Slide 1: Delivering Growth: Full Year FY 2011 Results
Whitehaven Coal Limited Delivering Growth Full Year FY 2011 Results Sydney, Australia 23 August 2011
Slide 2: Disclaimer
Disclaimer Statements contained in this material, particularly those regarding the possible or assumed future performance, costs, dividends, returns, production levels or rates, prices, reserves, potential growth of Whitehaven Coal Limited, industry growth or other trend projections and any estimate
Slide 3: Qualifications and Statement
Qualifications and Statement Information in this report that relates to Coal Resources and Reserves is based on and accurately reflects reports prepared by the Competent Person named beside the respective information. All these persons are consultants for Whitehaven Coal Limited. Mr Colin Coxhead is
Slide 4: Contents
Contents ► Highlights ► Operating and financial results ► Status of growth plans ► Whitehaven's outlook 3 Full Year Results - August 2011
Slide 5: Highlights - FY 2011
Highlights - FY 2011 ► Net profit after tax (NPAT) of $9.9 million1 ► Underlying NPAT (excluding significant items) of $73.3 million, up 33% ► Final fully franked dividend of 4.1 cents per share2 ► Average cash cost of sales slightly lower at $60.49 per tonne FOB ► EBITDA of $148.0 million, includin
Slide 6: Operating highlights - FY 2011
Operating highlights - FY 2011 ► Coal sales grew strongly, but with more purchased coal to meet legacy contracts ► up 45% to 6.647 million tonnes (Mt) (100% basis) ► up 48% to 6.126 Mt (equity share) ► Saleable coal production increased substantially, mainly in the second half ► up 19% to 4.687 Mt (
Slide 7: Business development highlights - FY 2011
Business development highlights - FY 2011 ► Coal Resources (JORC) increased by 8.5% to 1,771.5 Mt ► Marketable Coal Reserves (JORC) increased by 34% to 426.1 Mt ► Vickery Project progressed with opencut Coal Resources (JORC) now at 439.2 Mt and interim opencut Marketable Reserves (JORC) of 113.57 Mt
Slide 8: Contents
Contents ► Highlights ► Operating and financial results ► Status of growth plans ► Whitehaven's outlook 7 Full Year Results - August 2011
Slide 9: Growth of coal production and sales continues
Growth of coal production and sales continues Saleable coal production has trebled in 5 years Saleable Production - Equity Basis Total Coal Sales - Equity Basis 4,500 7,000 4,000 6,000 3,500 5,000 3,000 000 tonnes 000 tonnes 2,500 4,000 2,000 3,000 1,500 2,000 1,000 1,000 500 0 - 8 Full Year Results
Slide 10: Higher prices + lower costs = better EBITDA margins
Higher prices + lower costs = better EBITDA margins A$/t FOB FY 2010 FY 2011 Coal Sales - 000t (equity basis, excl. purchased coal) 3,310 4,243 Average revenue - (excl. purchased coal & net of NSW royalties) 99.14 103.00 Average cash cost of sales 61.78 60.49 EBITDA 37.36 42.51 EBITDA Margin - % 38%
Slide 11: Full year profitability – FY 2011
Full year profitability – FY 2011 Reported Financial Performance - A$ millions FY 2010 FY 2011 Revenue 406.8 622.2 NPAT before Significant Items 55.1 73.3 NPAT 114.9 9.9 Earnings per share (cents per share - diluted) 24.0 2.0 Final dividend (cents per share - fully franked) 2.8 4.1 Underlying Financ
Slide 12: Cash flow – FY 2011
Cash flow – FY 2011 A$ millions FY 2010 FY 2011 Cash generated from operations 69.3 120.3 Interest and tax payments (108.8) (40.9) Net cash provided by/(used) in operating activities (39.5) 79.4 Proceeds from sale of assets 100.8 191.8 Capital investment (245.7) (225.3) Other investing activities (1
Slide 13: 30 June financial position
30 June financial position A$ millions June 30 – 2010 June 30 – 2011 Cash 141.0 207.6 Current receivables 289.2 92.4 Other current assets 72.0 162.3 Current assets 502.2 462.3 Non-current receivables 37.2 2.7 Other non-current assets 811.9 997.4 Total assets 1,351.3 1,462.4 Current payables 128.4 15
Slide 14: Full year capex – FY 2011
Full year capex – FY 2011 Capital Investment - $ million FY 2010 FY 2011 Tarrawonga 1 2.4 2.3 Werris Creek 45.3 8.3 Rocglen 2.0 2.4 Sunnyside 2.2 1.9 Gunnedah CHPP 12.9 16.4 Total Open-cuts 1 64.8 31.3 Narrabri 1, 2 126.6 104.4 New coal train 35.5 3.7 Exploration 1.5 4.1 Vickery 31.9 - Land/other 7.
Slide 15: Fixed price coal contracts and fixed FX status
Fixed price coal contracts and fixed FX status ► “Legacy” thermal coal contracts of 1.77 Mt remain over next year, average price US$68.98/t. Otherwise, US$ coal prices are currently only fixed for the short term ► Whitehaven has a total FX fixed position of US$319.9m at an average exchange rate of 0
Slide 16: Contents
Contents ► Highlights ► Operating and financial results ► Status of growth plans ► Whitehaven's outlook 15 Full Year Results - August 2011
Slide 17: Ongoing growth in Resources & Marketable Reserves
Ongoing growth in Resources & Marketable Reserves Reserve life increased while production also increased Whitehaven Coal - JORC Resources Whitehaven Coal - JORC Marketable Reserves 2,000 500 1,800 450 1,600 400 1,400 350 1,200 300 Million Tonnes Million Tonnes 1,000 250 800 200 600 150 400 100 200 5
Slide 18: Substantial growth from Narrabri underground mine
Substantial growth from Narrabri underground mine ► Coal resources of 854 Mt in a single seam of 8-9 metres thick ► Current marketable reserves of 199.9 Mt based on extracting the bottom 4.2 metre section of the seam only ► Low ash, high energy, low sulphur PCI and thermal coals for the export marke
Slide 19: Narrabri now developing for longwall
Narrabri now developing for longwall ► First CM production 28 June 2010 ► Four continuous miners now developing for LW ► More than 280 Kt of saleable coal produced to date ► Longwall installation due in February 2012 ► Gas drainage successful in reducing CO2 levels below required levels 18 Full Year
Slide 20: Gas Drainage Strategy
Gas Drainage Strategy SIS on Drainage SIS Drilled Planned SIS 19 Full Year Results - August 2011
Slide 21: Narrabri UG development conditions are very good
Narrabri UG development conditions are very good 20 Full Year Results - August 2011
Slide 22: Longwall is 94% complete, surface build started
Longwall is 94% complete, surface build started 21 Full Year Results - August 2011
Slide 23: CHPP now being commissioned
CHPP now being commissioned 22 Full Year Results - August 2011
Slide 24: Shaft complete and fans being commissioned
Shaft complete and fans being commissioned ► Stage 2 capital estimate of ~$300 million (100% basis) remains on track 23 Full Year Results - August 2011
Slide 25: Longwall panel #1 development rate is critical path
Longwall panel #1 development rate is critical path 24 Full Year Results - August 2011
Slide 26: Extension of the Tarrawonga JV has significant strategic benefits
Extension of the Tarrawonga JV has significant strategic benefits for both parties ► Utilises coal reserves within the Boggabri Coal area which would not otherwise be mined ► Extends the existing 70:30 Tarrawonga JV reserves to allow up to 3 Mtpa for 20 years with same coal quality (80% PCI) and OB
Slide 27: Vickery a major strategic growth acquisition
Vickery a major strategic growth acquisition ► The Vickery project area comprises Vickery, Merton, Bluevale and Canyon Extended ► 439 Mt of open cut Coal Resource, with an interim Marketable Reserve of 113.5 Mt ► Coal seams at Vickery contain a range of semi-soft coking and high quality thermal coal
Slide 28: Large OC reserve at Vickery with extensions to come
Large OC reserve at Vickery with extensions to come ► 439 Mt opencut Coal Resource in the Vickery area ► Main Pit (green outline) now MERTON has 164 Mt of ROM coal at 10:1 stripping ratio, of which 129 POTENTIAL Mt is currently JORC EXTENSION Recoverable Reserve AREA ► Further drilling underway to b
Slide 29: Rail track capacity to meet Whitehaven's growth
Rail track capacity to meet Whitehaven’s growth ► Whitehaven has now entered into a long term track access agreement with ARTC which provides capacity to meet Whitehaven's planned growth ► Further track upgrades have been identified by ARTC to increase rail capacity to ~60 Mtpa from the Gunnedah Bas
Slide 30: New trains being acquired as needed for growth
New trains being acquired as needed for growth ► Whitehaven has a long term haulage agreement with PN which includes the provision of new trains to meet Whitehaven’s growth plans. ► Two new trains have been commissioned, with the third due in October 2011 29 Full Year Results - August 2011
Slide 31: Newcastle port capacity is growing rapidly
Newcastle port capacity is growing rapidly 100 100 PWCS NCIG 315+ 40 40 T4 70 32 32 32 30 30 30 30 145 113 113 113 113 Newcastle Port Capacity by PWCS expansion by 2012 NCIG expansion during 2013 PWCS Terminal 4 Future Expected Newcastle end of CY2010 Port Capacity 30 Full Year Results - August 2011
Slide 32: Port capacity to meet Whitehaven growth
Port capacity to meet Whitehaven growth Whitehaven port capacity build-up 18,000 16,000 14,000 T4 12,000 Thousand tonnes Idemitsu TJV 10,000 NCIG Stage 2F 8,000 NCIG Stage 2AA 6,000 NCIG Stage 1 4,000 PWCS 2,000 0 31 Full Year Results - August 2011
Slide 33: NCIG Stage 1 now fully operational, first Cape size ship due in September
NCIG Stage 1 now fully operational, first Cape size ship due in September 32 Full Year Results - August 2011
Slide 34: Contents
Contents ► Highlights ► Operating and financial results ► Status of growth plans ► Whitehaven's outlook 33 Full Year Results - August 2011
Slide 35: Whitehaven is the leading coal producer and developer in the Gunnedah Basin
Whitehaven is the leading coal producer and developer in the Gunnedah Basin 1 Large resources and reserves of high quality coal 2 High productivity mines & high yield coals provide cost and margin benefits Increasing percentage of metallurgical coal production and close to 100% export 3 sales. Subst
Slide 36: Large resources and reserves of high quality coal
1 Large resources and reserves of high quality coal ► Thermal and metallurgical Coal Resources of 1,772 Mt (100% basis) and Marketable Reserves of 426 Mt (100% basis) ► Revised JORC statement released on 23 August 2011 ► Potential for continued increase in Marketable Reserves from Vickery, Narrabri
Slide 37: High yield coals provide cost and margin benefits
2 High yield coals provide cost and margin benefits ► Average saleable coal yield of +90%, compared to an average of around 73% for Hunter Valley coals ► Currently 25% metallurgical coal, expected to increase to between 40% and 50% in future ► Average cash cost of ~A$60/t FOB Newcastle (excluding NS
Slide 38: Increasing percentage of metallurgical coal production capacity
4 Increasing percentage of metallurgical coal production capacity - close to 100% export sales ► Metallurgical coal is expected to grow to between 40% and 50 % of total saleable production capacity as Narrabri and Vickery are fully developed ► Expected long term average of 80% and 13% of metallurgic
Slide 39: Mix of off-take contracts and uncommitted tonnages
4 Mix of off-take contracts and uncommitted tonnages to manage market and production risks ► Whitehaven has off-take commitments with Narrabri JV partners, but there remains significant uncommitted tonnage in the future ► The Vickery project offers a good mix of metallurgical coal opportunities and
Slide 40: Low-risk open cut production base with substantial growth
5 Low-risk open cut production base with substantial growth from Narrabri UG and Vickery OC ► Four OC mines with ~5.5 Mtpa1 SALEABLE PRODUCTION CAPACITY VS PORT capacity. OC growth from CAPACITY (100% BASIS) 1. 18,000 Vickery ► Saleable production capacity 16,000 expected to be ~10.5 Mtpa1 by Sunnys
Slide 41: Growth plans are well funded
6 Growth plans are well funded Capacity to fund new opportunities ► Cash on hand at end June of ~$207.6 million, with minimal finance debt other than equipment leasing and funding for the Narrabri longwall ► Major committed capital is the completion of Narrabri Stage 2, which is well covered by cash
Slide 42: Coal market outlook
Coal market outlook ► Coal demand growth remains strong ► Supply still constrained by infrastructure and ever-increasing “red tape” and “green tape” ► Contract coal prices – US$ FOB ► Hard coking coal Q1 ~$315/t ► Newcastle semi-soft/PCI Q1 ~$210/t ► Newcastle thermal ~$127/t ► Current spot coal pri