New Hope Corporation Limited · ASX:NHC
New Hope — H1 2017 Earnings Presentation
51 slides from New Hope's earnings presentation, Mar 21, 2017
Slide 1: Financial Results Release Half Year Ended 31 January 2017
For personal use only INTEGRITY • RESPECT • ACCOUNTABILITY SAFETY • RESILIENCE • SUCCESS Financial Results Release Half Year Ended 31 January 2017 Presented by Robert Millner & Shane Stephan 21 March 2017 newhopegroup.com.au
Slide 2: Overview
For personal use only Overview Robert Millner Chairman 21 March 2017 2
Slide 3: Executive Summary
Executive Summary For personal use only • NPAT of $68.4 million • NPAT increase of 2,410% on previous first half • EBITDA of $130.2 million • Cash generated from operating activities of $119.7 million • Interim dividend declared of 4.0 cents per share up 100% from first half last year 21 March 2017
Slide 4: Safety Performance
For personal use only Safety Performance Shane Stephan Managing Director 21 March 2017 4
Slide 5: Safety Performance
Safety Performance Principle of Safe Production For personal use only • 3 year safety trend continues to improve • Similar performance in Q2 for Total Recordable Injury’s compared to same period in 2016 • To improve performance we have outlined a 5 year safety roadmap focussing on: – Safety Fundamen
Slide 6: Production and Sales
For personal use only Production and Sales 21 March 2017 6
Slide 7: Production and Sales Performance
Production and Sales Performance only Australian Operating Results 8,000 use Production 7,000 Sales 6,000 Tonnes - 000's For personal 5,000 4,000 3,000 2,000 1,000 - 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 HY2017 Years ended 31 July 21 March 2017 7
Slide 8: Production and Sales Tonnages
Production and Sales Tonnages HY 2017 For personal use only 6 Months Ended 31 January (million tonnes) Change 2017 2016 % ROM coal processed 7.3 5.1 45 Saleable coal production 4.4 2.5 75 Coal sold * 4.0 2.7 47 * Includes trade coal New Acland 2.3 2.2 4 Jeebropilly 0.4 0.3 33 Bengalla (40%) 1.7 ‐ n/
Slide 9: Coal Sales Volumes
Coal Sales Volumes HY 2017 For personal use only 6 Months Ended 31 January (million tonnes) Change 2017 2016 % Export * 3.8 2.6 46 Domestic 0.2 0.1 100 TOTAL * 4.0 2.7 48 * Includes trade coal 21 March 2017 9
Slide 10: Financial Overview
For personal use only Financial Overview 21 March 2017 10
Slide 11: Financial Overview
Financial Overview 1st HY 2017 For personal use only 6 Months Ended 31 January (A$m) Change 2017 2016 % Revenue from ordinary activities 374.6 229.4 63 Earnings before interest, tax, depreciation, amortisation 130.2 49.2 163 and non regular items ^ Earnings before interest, tax and non regular items
Slide 12: Financial Overview
Financial Overview HY 2017 For personal use only 6 Months Ended 31 January (cents per share) 2017 2016 Earnings per share before non regular items ^ 6.6 1.8 Earnings per share 8.2 0.3 Interim dividend 4.0 2.0 ^ Refer to Appendix for reconciliation of non IFRS financial information 21 March 2017 12
Slide 13: Group NPAT Comparison
For personal use only NPAT $m 0 20 40 60 80 100 21 March 2017 Actuals 31 January 2016 15.0 Bengalla 39.6 Coal Operations - Price, Foreign exchange and 22.6 Volume variances Group NPAT Comparison 2.5 WICET Before non regular items half year comparison Port Operations 4.1 Administration and other 6.3
Slide 14: Group EBITDA Comparison
For personal use only EBITDA $m 20 40 60 80 100 120 140 160 180 21 March 2017 Actuals 31 January 2016 49.2 Bengalla 76.8 Coal Operations - Price, Foreign exchange and 31.5 Volumes variances WICET 3.5 Group EBITDA Comparison Before non regular items half year comparison Administration and other 4.6 P
Slide 15: Group Cash Position
For personal use only Cash $m 50 70 90 110 130 150 170 190 210 230 21 March 2017 Net increase cash 31 January 91.3 2016 Inflows from operations 127.1 Capital Expenditure 43.1 Group Cash Position Cash position including term deposits Dividend paid 16.6 Tax 7.4 Interest received, Lease 0.8 repayments
Slide 16: Significant Items
Significant Items Impact of non-regular items on first half 2017 financial year results For personal use only The following events occurred during the period which are of a non regular nature and have resulted in a net increase to the groups after tax profit of $13.5 million: – Recovery of prior per
Slide 17: Cost Management
For personal use only Cost Management 21 March 2017 17
Slide 18: Cost Management
Cost Management For personal use only • Greater operating hours through roll out of noise attenuation equipment on mobile fleet. • Implementation of the fleet management system for New Acland expected to achieve efficiencies in the operations. • CHPP projects focused on the achievement of improved y
Slide 19: Cost Management
Cost Management Operations maintaining cost competitiveness For personal use only Cost of Sales/Product Tonne • There has been significant cost reductions achieved over recent years with the 50 current half year maintaining costs on a 40 per BCM basis and a slight reduction of 30 cost of sales per c
Slide 20: Bengalla Operations
For personal use only Bengalla Operations 21 March 2017 20
Slide 21: Bengalla Operations
Bengalla Operations For personal use only 21 March 2017 21
Slide 22: Bengalla Operations Locality Map
Bengalla Operations Locality Map For personal use only 21 March 2017
Slide 23: Bengalla Operations Overview
Bengalla Operations Overview For personal use only • Joint Venture partners from 1st March 2016 – New Hope Group 40% – Wesfarmers Resources 40% – Mitsui Coal 10% – Taipower 10% • Open cut mine, using a dragline truck and excavator method • High quality thermal coal for export • NHG share coal produc
Slide 24: Port Operations
For personal use only Port Operations 21 March 2017 24
Slide 25: Port Operations
Port Operations Queensland Bulk Handling For personal use only • QBH exported 3.1 million tonnes for the half year period • 13 November 2016 severe storm caused significant damage to loader and stockyard infrastructure • In-house recovery project team recommenced loading 2 days ahead of schedule (un
Slide 26: Community and Sustainability
For personal use only Community and Sustainability 21 March 2017 26
Slide 27: Our Vision and Values
New Hope is a successful diversified mining and energy business. We are proud of OUR our achievements and care about people and the environment. We will deliver sustainable growth and enduring shareholder value through our VISION people and quality assets. For personal use only INTEGRITY SAFETY We a
Slide 28: Social Responsibility: Building Stronger Communities
Social Responsibility Building Stronger Communities For personal use only New Hope is committed to partnering with local communities to strengthen the sustainability of the region during and post mining. • Developing effective relationships: a dedicated community team focused on relationship buildin
Slide 29: Social Responsibility: Part of the Community
Social Responsibility Part of the Community New Hope is part of the local community and the wider region. We pride ourselves on being an For personal use only integral part of the local communities where we operate: • No camps or FIFO: operational staff live locally. Employees and their families sho
Slide 30: New Acland Coal Mine Stage 3 Project Highlights
New Acland Coal Mine Stage 3 Project Highlights For personal use only • Federal Government approval 20 January 2017 • Final Land Court hearings in April 2017 (for State approval) • Continued validation of borehole data to update geographical and hydrogeological models 21 March 2017 30
Slide 31: New Acland Coal Mine Stage 3 Project Timeline
New Acland Coal Mine Stage 3 Project Project Timeline For personal use only Regulatory Approvals Engineering Stakeholders Dec ‘14 CG Report / Conditional Approval Enhanced Feb ‘15 EA and ML Process - Objections Interaction Program Jun ‘15 Detailed • Employees Design • Local Community Mar ‘16 Early a
Slide 32: Rehabilitation
Rehabilitation Land Management For personal use only • New Hope is committed to the progressive rehabilitation of land across its operations • Rehabilitation is progressive and occurs right behind the mining activities • To date 450 hectares of land has been fully rehabilitated at Acland • Clear dem
Slide 33: New Oakleigh Rehabilitation
For personal use only March 2017 • New Oakleigh Rehabilitation 21 March 2017
Slide 34: West Moreton Landholdings
West Moreton Landholdings Approximately 2800 hectares For personal use only 140 ha 15 ha 900 ha Ipswich 1800 ha 32 ha 2km 21 March 2017 34
Slide 35: Thermal Coal Markets
For personal use only Thermal Coal Markets 21 March 2017 35
Slide 36: Seaborne Thermal Coal Demand
Seaborne Thermal Coal Demand Coal is the preferred fuel for electricity in Asia due to reliability, technology and economics. Growth in Asia is expected to offset declines elsewhere. For personal use only • China – Import tariffs now zero – Domestic and seaborne prices determined by Government polic
Slide 37: Seaborne Thermal Coal Supply
Seaborne Thermal Coal Supply Quality Matters • Over the medium term we expect demand for higher quality coals to increase as the drive for For personal use only efficiencies in thermal generation continues. • New Hope is well positioned to service this growth with its existing production base, as we
Slide 38: Asia will drive future growth in energy demand
Asia will drive future growth in energy demand For personal use only • 55% of the world’s population lives here • Forecast to grow another ½ billion by 21 March 2017 2035 ‐ 40% of future population growth SOURCE: New Hope research, United Nations, World Bank, IEA
Slide 39: Oil and Gas
For personal use only Oil and Gas 21 March 2017 39
Slide 40: Oil and Gas: Bridgeport Energy
Oil and Gas Bridgeport Energy For personal use only 6 Months Ended 31 January (A$m) 2017 2016 Total revenue 8.8 4.7 Earnings before interest tax depreciation amortisation 0.2 (1.2) and non regular items Loss before tax (after non regular items) (2.9) (18.3) Less income tax benefit 0.8 7.1 Less petro
Slide 41: Oil and Gas Production and Revenue
Oil and Gas Production and Revenue For personal use only 21 March 2017 41
Slide 42: Oil and Gas Key Activities
Oil and Gas Key Activities For personal use only • Ten workovers across company assets improved production by 130bopd • 5 new development wells drilled, cased and suspended in Cuisinier • Closing of Kenmore, Bodalla and associated fields increased net production by 400 bopd • Awarded 3 new explorati
Slide 43: Outlook
For personal use only Outlook 21 March 2017 43
Slide 44: Outlook and Focus
Outlook and Focus New Hope has a long term strategy For personal use only • Market View – Demand growth underpinned by HELE technology throughout Asia – NHG coal optimally suited to this technology – Likely to continue to attract ongoing premiums over lower quality coals • Focus – Bengalla – improvi
Slide 45: Appendix
For personal use only Appendix 21 March 2017 45
Slide 46: Reconciliation of non IFRS Financial Information
Reconciliation of non IFRS Financial Information For personal use only 6 Months Ended 31 January (A$m) 2017 2016 Profit after tax 68.4 2.7 Income tax (expense) / benefit (31.0) 0.8 Petroleum resource rent tax expense - (4.8) Profit before income tax 99.4 6.7 Non regular items before tax 19.5 (13.5)
Slide 47: Reconciliation of Net Profit after Tax before and after non Regular Items
Reconciliation of Net Profit after Tax before and after non Regular Items For personal use only 6 Months Ended 31 January (A$m) Coal Mining Coal Oil and Gas TOTAL QLD Mining NSW 2017 Net profit / (loss) after tax 30.8 39.7 (2.1) 68.4 Non regular items after tax Recovery of below rail access charge 1
Slide 48: Reconciliation of Net Profit after Tax before and after non Regular Items
Reconciliation of Net Profit after Tax before and after non Regular Items For personal use only 6 Months Ended 31 January (A$m) Coal Coal Oil and Gas TOTAL Mining Mining QLD NSW 2016 Net profit / (loss) after tax 18.7 - (16.0) 2.7 Non regular items after tax Impairment of available for sale investme
Slide 49: Reconciliation of non IFRS Financial Information
Reconciliation of non IFRS Financial Information For personal use only 6 Months Ended 31 January 2017 2016 Basic earnings per share (cents) (before non regular items) 6.6 1.8 Recovery of below rail access charge 1.7 - Impairment of available for sale investments (0.1) (0.4) Land access compensation
Slide 50: 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 51: For personal use only
For personal use only INTEGRITY • RESPECT • ACCOUNTABILITY SAFETY • RESILIENCE • SUCCESS newhopegroup.com.au