Thungela Resources Limited · JSE:TGA
Thungela Resources — FY2023 Earnings Presentation
25 slides from Thungela Resources's earnings presentation, 2024
Slide 1: Annual Results Presentation
[OFFICIAL] ANNUAL RESULTS PRESENTATION for the year ended 31 December 2023
Slide 2: Cautionary Statement
[OFFICIAL] CAUTIONARY STATEMENT Disclaimer: This presentation has been prepared by Thungela Resources Limited (“Thungela”) and comprises the written materials/slides for a presentation concerning Thungela and its affiliates (together, the "Group"). By attending this presentation and/or reviewing the
Slide 3: 2023 Highlights
[OFFICIAL] 2023 HIGHLIGHTS July Ndlovu | Chief Executive Officer
Slide 4: Responsibly Creating Value Together for a Shared Future
[OFFICIAL] RESPONSIBLY CREATING VALUE TOGETHER FOR A SHARED FUTURE SAFETY FINANCIAL PERFORMANCE Fatality Profit for the period Net cash One (2022: None) R5.0 billion (2022: R18.2 billion) R10.2 billion (2022: R14.7 billion) Total Recordable Case Frequency Rate Adjusted operating free cash flow Earni
Slide 5: Executing on Our Strategic Priorities
[OFFICIAL] EXECUTING ON OUR STRATEGIC PRIORITIES MAXIMISING VALUE CREATING FUTURE OPTIMISING DRIVING OUR ESG SAFETY FROM EXISTING DIVERSIFICATION CAPITAL ASPIRATIONS ASSETS OPTIONS ALLOCATION Operate fatality free Employee and Elders Ensham Dividends community trusts1 First coal in March Acquisition
Slide 6: Safety Is Our First Value
[OFFICIAL] SAFETY IS OUR FIRST VALUE KEY SAFETY METRICS (South African operations) • Fatality in 2023 following December 2022 incident • We remain committed to operating a fatality-free business 1.51 1.48 34 1.41 1.40 • Levers to improve safety performance include: 1.35 ➢ Continued focus on three sa
Slide 7: Elders Progressing Well
[OFFICIAL] ELDERS PROGRESSING WELL FIRST COAL DELIVERED AHEAD OF SCHEDULE • First bord and pillar coal delivered ahead of initial estimates on 1 March 2024 • Zero lost-time injuries • Tracking on budget Spent R1.2 billion Expected capex in 2024 R800 million KEY FIGURES (approximately) Capex R2.0 bil
Slide 8: Zibulo North Shaft Project Commenced
[OFFICIAL] ZIBULO NORTH SHAFT PROJECT COMMENCED ON TRACK AND ON BUDGET • Life extension of Zibulo underground operation to 2038 • Underground development to start in Q3 2024 • Zero lost-time injuries Spent R590 million Expected capex in 2024 Expected capex in 2025 R950 million R870 million KEY FIGUR
Slide 9: Ensham: A Milestone Acquisition
[OFFICIAL] ENSHAM: A MILESTONE ACQUISITION LOCATION OF ENSHAM IN THE STATE OF QUEENSLAND, AUSTRALIA • Sungela purchased 85% interest in the Ensham Mine for net cash outflow of R2.8 billion ➢ Remaining 15% interest owned by LX International • Thungela owns 73.5% of Sungela, with balance held by co-in
Slide 10: Building Our Export Marketing Capability
[OFFICIAL] BUILDING OUR EXPORT MARKETING CAPABILITY • Marketing agreement with Anglo American Marketing Limited will conclude at end of May MARKETING COAL 2024 FROM OUR PORTFOLIO • Thungela Marketing International (TMI) will assume responsibility for management of integrated export marketing activit
Slide 11: Working to Address Rail Performance
[OFFICIAL] WORKING TO ADDRESS RAIL PERFORMANCE TFR1 ANNUAL VOLUMES AND ANNUALISED AVERAGE RUN RATES (Mt per annum) • Industry railed volume of 47.9Mtpa in 2023, deterioration of 5% from last year 71.1 70.1 • Mutual cooperation agreement establishes framework for procurement of critical spares on 58.
Slide 12: Financial Review
[OFFICIAL] FINANCIAL REVIEW Deon Smith | Chief Financial Officer
Slide 13: 2023 Results
[OFFICIAL] 2023 RESULTS ADJUSTED EBITDA ADJUSTED OPERATING EARNINGS FREE CASH FLOW PER SHARE R8.5 billion R6.8 billion R37.66 (2022: R29.5 billion) (2022: R18.1 billion) (2022: R127.08) EXPORT SALEABLE EXPORT EQUITY SALES FOB COST PER EXPORT PRODUCTION TONNE (excluding royalties) SOUTH AFRICA ENSHAM
Slide 14: Benchmark and Realised Coal Prices
[OFFICIAL] BENCHMARK AND REALISED COAL PRICES • South African coal markets softened due to BENCHMARK THERMAL COAL PRICES (USD per tonne) subdued European demand driven by mild winter and high coal and gas stocks 450 • Australian coal markets shaped by high stocks in 400 Japan and South Korea and slo
Slide 15: Export Saleable Production
[OFFICIAL] EXPORT SALEABLE PRODUCTION • SA export saleable production 6.9% lower EXPORT SALEABLE PRODUCTION (Mt) year-on-year due to TFR rail underperformance ➢ Curtailed production by stopping three underground sections 13.1 13.1 0.9 2.1 12.2 0.9 • Ensham production of 860kt for the four months sin
Slide 16: Export Sales
[OFFICIAL] EXPORT SALES • Swift and decisive response to TFR's persistent EXPORT EQUITY SALES (Mt) poor performance: ➢ Curtailed production at three of our underground mines 13.4 12.8 0.3 0.3 ➢ Improved rail distribution pattern through 12.2 0.9 2.1 0.3 additional sidings ➢ Efficiencies at our rapid
Slide 17: FOB Cost per Export Tonne for South Africa
[OFFICIAL] FOB COST PER EXPORT TONNE FOR SOUTH AFRICA • FOB cost per tonne increased mainly due to: FOB COST PER EXPORT TONNE (R per tonne) ➢ Impact of lower volumes ➢ Inflation on our operating costs of 9.6% ➢ Lower domestic sales revenue offset 36 25 1,134 1,079 2.1 69 78 1,084 50 64 • Achieved R5
Slide 18: Adjusted EBITDA
[OFFICIAL] ADJUSTED EBITDA • Decline in earnings mainly driven by lower ADJUSTED EBITDA (R billion) benchmark coal prices • Partially offset by weaker average exchange rate, and lower royalty expenses 29.5 • Ensham contribution to adjusted EBITDA of R738 million • EBITDA margin of 28% (2022: 58%) 21
Slide 19: Adjusted Operating Free Cash Flow
[OFFICIAL] ADJUSTED OPERATING FREE CASH FLOW • Release of working capital of R2.7 billion ADJUSTED EBITDA TO ADJUSTED OPERATING FREE CASH FLOW (R billion) ➢ Reduction in receivables mainly driven by lower export prices ➢ Increase in payables due to inflation and 6.6 ramp-up in capex spend 2.1 2.7 •
Slide 20: Prioritising Returns to Shareholders
[OFFICIAL] PRIORITISING RETURNS TO SHAREHOLDERS • Cash reserved for key approved projects CAPITAL ALLOCATION1 (R billion) ➢ Elders and Zibulo North Shaft underpin the long-term cost competitiveness of the portfolio 10.2 • Final dividend of R10 per share 4.2 ➢ Total dividend (interim + final) of R20
Slide 21: Outlook for 2024
[OFFICIAL] OUTLOOK FOR 2024 SOUTH AFRICA ENSHAM 2023 2023 Metric 2024 Metric 2024 Actual Actual Export saleable production Mt 12.2 11.5 - 12.5 Export saleable production2 Mt 2.9 3.2 - 3.5 FOB cost per export tonne R/tonne 1,134 1,180 – 1,3001 FOB cost per export tonne AU$/tonne 155 150 - 1603 FOB co
Slide 22: Conclusion
[OFFICIAL] CONCLUSION July Ndlovu | Chief Executive Officer
Slide 23: Delivering on Our Purpose
[OFFICIAL] DELIVERING ON OUR PURPOSE Responsibly Creating value together For a shared future • Unwavering commitment to • Optimise capital allocation and • Build an international, eliminate fatalities and injuries generate superior shareholder sustainable and long-life returns business • Make a last
Slide 24: Q&A
[OFFICIAL] Q&A
Slide 25: Annexure 1: Ensham Accounting
[OFFICIAL] ANNEXURE 1: ENSHAM ACCOUNTING • Income Statement STRUCTURE: LEGAL OWNERSHIP AND EFFECTIVE ECONOMIC INTEREST ➢ Revenue consolidated at 100% (incl. 15% related to LX International) Effective Effective economic economic ➢ Operating and other costs recognised at 85% share of share of earnings