Slide 1: Full Year Results FY2015: A year of delivery
Whitehaven Coal Limited FULL YEAR RESULTS FY2015 A year of delivery 13 AUGUST 2015
Slide 2: Disclosure
Disclosure STATEMENTS CONTAINED IN THIS MATERIAL, PARTICULARLY THOSE REGARDING THE POSSIBLE OR ASSUMED FUTURE PERFORMANCE, COSTS, DIVIDENDS, RETURNS, PRODUCTION LEVELS OR RATES, PRICES, RESERVES, POTENTIAL GROWTH OF WHITEHAVEN COAL LIMITED, INDUSTRY GROWTH OR OTHER TREND PROJECTIONS AND ANY ESTIMATE
Slide 3: Agenda
Agenda Highlights Safety performance Operational performance Financial results Community contribution Pan-Asian coal market trends Outlook Appendices 3 // FY2015 FULL YEAR RESULTS
Slide 4: Highlights
Highlights Continue to meet or exceed all targets Outstanding safety performance Record production results in FY2015 with further growth to come Operating EBITDA of $130.3m in FY2015, up 44% on FY2014 Increased operating margins in FY2015; Unit costs down for 5th successive half Robust c
Slide 5: Safety
Safety 5 // FY2015 FULL YEAR RESULTS
Slide 6: Improved safety = better performance
Improved safety = better performance Whitehaven and NSW Coal Industry TRIFR 25 – Introduction of Whitehaven’s 20 “Safehaven Rules” in early 2014 is delivering improved safety performance 15 10 – The TRIFR fell by 35% in FY2015 to end the year at 9.2 Introduction of “Safehaven Rules” 5 – Whitehaven’s
Slide 7: Operational performance
Operational performance 7 // FY2015 FULL YEAR RESULTS
Slide 8: ROM coal production
ROM coal production RECORDS CONTINUE TO TUMBLE Equity Basis – 000t FY2015 FY2014 Change Maules Creek 1,961 - 100% Narrabri 5,392 3,961 36% Open Cuts 4,852 5,216 (7%) Whitehaven Total 12,205 9,177 32% Whitehaven Managed ROM Coal Production (000's t) 18,000 16,000 14,000 12,000 10,000 8,000 6,000 4,00
Slide 9: Coal sales
Coal sales SECOND CONSECUTIVE YEAR OF RECORD SALES Equity Basis – 000t FY2015 FY2014 Change Maules Creek 1,327 - 100% Narrabri 4,950 3,602 37% Open Cuts (inc purchased coal) 4,582 5,124 (11%) Whitehaven Total 10,859 8,726 24% Whitehaven Coal Sales (100%, 000's t) 16,000 14,000 12,000 10,000 8,000 6,
Slide 10: Sales destination
Sales destination COAL SALES TO PREMIUM PAN-ASIAN MARKETS Thermal Coal Sales 3% – Over 82% of thermal coal sold into premium Asian 9% Japan markets 3% 3% Korea 39% 5% Taiwan – Sales mix 84% thermal and 16% metallurgical coal SE Asia Sth America Other – Overall thermal coal quality improves as produc
Slide 11: Maules Creek – 97% complete
Maules Creek – 97% complete PROJECT DECLARED COMMERCIAL 1 JULY 2015 – Construction completed with capex $27 million less than original estimate of $767 million – Installed capacity at $62 per annual tonne of product coal, significantly below many recent developments – Met coal production commences i
Slide 12: Maules Creek production ramping up
Maules Creek production ramping up HIGHER MARGIN MET COAL SALES TO BEGIN IN H1 FY2016 – Pre-commercial sales of 1.8Mt in FY2015 and run rate of 6.0Mtpa by end of June Maules Creek Saleable Coal Production (100%, 000's t) 1400 – Thermal coal sales currently achieving 1200 energy premium over GlobalCO
Slide 13: Narrabri - #1 LW mine in Australia?
Narrabri - #1 LW mine in Australia ? HIGHLY PRODUCTIVE LOW COST UNDERGROUND MINE – Record ROM and saleable coal Narrabri Saleable Coal Production (100%, 000's t) production in FY2015 8,000 – Record main and gate road 7,000 development of 19,800 metres ensures 6,000 longwall continuity 5,000 – Except
Slide 14: Stable Gunnedah production
Stable Gunnedah production STABLE PRODUCTION PROFILE AT LOWER COST – Three existing open cut mines to Whitehaven Open Cut Saleable Coal Production (100%, 000's t) produce between 5.1Mt – 5.3Mt ROM coal in FY2016 6,000 5,000 – Procurement initiatives, 30 tonne 4,000 axle loads, operational improvemen
Slide 15: Financial results
Financial results 15 //FY2015 FULL YEAR RESULTS
Slide 16: Financial highlights
Financial highlights SIGNIFICANT IMPROVEMENT IN OPERATIONAL OUTCOME AND CASH FLOW Profit and loss FY2015 FY2014 Comment EBITDA before significant Up 44% from lower unit costs, higher 130.3 90.4 items ($’m) production and no purchased coal Up 96% from improved EBITDA and Operating cash flow ($’m)
Slide 17: Pathway to profitability
Pathway to profitability PROFIT REPORTED FOR THE H2 EXCLUDING SIGNIFICANT ITEMS H2 H1 Financial Performance - A$ millions FY2015 FY2014 FY2015 FY2015 Revenue 391.5 371.8 763.3 755.4 Other income 3.3 7.4 10.7 8.5 Operating expenses (170.6) (186.9) (357.5) (407.2) Selling and distribution expenses (in
Slide 18: Significant items
Significant items NON CASH IMPACT ON THE RESULT There are three major non-cash significant items included in the full year results Impairment charge of $355m pre tax on several early stage exploration assets – Coal exploration tenement valuations have declined in the current coal price environment
Slide 19: Costs & margins
Costs & margins COSTS DRIVEN LOWER DURING THE YEAR H2 H1 FY2015 FY2015 FY2015 FY2014 – Average revenue declined by 6% YOY however in H2 the Coal Sales (equity basis, excl. weaker AUD offset the USD '000t 4,795 4,713 9,508 8,215 purchased coal) coal price fall Average revenue (excl. purchased coal $A
Slide 20: Costs driven into first quartile
Costs driven into first quartile DELIVERING SUSTAINABLE COST REDUCTIONS AND INCREASING MARGINS ASP, Costs and Margin (A$/t) $85 – Unit costs down 24% from H1 FY2013 to A$60/t in H2 FY2015 $80 $75 – Whitehaven increased margins in $70 second half of FY2015 to $15/t from $65 $10/t in the first half $6
Slide 21: Balance sheet and capital management
Balance sheet and capital management BALANCE SHEET IN GOOD SHAPE 30 Jun 2015 30 Jun 2014 $’m $’m – The new $1.4 billion finance facility arranged in March comprises a Cash on hand 102.4 103.2 combination of term loan, revolver and guarantee facilities maturing July Senior secured bank facilities 900
Slide 22: Capital allocation
Capital allocation MOST CAPITAL SPENT ON THE LOW COST MAULES CREEK PROJECT Capital Investment - $ Million FY2015 FY2014 – Continued capital discipline Mine Sustaining Capital without impacting production Open Cuts sustaining 4.4 8.1 Narrabri sustaining 9.3 8.4 – Strong cash flows from operations Tot
Slide 23: Community contribution
Community contribution 23 //FY2015 FULL YEAR RESULTS
Slide 24: Community contribution
Community contribution MAJOR CONTRIBUTOR TO THE LOCAL COMMUNITY – Whitehaven has a policy of employing locally and over 75% of its employees live in the region around its mines and operations – The policy adopted for Maules Creek is to offer employment opportunities to local aboriginal people, at 30
Slide 25: Financial contribution
Financial contribution WHITEHAVEN CONTRIBUTES TO THE LOCAL REGION, THE STATE AND AUSTRALIA – Significant contributions – Government taxes and royalties of $130m paid in FY2015 – Total of $215m spent with over 600 businesses in the local region – Employee wages and superannuation of $126m provide sig
Slide 26: Pan-Asian coal market trends
Pan-Asian coal market trends 26 //FY2015 FULL YEAR RESULTS
Slide 27: Global coal consumption
Global coal consumption GROWTH OF COAL DEMAND IN PAN-ASIAN MARKETS OF 5% PA World Coal Consumption (Mt) 9000 8000 – Global coal consumption grew 7000 to a new record high of 7.9Bt in 2014 6000 5000 4000 – Coal consumption in the Asian 3000 region has grown from 3.3Bt in 2000 2004 to 5.8Bn tonnes in
Slide 28: Whitehaven's markets
Whitehaven’s markets STRONG REGIONAL GROWTH FOR HIGH QUALITY COAL New Coal Fired Generation Capacity (GW) 20 – All countries in Whitehaven’s key 15 market region are adding new supercritical and ultra-supercritical coal 10 fired generating capacity 5 0 – Over 70 GW of new capacity by 2022 2015 2016
Slide 29: Coal's role in emission reduction
Coal’s role in emission reduction USING HIGH QUALITY COAL REDUCES CARBON EMISSIONS Higher quality coals like Gunnedah Basin coals required for the new power stations – Power station efficiency drives efficiency 35% CO2 =100 carbon emissions 5.39 Mt subcritical – Utilising USC or AUSC technology effi
Slide 30: Whitehaven redefining coal quality
Whitehaven redefining coal quality Thermal Coal - Ash vs Sulphur Ash (% a.d,) High Quality Coal 20.0 18.0 16.0 14.0 12.0 10.0 8.0 0.20 – Whitehaven produces some of 0.30 the highest quality coals sold Whitehaven in the Asian region 0.40 Premium Hunter 0.50 – As countries strive to reduce Valley (Jap
Slide 31: Narrabri – a case in point
Narrabri – a case in point IF JAPAN’S COAL FIRED GENERATING EFFICIENCY WAS ADOPTED ELSEWHERE2, CARBON DIOXIDE EMISSIONS WOULD REDUCE BY 1.5BT/Y1 – 39% of Whitehaven’s thermal coal is sold in Japan – The state of the art Isogo power station uses Narrabri coal and is currently testing Maules Creek coa
Slide 32: Outlook
Outlook 32 //FY2015 FULL YEAR RESULTS
Slide 33: Production growth to continue
Production growth to continue ONGOING GROWTH IN LOW COST HIGH MARGIN COAL Saleable Coal Production by Mine (Mt) 30.0 – Strong production growth to continue Forecast as Maules Creek ramps up to full 25.0 production in FY2019 20.0 – Saleable coal production for FY2016 15.0 likely to be in the range of
Slide 34: Vickery – Whitehaven's next project
Vickery – Whitehaven’s next project ANOTHER SIGNIFICANT GROWTH OPTION Approval granted by the NSW Government in September 2014 for a 4.5Mtpa open cut mine Location – About 25kms north of Gunnedah Resources and Reserves – Open cut Reserves of 200Mt within Resource of 505Mt, Underground Resources of 2
Slide 35: The next year
The next year Improve safety performance Continue ramp up and optimise performance of Maules Creek Further optimise Narrabri and prepare for wider face Expand coal sales into the premium markets - Japan, Korea, Taiwan and India Drive further cost reductions at each operation and return to
Slide 36: Our goal
Our goal To become Australia’s leading independent coal company 36 //FY2015 FULL YEAR RESULTS
Slide 37: Thank you
THANK YOU www.whitehavencoal.com.au
Slide 38: Appendices
Appendices 38 //FY2015 FULL YEAR RESULTS
Slide 39: Where we operate
Where we operate Maules Creek (75%) Tier One Mine – Reserves ~ 30 years, Permitted & Planned 13Mtpa – SSCC, PCI and high energy thermal Narrabri (70%) Tier One Mine – Reserves ~ 25 years, Permitted 8Mtpa, Planned 7Mtpa – PCI & low ash thermal Werris Creek (100%) – Reserves ~ 8 years, Permitted & Pla
Slide 40: Reconciliation – NPAT to operating EBITDA
Reconciliation – NPAT to operating EBITDA A$ millions FY2015 FY2014 Net loss before significant items (10.7) (28.4) Significant items after tax (332.0) (10.0) Net loss for the period (342.7) (38.4) Net loss for the period attributable to members (330.6) (38.4) Operating EBITDA before significant ite
Slide 41: Significant items
Significant items A$ millions FY2015 FY2014 Included within the balances presented on the face of the Consolidated Statement of Comprehensive Income: Operating expenses: Suspension of mining activities and office closures (0.6) (6.0) Impairment: Impairment of exploration and related assets, and MRRT
Slide 42: Balance sheet at 30 June
Balance sheet at 30 June A$ millions 30 Jun 2015 30 Jun 2014 Cash 102.4 103.2 Current receivables 101.1 70.3 Other current assets 90.0 61.1 Current assets 293.5 234.6 Non-current receivables 24.2 29.7 Other non-current assets 3,871.7 4,018.2 Total assets 4,189.4 4,282.5 Current payables 147.4 155.7
Slide 43: Full year cash flow
Full year cash flow A$ millions FY2015 FY2014 Net cash from operating activities 213.4 108.6 Net cash used in investing activities (436.4) (319.9) Net cash from financing activities 222.2 204.0 Cash and cash equivalents at 30 June 102.4 103.2 43 //FY2015 FULL YEAR RESULTS
Slide 44: Coal Resources – August 2015
WHITEHAVEN COAL LIMITED - COAL RESOURCES - AUGUST 2015 Measured Indicated Inferred Total Competent Report Tenement Resource Resource Resource Resources Person Date Resources Vickery Opencut Vickery Underground CL316/EL4699 EL5831/EL7407 EL8224/M L1464 M L1471 230 - 165 95 110 135 505 230 1 1 Jun-15
Slide 45: Coal Reserves – August 2015
Reserves WHITEHAVEN COAL LIMITED - COAL RESERVES - AUGUST 2015 Recoverable Reserves Marketable Reserves Competent Report Tenement Proved Probable Total Proved Probable Total Person Date Vickery Opencut CL316/EL4699/EL7407 – 200 200 – 178 178 1 Mar-15 Rocglen Opencut M L1620 3.8 0.9 4.6 2.9 0.7 3.5 1
Slide 46: Access to infrastructure
Access to infrastructure EXCESS TAKE OR PAY DECLINING RAPIDLY Port Capacity v Export Saleable Production (Mt) 25.0 22 22 20 20.0 19 19 17 – In FY2017 and beyond Whitehaven will 15 15.0 require additional port capacity 10 10.0 – Additional port capacity is readily available with negotiations ongoing