Salungano Group Limited · JSE:SLG
Salungano — H1 2023 Earnings Presentation
24 slides from Salungano's earnings presentation, September 2022
Slide 1: Interim Results Presentation
INTERIM RESULTS PRESENTATION For the six months ended 30 September 2022
Slide 2: Disclaimer
DISCLAIMER Disclaimer Ref Title Slide This presentation is published solely for informational purposes and does not constitute investment, legal, tax or other advice nor is it to be relied upon in making an investment decision. Information contained herein has been taken from sources considered by S
Slide 3: HY22 Operational and Financial Overview
HY22 OPERATIONAL AND FINANCIAL OVERVIEW COAL MINED COAL SALES* REVENUE EBITDA** 2.7Mt 4.8Mt 2.3 billion R181 million (HY22: 4.8Mt) (HY22: 4.9Mt) (HY22: R2.7 billion) (HY22: R416 million) NET LOSS CASH GENERATED NET DEBT EPS R83 million R262 million R578 million 19.64 cents loss (HY22: R81 million pr
Slide 4: Mining Segment
MINING SEGMENT SIF Salungano GROUP
Slide 5: Health and Safety
HEALTH AND SAFETY Lost Time Injury (LTI) Performance Total Recordable Injury Frequency Rate (TRIFR) Performance 1,98 1,98 1 1 0,35 0,35 0,93 0,69 0,75 0,38 0,35 0,65 0,51 0,54 Apr 22 May 22 Jun 22 Jul 22 Aug 22 Sep 22 Apr 22 May 22 Jun 22 Jul 22 Aug 22 Sep 22 LTI LTIFR (FYTD) TRIFR (Month) TRIFR (FY
Slide 6: Vanggatfontein
VANGGATFONTEIN ROM Production and Sales (Kt) Factors impacting performance • The mine was in care and maintenance until September 2022 194 Key focus areas • Ramp up production • Secure Eskom supply contract 138 123 110 88 65 58 52 23 16 Apr 22 May 22 Jun 22 Jul 22 Aug 22 Sep 22 ROM Sales 6
Slide 7: Elandspruit
ELANDSPRUIT ROM Production and Sales (Kt) Factors impacting performance 237 242 • Mining contractor issues impacted production Key focus areas 210 • Manage mining contractor to increase production at the mine 175 172 136 137 137 138 125 127 114 Apr 22 May 22 Jun 22 Jul 22 Aug 22 Sep 22 ROM Sales 7
Slide 8: Khanyisa
KHANYISA ROM Production and Sales (Kt) 53 53 Factors impacting performance 50 • Mine approaching end of life of mine 44 Key focus areas 42 • Appoint a short-term mining contractor to extract coal on the Catwalk area 33 28 24 23 16 14 3 Apr 22 May 22 Jun 22 Jul 22 Aug 22 Sep 22 ROM Sales 8
Slide 9: Moabsvelden
MOABSVELDEN ROM Production and Sales (Kt) 512 Factors impacting performance 468 • Low availability of the product hauling trucks impacted performance negatively 406 402 405 Key focus areas • Continue to ramp up production to steady state 285 251 238 206 197 153 136 Apr 22 May 22 Jun 22 Jul 22 Aug 22
Slide 10: Mining Segment ROM and Sales Performance
MINING SEGMENT ROM AND SALES PERFORMANCE ROM Production (Kt) Mining Sales (Kt) 4 757 4 543 700 4 121 (433) (283) (406) (1 479) 21 2 741 (266) (292) HY22 Vanggatfontein Elandspruit Khanyisa Moabsvelden HY23 HY22 Vanggatfontein Elandspruit Khanyisa Moabsvelden HY23 10
Slide 11: Trading Segment
TRADING SEGMENT SIF Salungano GROUP
Slide 12: Overview
OVERVIEW • Early retirement of Michael Richard Berry as the Chief Executive Officer and a director of Wescoal Trading Proprietary Limited - Thivhafuni Tshithavhane appointed as acting Chief Executive Officer • The company’s name has changed to Salungano Trading (Pty) Ltd effective 6 June 2022 • No r
Slide 13: Volumes and Revenue Performance Trend
VOLUMES AND REVENUE PERFORMANCE TREND Volumes – Kt Revenue – Rm 181 212 210 157 144 186 126 85 FY23 Q1 FY22 Q1 FY23 Q2 FY22 Q2 FY23 Q1 FY22 Q1 FY23 Q2 FY22 Q2 • Sales volumes for Q1 in FY23 reduced by 46% to 85Kt (Q1 FY22: 157Kt) mainly due to a 65% reduction in Kelvin sales • Sales volumes in Q2 in
Slide 14: Financials
FINANCIALS SIF Salungano GROUP
Slide 15: Financial Salient Features
FINANCIAL SALIENT FEATURES REVENUE GROSS PROFIT EBITDA R2.3 billion R167 million R181 million (HY22: R2.7 billion) (HY22: R342 million) (HY22: R416 million) CASH GENERATED NET DEBT GEARING* R262 million R578 million 44% (HY22: R288 million) (HY22: R905 million) (HY22: 49%) • Lower revenue due to non
Slide 16: Statement of Comprehensive Income – Extracts
STATEMENT OF COMPREHENSIVE INCOME – EXTRACTS HY23 HY22 Change Rm Rm % • Lower revenue due to lower Eskom demand Revenue 2 322 2 666 -13% and limited supply of coal for the inland market due to increased demand in the export market Gross profit 167 342 -51% • Gross profit decreased by 51% due to high
Slide 17: Segmental Contributions and Revenue Diversity
SEGMENTAL CONTRIBUTIONS AND REVENUE DIVERSITY Revenue diversity Segmental contribution HY23 Revenue HY23 EBITDA HY23 15% -4% 54% 31% 104% Eskom Mining Export Trading Other Revenue HY22 EBITDA HY22 2% 44% 55% 1% 98% 17
Slide 18: Statement of Financial Position
STATEMENT OF FINANCIAL POSITION Audited Audited 30 Sep 2023 30 Sep 2022 Rm Rm Non-current assets 3 099 2 918 • Increase in PPE due to the acquisition of new assets and an increase in rehabilitation assets Property, plant and equipment 2 659 2 480 • Lease receivable decreased due to termination Goodw
Slide 19: Statement of Financial Position
STATEMENT OF FINANCIAL POSITION Audited Audited 30 Sep 2023 30 Sep 2022 Rm Rm Total shareholders’ funds 732 930 Non-current liabilities 1 854 1 553 • NAV of 178 cents per share (HY22: 227 cents) Rehabilitation provision 1 553 1 174 • Higher rehabilitation provision due to change in estimate Deferred
Slide 20: EBITDA Trend and Analysis
EBITDA TREND AND ANALYSIS EBITDA (Rm) EBITDA/Sales ton (R) 416 HY 2023 315 HY 2022 274 HY 2021 181 HY 2020 155 145 HY 2019 HY 2018 HY 2018 HY 2019 HY 2020 HY 2021 HY 2022 HY 2023 -50 0 50 100 150 200 Moabsvelden Vanggatfontein Elandspruit Khanyisa 20
Slide 21: Capital Allocation (Rm)
CAPITAL ALLOCATION (Rm) 706 75 14 0 578 22 (9) 32 (260) Net debt Cash generated from Net interest Tax paid CAPEX Purch rehab Investment in JV Finance lease Net debt 31 March 2022 operations investment & other 30 September 2022 21
Slide 22: Lending Structure
LENDING STRUCTURE DEBT PROFILE OF CURRENT FACILITIES 900 800 Re-finance 700 The Group will look to Re-Finance part of the expiring facility in June 2023 600 500 400 300 200 100 0 Sept Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sept Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sept Oct Nov Dec Jan Fe
Slide 23: Looking Ahead
LOOKING AHEAD SIF Salungano GROUP
Slide 24: Looking Ahead
LOOKING AHEAD FOCUS POINTS CAPITALISE ON THE HIGH STABILISE OUR BUSINESS DIVERSIFICATION AND GROWTH COAL PRICE ENVIRONMENT • Return VGF to full production • Continue exporting coal • Strategic acquisitions • Return Elandspruit to optimal production • Take coal resources within our portfolio up • Agr