New Hope Corporation Limited · ASX:NHC
New Hope — H1 FY2023 Earnings Presentation
31 slides from New Hope's earnings presentation, Mar 21, 2023
Slide 1: Interim Financial Results Half Year Ended 31 January 2023
New Hope Corporation Limited Interim Financial Results Half Year Ended 31 January 2023 Presented by Robert Bishop, Rebecca Rinaldi and Dominic O’Brien 21 March 2023
Slide 2: Important Information About This Document
IMPORTANT INFORMATION ABOUT THIS DOCUMENT The presentation in this document is in summary form only. It should be read together with New Hope Corporation Limited’s (“NHC’s”) other announcements lodged with the Australian Securities Exchange, which are available at www.asx.com.au While NHC has prepar
Slide 3: Highlights
HIGHLIGHTS Robert Bishop Chief Executive Officer
Slide 4: Half year highlights
SHARE PRICE3 INTERIM DIVIDEND NPAT $5.86 30.0c $669M SPECIAL DIVIDEND 158% 10.0c 103% Underlying EBITDA1 TOTAL TONNES SOLD SAFETY – TRIFR2 (before non-regular items) $1,039M 3.4Mt 2.44 87% 34% 49% 1 Underlying Earnings before Interest, Tax and Deprecation and Amortisation (EBITDA) and Profit before
Slide 5: Operational Performance
OPERATIONAL PERFORMANCE
Slide 6: Strong Demand for High Quality, Low Emission Thermal Coal
Strong Demand for High Quality, Low Emission Thermal Coal While gC Newc index has declined over recent months, current prices still represent a significant margin for low-cost, high-quality operations like Bengalla and New Acland Thermal coal price (USD$/t) Seaborne Thermal Coal Export Energy by Cou
Slide 7: NSW Coal Operations – Bengalla
NSW Coal Operations – Bengalla1 PRODUCTION IMPACTED BY Strong safety and operational performance despite WEATHER AND COVID adverse weather impacting production (~1Mt) 11.0 10.0 Saleable coal produced (Mtpa) 9.0 Disciplined cost control leading to maximised 8.0 margins 7.0 6.0 5.0 Additional dozer an
Slide 8: Bengalla Growth Project
Bengalla Growth Project1 110.0 Production ramp up to 13.4Mtpa ROM by September 100.0 2024 (Permitted to 15.0Mtpa) 27 90.0 Growth Project spend (A$m) 80.0 Project will increase saleable production and 70.0 increase overall product quality 60.0 50.0 83 18 Total project investment of $200m funded throu
Slide 9: NSW Coal Operations – Malabar Resources Limited
NSW Coal Operations – Malabar Resources Limited Maxwell Underground Mine 15% equity investment held in Malabar Resources. Flagship asset is the Maxwell Mine Construction activities commenced during the period and first coal has since been mined from the Whynot seam Targeting up to 6.5Mtpa1 predomina
Slide 10: Queensland Coal Operations - New Acland Stage 3
Queensland Coal Operations - New Acland Stage 3 Mining Leases were issued on 26 August 2022 and 6.0 400 the Associated Water Licence was granted on 5.5 20 October 2022 350 5.0 Saleable coal produced (Mtpa) 4.5 300 First mining will begin late financial year 2023 and 4.0 first coal shipment expected
Slide 11: New Acland Stage 3
New Acland Stage 3 Production will increase to cover three pits over the permitted mining area reducing single pit risk LOM strip ratio x 4.2 and FOB cash cost A$90.9/t Total project capital $384m spread over the next two financial years funded by operating cash flow Key infrastructure $96m Rail Spu
Slide 12: Financial Results
FINANCIAL RESULTS Rebecca Rinaldi Chief Financial Officer
Slide 13: Financial Highlights
FINANCIAL HIGHLIGHTS REALISED PRICE TOTAL REVENUE CASH GENERATED Newcastle Thermal Prices $US/t ($AUD) FROM OPS $467.4/t $1,582M $983M 500 450 400 143% 54% 117% 350 300 250 200 GOVERNMENT NPAT NET ASSETS 150 CONTRIBUTIONS 100 $580M $669M $2,496M 50 - 279% 103% 8% gc NewC (US$/t) API-5 (US$/t) 13 The
Slide 14: Underlying EBITDA
Underlying EBITDA1 • Record Underlying EBITDA¹ achieved despite significant rain events • Record realised pricing received contributing to 87% increase in Underlying EBITDA1 450 400 350 300 +87% 250 200 1,023 150 1,577 100 367 1,039 50 554 0 2021 31-Jan-22 31-Jul-22 2022 31-Jan-23 Qtly Avg gc NewC (
Slide 15: Site Cash Costs Increase due to Inflationary Pressures and Weather
Site Cash Costs (A$/Production t) Increase due to Inflationary Pressures and Weather Impacts on Volumes +143% 467.4 192.4 INFLATIONARY IMPACTS +16% +6% 5.9 65.4 1.8 1.2 1.6 1.0 0.2 0.7 56.5 53.0 41.6 Average 31 January 31 July Fuel & Explosives Spares & Labour 31 January Contractors Labour Volume 31
Slide 16: Underlying EBITDA Margin… Low-Cost Operations at Bengalla
Underlying EBITDA1 MARGIN… Low-Cost Operations Maintaining Strong Margins at Bengalla • Trade coal used to ensure customer commitments are met to provide energy security to these customers • Site cash cost per sales tonne increase due to weather related disruptions impacting volume mined 467.4 65.1
Slide 17: Cash Generation Remains Strong with Focus on Capital Management
Cash Generation Remains Strong with a Focus on Capital Management Initiatives to Strengthen Balance Sheet… +36% 1,413 CAPITAL MANAGEMENT 429 67 10 31 129 971 716 490 513 Closing Cash Closing Cash Operational Income Investing Other Share buy-back Convertible Dividends Closing Cash 31 January 31 July
Slide 18: Capital Management…Aligned to Long-term Strategy
Capital Management…Aligned to Long-term Strategy The Company has taken significant steps to strengthen its balance sheet, focus on capital opportunities and provide significant fully franked dividends to shareholders. • 30 cps – Ordinary Interim Fully Franked Dividend Fully Franked Dividends • 10 cp
Slide 19: Consistent Outperformance Since IPO in 2003
Consistent Outperformance Since IPO in 2003 • Disciplined capital management leading to TSR of 22.6%1 compared to the ASX All Ordinaries2 of 9.0% per annum • Total return on investment since IPO of 5106.9% compared to the ASX All Ordinaries of 432.6% Cumulative performance to 31 January 2023 (includ
Slide 20: Financial Performance, on Track for Record Earnings…
Financial Performance, on Track for Record Earnings… Underlying EBITDA1 $m 1,577 +87% 1,039 (A$ million) 517 554 290 367 31-Jan-23 31-Jan-22 % change EBITDA before non regular items 1038.5 554.4 87% 2019 2020 2021 2022 31-Jan-22 31-Jan-23 NPAT $m Depreciation and Amortisation (68.3) (67.3) 2% +102%
Slide 21: Responsible Operator
RESPONSIBLE OPERATOR Dominic O’Brien Executive General Manager and Company Secretary
Slide 22: Safety and Wellbeing
Safety and Wellbeing All Injury Frequency Rate (AIFR) 40.0 -10.6% Adopting the characteristics of a high 30.0 33.32 reliability organisation 20.0 29.72 29.78 10.0 Stop for Safety Program Learning from both our incidents and 0.0 Jan-22 Mar-22 May-22 Jul-22 Sep-22 Nov-22 Jan-23 that of our industry AI
Slide 23: Our People, Securing an Engaged and Diverse Workforce
Our People, Securing an Engaged and Diverse Workforce Workforce Growth Bengalla Employee vs Contractors Workforce Potential 745 ~450 Locally Employed 15.7% Acland Bengalla 84.3% 93% 89% 31 July 2021 31 January 2022 31 July 2022 31 January 2023 Future State Contractors Employees YTD Promotions Averag
Slide 24: Environmental, Social and Governance
Environmental, Social and Governance MSCI ESG Rating distribution MSCI ESG is the world’s largest provider of ESG Universe: MSCI ACWI Index constituents, Metals and Mining – Non Precious Metals, n=71 indexes which use a rules-based methodology to 22% 19% identify industry leasers and their exposure
Slide 25: Decarbonisation and Transformation Opportunity…
Decarbonisation and Transformation Opportunity… 1200 “Coal and gas are going to be part of Thermal Seaborne Coal Exports by Region (Mt): 2022 - 2050, our future for years to come” 1000 1.5 degrees celsius scenario Environment Minister - Tanya Plibersek 9 March 2023 800 We believe Australian thermal
Slide 26: Outlook and Strategy
OUTLOOK AND STRATEGY Robert Bishop Chief Executive Officer
Slide 27: Increased Demand and Supply Disruptions have Impacted Price
Increased Demand and Supply Disruptions have Impacted Price, while Under Investment in Thermal Coal will Support Prices Moving Forward… 500.0 EU sanctions 450.0 Russia 400.0 Russia invades Ukraine 350.0 Sustained period of environmental debate that questions the role of coal in 300.0 the energy mix
Slide 28: Demand Outstripping Supply, with Future Growth from South-East Asia
Demand Outstripping Supply, with Future Growth Expected from South-East Asia Bubble size indicates electricity demand Global Demand vs Supply (by operating status) 12,000 Taiwan 1,200 10,000 Korea 1,000 Energy consumption per capita 800 8,000 Million tonnes 600 Japan 6,000 China 400 Malaysia 4,000 V
Slide 29: Positioned for Long-Term Organic Growth…
Positioned for Long-Term Organic Growth… All major coal suppliers face considerable 16.0 constraints, placing increased value on already 15.0 permitted, low cost operations 14.0 13.0 12.0 Despite massive investment in renewables, coal generation as a share of the world energy mix Saleable coal produ
Slide 30: Global Cost Curve 2030
Global Cost Curve 2030 • Portfolio of assets are in the lowest cost quartile providing business resilience to demand decline from decarbonisation, to achieve maximum 1.5℃ increase by 2050 2030 Global Seaborne Thermal Coal Cost Curve (Quality Adjusted) 250 2022 TCC quality adjusted (to GAR benchmark)
Slide 31: Thank you
Thank you Contact us Level 16/175 Eagle St Brisbane City QLD 4000 (07) 3418 0500 newhopegroup.com.au ASX code: NHC