Thungela Resources Limited · JSE:TGA
Thungela Resources — H1 2024 Earnings Presentation
26 slides from Thungela Resources's earnings presentation, 2024
Slide 1: Interim Results Presentation
[OFFICIAL] INTERIM RESULTS PRESENTATION for the six months ended 30 June 2024
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: H1 2024 Group Performance
[OFFICIAL] H1 2024 GROUP PERFORMANCE July Ndlovu | Chief Executive Officer 3
Slide 4: H1 2024 Group Highlights
[OFFICIAL] H1 2024 GROUP HIGHLIGHTS1 OPERATING A TOTAL RECORDABLE CASE EXPORT SALEABLE PRODUCTION FATALITY-FREE BUSINESS FREQUENCY RATE 18 months 1.75 7.8Mt (June 2023: 2.532) (June 2023: 6.1Mt ) Without a loss of life Lowest recorded in South Africa Robust operational performance at 0.99 at Ensham
Slide 5: Safety
[OFFICIAL] SAFETY GROUP TRCFR1 18 MONTHS FATALITY-FREE • South Africa achieved its lowest total recordable 2.80 case frequency rate at 0.99, down from 1.40 in FY 2023 • Australia made significant progress with TRCFR at 11.64 in H1 2024, down from 22.01 in 1.75 H1 2023 1.35 1.41 1.40 • Safety improve
Slide 6: Life Extension Projects in South Africa
[OFFICIAL] LIFE EXTENSION PROJECTS IN SOUTH AFRICA ELDERS ON TRACK AND ON BUDGET KEY FIGURES • Elders Capital expenditure ~R2.0 billion – Revised to R1.9 billion – Spent R1.4 billion to date Life of mine 12 years steady-state (2 seam) – Approximately R350 million to be spent in Production profile Up
Slide 7: Rail Performance in South Africa
[OFFICIAL] RAIL PERFORMANCE IN SOUTH AFRICA TFR1 ANNUAL VOLUMES AND ANNUALISED AVERAGE RUN RATE (Mt per annum) CONTINUED RAIL UNDERPERFORMANCE • Industry railed volume 47.3Mtpa in H1 2024 - 71.1 70.1 with some weeks achieving rates above 50Mtpa • Mutual cooperation agreement enables 58.1 -5% collabo
Slide 8: Drivers of Coal Demand and Pricing
[OFFICIAL] DRIVERS OF COAL DEMAND AND PRICING 1 Energy security a key priority for governments, and sustainable and economical viable energy 2 Geopolitics impact on energy complex with increased volatility 3 ESG commitments of countries and companies 4 Restocking of coal supply ahead of the winter s
Slide 9: Long-term Fundamentals of Coal Supporting Our Strategy
[OFFICIAL] LONG-TERM FUNDAMENTALS OF COAL SUPPORTING OUR STRATEGY THUNGELA MARKETING INTERNATIONAL FUNDAMENTALS OF DEMAND • Record high demand in 2023 at 8.7 billion tonnes1 • Marketing of high-quality South African and Australian coal • Seaborne demand in excess of 1 billion tonnes • Well positione
Slide 10: Financial Review
[OFFICIAL] FINANCIAL REVIEW Deon Smith | Chief Financial Officer 10
Slide 11: H1 2024 Financial Results
[OFFICIAL] H1 2024 FINANCIAL RESULTS1 ADJUSTED EBITDA NET PROFIT ADJUSTED OPERATING FREE CASH FLOW R2.1 billion R1.2 billion R936 million (June 2023: R4.4 billion) (June 2023: R3.0 billion) (June 2023: R4.3 billion) NET CASH EARNINGS PER SHARE TOTAL SHAREHOLDER RETURNS R6.7 billion R9.52 per share R
Slide 12: H1 2024 Operational Results
[OFFICIAL] H1 2024 OPERATIONAL RESULTS1 EXPORT SALEABLE EXPORT EQUITY SALES FOB COST PER EXPORT TONNE (including royalties) PRODUCTION 7.8Mt 8.1Mt SA | ENSHAM (June 2023: 6.1Mt) (June 2023: 6.3Mt) R1,197/t | R1,645/t SA 6.2Mt | Ensham 1.6Mt2 SA 6.0Mt | Ensham 2.1Mt (June 2023: R1,166/t) SUSTAINING C
Slide 13: Weaker Coal Prices Across Our Markets
[OFFICIAL] WEAKER COAL PRICES ACROSS OUR MARKETS SOUTH AFRICA • Weaker prices driven by milder winter in BENCHMARK AND REALISED THERMAL COAL PRICES (USD per tonne) northern hemisphere resulting in high coal and gas stock 450 • Discounts achieved of 15% in H1 2024 400 (H1 2023: 18%) compared to 14% f
Slide 14: South Africa - Export Saleable Production and Export Sales
[OFFICIAL] SOUTH AFRICA - EXPORT SALEABLE PRODUCTION AND EXPORT SALES EXPORT SALES IMPACTED BY RAIL (Mt) UNDERPERFORMANCE • 5.8Mt coal railed in H1 2024 (H1 2023: 6.2Mt) – TFR annualised run rate 47.3Mt in H1 2024 2.1 – Two significant derailments in H1 2024 6.2 6.0 • Export sales of 6.0Mt in H1 202
Slide 15: Australia - Export Saleable Production and Export Sales
[OFFICIAL] AUSTRALIA - EXPORT SALEABLE PRODUCTION AND EXPORT SALES STRONG PRODUCTION AND SALES PERFORMANCE (Mt) • H1 2024 annualised run rate of 3.8Mt, 0.3 40% improvement compared to 2.7Mt at 1 September 2023 2.1 • Upward revision of 2024 production guidance • Commodity purchases reflecting JV part
Slide 16: Operating Costs
[OFFICIAL] OPERATING COSTS1 SOUTH AFRICA IMPACTED BY INFLATION AND (R billion) INVENTORY MOVEMENT 0.2 0.1 15.8 • Weaker ZAR:USD at R18.74 (H1 2023: R18.22) 0.6 0.6 0.6 0.3 0.1 0.1 • Lower production costs in H1 2024 due to 2.1 production curtailed during 2023 4.2 • Inventory production movement nega
Slide 17: South Africa - FOB Cost per Export Tonne
[OFFICIAL] SOUTH AFRICA - FOB COST PER EXPORT TONNE UNIT COSTS INCREASE BELOW INFLATION (R per tonne) • Inflation on cash costs of 6.4% 26 • Domestic revenue offset impacted by lower coal 30 64 1,197 1,166 19 1,189 prices 1,139 94 17 8 27 2.1 • Lower production costs due to curtailments in 2023 and
Slide 18: Operating Costs - Ensham
[OFFICIAL] OPERATING COSTS - ENSHAM (R million) ENSHAM TOTAL OPERATING COSTS • Employee costs represent 29% of total on-mine 4,194 104 cash costs 480 • Royalties based on Queensland progressive 465 royalty calculation 691 – H1 2024 royalty costs AUD22/t - calculated on the higher Japanese Reference
Slide 19: Adjusted EBITDA
[OFFICIAL] ADJUSTED EBITDA DECREASE DRIVEN BY LOWER PRICES (R billion) • EBITDA margin of 13% (H1 2023: 31%) – South Africa 9.6% – Ensham 21% • Average realised price in South Africa decreased 1.0 by 17% compared to H1 2023 4.4 2.2 • Sales aligned to rail performance 0.1 0.6 0.9 2.1 0.4 0.1 0.6 0.6
Slide 20: Net Working Capital
[OFFICIAL] NET WORKING CAPITAL WORKING CAPITAL RELEASE IN H1 2024 (R billion) • South African and Ensham stockpiles drawn down mainly due to roll over from December 2023 shipment slippages 6.6 • Higher receivables mainly due to higher Ensham 1.8 0.4 sales in June 2024 compared to December 2023 3.6 0
Slide 21: Summarised Cash Flow
[OFFICIAL] SUMMARISED CASH FLOW SOURCE AND USES OF CASH IN H1 2024 (R billion) • Cash returned to shareholders of R1.8 billion 10.2 0.8 • Net cash generated from operating activities of 1.4 4.2 1.7 R1.7 billion, which includes R815 million 0.7 0.4 expected to be refunded to customers upon 0.8 Japane
Slide 22: Prioritising Returns to Shareholders
[OFFICIAL] PRIORITISING RETURNS TO SHAREHOLDERS DISCIPLINED CAPITAL ALLOCATION CAPITAL ALLOCATION1 (R billion) • R1.7 billion cash reserved for life extension 3.2 7.6 projects 6.7 4.2 • Expect to make a further contribution of R120 million toward cash collateralisation of the 1.7 environmental liabi
Slide 23: 2024 Operational Guidance – Upgrade for Ensham
[OFFICIAL] 2024 OPERATIONAL GUIDANCE – UPGRADE FOR ENSHAM SOUTH AFRICA ENSHAM 2024 – 2024 – Metric Unchanged Metric previous revised Export saleable production Mt 11.5 - 12.5 Export saleable production (on a 100% basis) Mt 3.2 - 3.5 3.5 - 3.8 FOB cost per export tonne1 R/tonne 1,180 – 1,300 FOB cost
Slide 24: Conclusion
[OFFICIAL] CONCLUSION July Ndlovu | Chief Executive Officer 24
Slide 25: Delivering on Our Purpose – Responsibly Creating Value
[OFFICIAL] DELIVERING ON OUR PURPOSE – RESPONSIBLY CREATING VALUE TOGETHER FOR A SHARED FUTURE Unwavering commitment to Safety Controlling the controllables Be a fatality-free business Drive productivity improvement and cost competitiveness Building a sustainable long-life Capital allocation is a co
Slide 26: Q&A
[OFFICIAL] Q&A 26