Slide 1: Financial Results
Financial Results For the six months ended 30 June 2023 23 August 2023
Slide 2: Important Information
Important Information • This presentation contains forward looking statements concerning the financial • In light of these risks, results could differ materially from those stated, implied or condition, results and operations of Channel Infrastructure NZ Limited (hereafter inferred from the forward-
Slide 3: Highlights and Operating Update
Highlights and Operating Update Rob Buchanan Chief Executive Officer
Slide 4: Continue to deliver on our strategy
Continue to deliver on our strategy Permanent decommissioning of the refinery process plant safely completed to plan and to budget Fully imputed ordinary interim dividend of 4.2 cents per share declared FY23 EBITDA, Normalised Free Cash Flow and Dividend guidance lifted Strong recovery in jet fuel v
Slide 5: A continued focus on safety
A continued focus on safety Total Recordable Incidents • Revised Health, Safety, Environmental and Operations board 6 sub-committee was established during 1H23, demonstrating 5 Channel’s on-going commitment to safety 4 3 • No Lost Time Incidents, and one recordable incident in 1H23 2 • Tier 1 incide
Slide 6: Investing to maintain strong environmental performance
Investing to maintain strong environmental performance CO2 emissions of included NZX50 companies [3] • Following transition, CHI is expected to account for less than t 0.1% of scope 1 and 2 CO2 emissions on the NZX50[3] in FY23 2,500,000 2,000,000 • On target to have largely eliminated scope 1 and 2
Slide 7: Continued strong recovery in jet fuel
Continued strong recovery in jet fuel Pipeline and TLF volumes • Pipeline and TLF Volumes up 7% on 2H22 across all fuel types: ML 1,000 • Jet fuel volumes up 30%, reflecting a strong recovery in 800 280 249 249 aviation demand; now at c.76% of pre-COVID volumes 600 257 258 222 400 275 264 275 282 27
Slide 8: Demand for jet fuel expected to increase in 2H23, with new long-haul flights announced
Demand for jet fuel expected to increase in 2H23, with new long-haul flights announced Additional 2023 Long-Haul flights[1, 2 and 3]: • Air Canada increasing Vancouver to Auckland summer flights by 20% • American Airlines resuming Los Angeles to Auckland flights from 21 December until 3 March 2024 •
Slide 9: Conversion and private storage projects on track
Conversion and private storage projects on track • Conversion costs remain within budget: Terminal and private storage conversion cost phasing $M Terminal conversion: $200-220m • c.$174 million spent on terminal and private storage conversion 175 Demolition (expected 10 years+): c.$50m 150 projects
Slide 10: Conversion projects substantially complete
Conversion projects substantially complete Status Still to complete Spent vs committed Shutdown and Decommissioning • Permanent decommissioning of the Complete Spent and committed refinery plant complete Remaining to be spent Business & • Full shutdown of refinery IT systems & Workforce infrastructu
Slide 11: Financial Update
Financial Update Denise Jensen Chief Financial Officer
Slide 12: Financial Highlights
Financial Highlights Continuing operations delivered an NPAT of $14.5 million in 1H23, up 32% from the last full 6 months of terminal operations (2H22) Fixed and variable terminal fees marginally exceed the pro rata "Take or Pay”, reflecting strong volumes and higher ancillary charges EBITDA margin[
Slide 13: Strong financial result, with EBITDA margin of 68% (up 3% on 2H22)
Strong financial result, with EBITDA margin of 68% (up 3% on 2H22) Profit & Loss from continuing operations • Terminal operations commenced on 1 April 2022 #039;m 1H23 2H22 1H22 • For comparative purposes, we report the results for the last 6 months of 2022, as well as the 3-month pcp Revenue 64.4 58.4
Slide 14: Revenue underpinned by take-or-pay commitments with growth from private storage
Revenue underpinned by take-or-pay commitments with growth from private storage Revenue 1H23 • Terminal Fees of $53.1 million (fixed plus variable) marginally (continuing operations) exceeded the pro rata Take-or-Pay due to strong volumes and ($’M) ancillary charges 3.2 2.9 5.1 0.0 23.7 • PPI adjust
Slide 15: Costs well controlled, with future savings secured through new electricity contracts
Costs well controlled, with future savings secured through new electricity contracts Operating costs 1H23 Electricity costs (continuing operations) ($’M) • Energy and utility costs comprise c.29% of our total costs 4.1 6.1 • Transmission and supply costs reset during the year • A new long-term fixed
Slide 16: Leverage remains within the targeted range
Leverage remains within the targeted range • Strong cash flows from operations, funded 93% conversion spend and capex • Net debt increased to $295 million as expected with the conversion spend and FY22 dividend • Leverage at 3.6x[2] within the targeted range of 3-4x • Gearing at 37%[3] (vs covenants
Slide 17: 84% of net debt fixed with significant hedge protection in place
84% of net debt fixed with significant hedge protection in place Debt maturity profile as at 30 June 2023 • Debt facilities of $380 million with significant liquidity headroom $M 175 available ($81.5 million as at 30 June 2023) 150 • Existing facilities and operating cashflows, provides sufficient 1
Slide 18: FY23 EBITDA guidance upgraded
FY23 EBITDA guidance upgraded Detailed guidance provided ahead of the transition, upgraded in November 2022, and with a further upgrade to FY23 guidance in August 2023 [1][2]: Indicative FY23 Financial metrics Updated Nov-22 • Increase in EBITDA reflects increased revenue through higher-than- Guidan
Slide 19: Delivering to shareholders
Delivering to shareholders • The Board is committed to delivering stable ordinary dividends over time to shareholders, while maintaining credit metrics consistent with a shadow investment grade credit rating of BBB+ • Dividend policy of a pay-out of 60-70% of normalised Free Cash Flows, (net cash ge
Slide 20: Strategy Update and Outlook
Strategy Update and Outlook Rob Buchanan Chief Executive Officer
Slide 21: Material progress made towards transition and climate change targets
Material progress made towards transition and climate change targets TARGET PROGRESS TO DATE At least 90% of employees seeking new employment • Extensive program of workforce transition support continues for decommissioning and Just Transition find new roles, or have transition-related staff who hav
Slide 22: Making progress on realising value from decommissioned refinery plant
Making progress on realising value from decommissioned refinery plant • In July 2023, US-based Seadra Energy Inc was granted an option to purchase permanently decommissioned parts of the former refinery for total consideration of US$33.875 million:[1] • 6 months to consider the purchase certain asse
Slide 23: Significant progress on delivering 2023 priorities
Significant progress on delivering 2023 priorities - A revised Health, Safety, Environmental and Operations board sub-committee established Safe, reliable, and cost-efficient - Strategic Asset Management Plan currently under third party review terminal operation and - Independent review of site safe
Slide 24: Channel Infrastructure NZ Q&A
Channel Infrastructure NZ Q&A