 74Mt • Metallurgical coal is essential for the global energy 250 Shortfall transition as well as developing countries’ 200 infrastructure growth 150 Supply 100 Demand • The structural shortfall
Slide 12: H1 FY24 external market drivers
H1 FY24 external market drivers Strong underlying demand continues to underpin good pricing outcomes for HCV thermal and metallurgical coal Supply and demand Pricing • Underlying demand for HCV thermal coal for • Resilient thermal coal prices with gC NEWC average of baseload energy and to support th
Slide 13: H1 FY24 Results
H1 FY24 Results
Slide 14: Safety performance
Safety performance Safety is as important as ever 25 20 ROM coal production (Mt) 15 and TRIFR Whitehaven recorded 10 a 6 month TRIFR for employees and 5 contractors of 3.96 3.96 0 in H1 FY24 ROM coal production (Mt) Total Recordable Injury Frequency Rate (TRIFR) 14
Slide 15: H1 FY24 financial results
H1 FY24 financial results Resilient coal prices and solid production support strong underlying earnings; acquisition related expenses including FX movements impact statutory profits Underlying EBITDA $623 million Managed ROM production Acquisition related FX loss - $71 million 10.3M tonne Transactio
Slide 16: ROM coal production and sales
ROM coal production and sales Strong H1 performance from Maules Creek and Gunnedah Open Cut mines Whitehaven Managed ROM Coal Production (Mt) Whitehaven Managed Coal Sales (Mt) 10.3 9.4 8.8 8.8 2.6 8.4 8.2 1.7 0.4 0.4 0.2 3.6 2.5 2.3 3.0 5.7 6.0 3.7 4.2 3.9 3.6 2.1 2.1 1.7 1.3 1.7 1.3 H1 FY23 H2 FY2
Slide 17: Maules Creek
Maules Creek Benefiting from improved labour supply and drier weather Managed ROM coal production (Mt) • H1 FY24 managed ROM production 6.0Mt, 54% above H1 FY23 of 3.9Mt Guidance range • Improved labour supply, and favourable 10.1– 11.2Mt weather conditions supported improved production • Decision t
Slide 18: Gunnedah Open Cuts
Gunnedah Open Cuts Consistent operational performance in H1 FY24 Managed ROM coal production (Mt) • H1 FY24 ROM production 1.7Mt, 31% above H1 FY23 reflecting weather and labour supply improvements coupled with 1.6 additional contractor and haulage 1.3 1.4 capacity 1.2 0.1 • Tarrawonga and Werris Cr
Slide 19: Narrabri
Narrabri Operational challenges in LW203 Managed ROM coal production (Mt) • H1 FY24 managed ROM production 2.6Mt, 28% below H1 FY23 of 3.6Mt • Operational performance in LW203 was impacted by geological intrusions Guidance range 5.1 – 5.7Mt (washouts) and equipment reliability • A number of changes
Slide 20: Narrabri: Mining of LW203 will continue into FY25
Narrabri Mining of longwall panel LW203 will continue into FY25 • The longwall move to LW203 took place in June 2023 quarter with a major rehanding of the longwall • Washouts in LW203 were a known feature but have affected production more than planned; washouts expected to dissipate in LW204 • Cut &
Slide 21: Financial history
Financial history Solid H1 financial results following two consecutive record years Revenue ($m) Underlying EBITDA ($m) Underlying NPAT1 ($m) 1 H1 FY24 1,589.3 H1 FY24 622.8 H1 FY241 372.3 H1 FY23 3,809.2 H1 FY23 2,661.4 H1 FY23 1,787.6 FY23 6,064.7 FY23 3,976.0 FY23 2,661.4 FY22 4,920.1 FY22 3,060.
Slide 22: EBITDA margin
EBITDA margin Margins remain attractive with solid pricing and higher costs H1 FY24 H1 FY23 Coal sales Mt 6.6 6.4 (equity basis, excluding purchased coal and coal reservation sales) Average revenue A$/t 204 510 (excluding purchased coal, coal reservation sales & after applicable royalties) Average c
Slide 23: EBITDA H1 FY24 vs H1 FY23
EBITDA ($m) H1 FY24 vs H1 FY23 (before acquisition related expenses) $m Achieved Prices H1 FY24 H1 FY23 Thermal (US$/t) 144 381 Metallurgical (US$/t) 167 285 Overall (A$/t) 220 552 FX AUD:USD 0.65 0.67 (1,964) 2,661 35 (101) (8) 623 H1 FY23 Price (net of royalty) Sales Volume Costs Other H1 FY24 23
Slide 24: Unit costs H1 FY24 vs H1 FY23
Unit costs ($A/t) H1 FY24 vs H1 FY23 $/t 4 1 10 111 96 H1 FY23 Narrabri Open Cut Mines Safeguard Mechanism H1 FY24 24
Slide 25: Cash generation to end H1 FY24 at $1.5b net cash
Cash generation to end H1 FY24 at $1.5b net cash $m 1 (927) 523 (362) 2 (342) (40) 0 2,652 1,504 0 30-Jun-23 Cash generated Income tax Investing Returns to Repayments & 31-Dec-23 from operations payments shareholders Other 25 1. Included within income taxes paid is $886.0 million paid in relation to
Slide 26: Net cash and liquidity
Net cash and liquidity $m 31 Dec 2023 30 Jun 2023 Net cash outlook Cash on hand 1,599 2,775 • Maintaining a strong balance sheet ECA1 (34) (39) • Disciplined capital allocation Finance leases (70) (87) framework in place Capitalised upfront borrowing fees 8 3 • Cash balance held in USD together with
Slide 27: Capital allocation framework
Capital allocation framework Disciplined capital allocation builds resilience and delivers shareholder value Operating cash flows 1 2 3 Maintain & optimise Retain cash / maintain Return to shareholders operations balance sheet strength Dividends Buy-backs • Sustaining capex, leases, • Maintain liqui
Slide 28: FY24 Guidance
FY24 Guidance
Slide 29: FY24 guidance
FY24 guidance Key elements H1 FY24 Actual FY24 Guidance Comments Excludes any contribution from Daunia Managed ROM Coal Mt 10.3 18.7 – 20.7 and Blackwater post acquisition close Production Tracking within guidance Maules Creek Mt 6.0 10.1 – 11.2 Tracking around top end of range Narrabri Mt 2.6 5.1 –
Slide 30: Whitehaven's FY24 focus areas
Whitehaven’s FY24 focus areas Acquisition, operational reliability and cost management are priority areas Current operations Acquisition Capital allocation • Safety and environmental • Completing acquisition • Funding acquisition while management maintaining liquidity and ─ Talent management / organ
Slide 31: Broker analyst Q&A
Broker analyst Q&A
Slide 32: Appendices
Appendices
Slide 33: Expanded portfolio post acquisition
Expanded portfolio post acquisition Whitehaven will be the leading ASX-listed metallurgical coal producer1 Pro-forma structure Port of Hay Point Dalrymple Bay Terminal 100% 100% Daunia Blackwater NSW Queensland Blackwater RG Tanna Coal Terminal Maules Creek Narrabri Tarrawonga Blackwater Daunia Oper
Slide 34: Overview of acquired assets
Overview of acquired assets Established metallurgical coal mining operations with combined ROM production of ~20 Mtpa sold via export markets Daunia Blackwater Product type and mix1 ~80% HCC / ~20% PCI ~65 - 70% HCC / ~25 - 30% SSCC Mine type and method Open cut / truck & shovel Open cut / draglines
Slide 35: Thermal coal prices
Thermal coal prices (US$/t)1 Stock building and a mild Northern Hemisphere winter has resulted in lower spot demand and price moderation ahead of expected upward price pressure for gC NEWC $500 Russia invades Stock building, Russian Ukraine H1 FY24 Dec 24 $450 sanctions, restructuring of trade flows
Slide 36: Metallurgical coal prices
Metallurgical coal prices (US$/t)1 China’s reopening to Australian coal continues to support prices $700 H1 FY24 Dec 24 $600 Index (USD) (average) (mthly index) Platts PLV HCC 298 326 $500 Platts LV PCI 177 174 Platts SSCC 164 155 $400 • Steel demand and met coal pricing $300 remains dictated by Chi
Slide 37: Profit and Loss
Profit and Loss $m H1 FY24 H1 FY23 Revenue 1,589.3 3,809.2 Other income 2.4 4.9 Operating expenses (514.1) (381.8) Coal purchases (94.9) (257.0) Royalties (114.6) (280.7) Rail, port and marketing (203.3) (196.9) Admin and other expenses (42.0) (36.3) Underlying EBITDA 622.8 2,661.4 Acquisition relat
Slide 38: Costs
Costs Unit cost calculation The unit cost can be calculated off the face of the P&L. It includes operating H1 FY24 Costs expenses, selling & distribution expenses, administration expenses (net of sundry revenues) and share-based payment expenses. Logistics, Labour 21% Coal purchases, royalties, depr
Slide 39: FY24 capital expenditure guidance
FY24 capital expenditure guidance Capex guidance as revised in December quarterly production report FY24 H1 FY24 ($m) Guidance Includes Actual (revised)1 • Open cuts fleet overhauls, sustaining capex • Narrabri sustaining capex Operations 94 175 – 195 • Narrabri 200 Series mains development • Narrab
Slide 40: Greenhouse gas emissions
• Scope 1 emissions arise primarily from Focused on Scope 1 and 2 emissions, Narrabri fugitive emissions and Maules Creek diesel consumption TCFD reporting and ISSB Standards – Improved reporting accuracy for Maules Creek since FY21 through use of site specific fugitive emissions (versus NGER defaul
Slide 41: Scope 1 emissions by source
Scope 1 emissions by source Our Scope 1 emissions are predominantly fugitive emissions from Narrabri and diesel from Maules Creek Scope 1 emissions by facility1 FY23 Scope 1 emissions by source1 FY22 FY23 0.4% Other 787 k tonnes CO2e 520 33% 67% Diesel Fugitive consumption emissions 266 258 67 73 47
Slide 42: Our coal is lower in emissions
Our coal is lower in emissions Demand for high quality, high-CV, low ash coal is increasing in efforts to reduce CO2-e emissions Coal-fired power plants – GHG emissions per MWh sent out1 • Whitehaven’s thermal coal is used in high-efficiency, low emissions (HELE) electricity generation including 42%
Slide 43: Highly engaged people and communities
Highly engaged people and communities Approx. 75% 10.5% 17.5% 5% increase in of 2,750-strong of workforce identify female employee workforce engagement workforce based in as Aboriginal and/or participation in our scores to 6.6 out of 10 local communities Torres Strait Islander workforce1 up from 15.
Slide 44: Local community sentiment towards Whitehaven has improved
Local community sentiment towards Whitehaven has improved to its highest level yet Overall positivity has increased significantly. Among those aware of Whitehaven, slightly over half were positive (51%), up from 44% in 2022. Only 18% have a negative opinion, compared to 21% last year. 60 50 40 NET %
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