New Hope Corporation Limited · ASX:NHC
New Hope — H1 2013 Earnings Presentation
52 slides from New Hope's earnings presentation, Mar 19, 2013
Slide 1: Financial Results Presentation
Financial Results Presentation Half Year Ended 31 January 2013 Robert Neale Managing Director & CEO New Hope Corporation Limited
Slide 2: Disclaimer
Disclaimer IMPORTANT: The information in this document has been provided to you for information only by New Hope Corporation Limited (“NHC”) and is subject to change without notice. Nothing contained in this document constitutes investment, legal, tax or other advice. The information in this documen
Slide 3: Agenda
Agenda • Key Financials and Operations Summary • Port Operations • Mining Operations & Projects • Energy Activities • Community & Social Responsibility • Outlook 19 March 2013 3
Slide 4: Key Financials & Operations Summary
Key Financials & Operations Summary 19 March 2013 4
Slide 5: Highlights of Past Six Months
Highlights of Past Six Months • Net Profit Before Tax for the half year $93.2m, down 8.5% on the prior corresponding period (PCP). • Net Profit After Tax for the half year $68.8m, a solid performance given low A$ export coal pricing for the period. • Production 3.04 Mt down 5% on PCP. • Management f
Slide 6: Key Financials
Key Financials Six Months Ended 31 January 2013 2012 Change (A$m) (A$m) Revenue from ordinary activities 322.9 388.5 ‐16.9% Profit before income tax 93.2 101.8 ‐8.4% Net profit after tax 68.8 101.1 ‐31.9% Six Months Ended 31 January 2013 2012 (cents per share) (cents per share) Earnings Per Share Af
Slide 7: Production & Sales Performance
Production & Sales Performance Full Year Reforecast First Half Only 19 March 2013 7
Slide 8: First Half Production & Sales Tonnages
First Half Production & Sales Tonnages Six Months Ended 31 January (million tonnes) 2013 2012 Change Raw Coal Production 5.848 6.137 ‐4.7% Saleable Coal Production 3.040 3.206 ‐5.2% Coal Sold 2.740 3.164 ‐13.4% • First half 2012 was a record production half. • Planned two week shutdown over Christma
Slide 9: Production Volumes
Production Volumes Six Months Ended 31 January (million tonnes) 2013 2012 Change New Acland 2.404 2.581 ‐6.9% New Oakleigh 0.220 0.196 12.2% Jeebropilly 0.416 0.429 ‐3.0% TOTAL 3.040 3.206 ‐5.2% 19 March 2013 9
Slide 10: Sales Volumes
Sales Volumes Six Months Ended 31 January (million tonnes) 2013 2012 Change Export 2.654 2.909 ‐8.8% Domestic * 0.086 0.255 ‐66.3% TOTAL 2.740 3.164 ‐13.4% * Phase out of CSE (Swanbank) contract in 2012 19 March 2013 10
Slide 11: NPAT Half Year Comparison
NPAT Half Year Comparison 19 March 2013 11
Slide 12: Australian Dollar Strength & Coal Prices
Australian Dollar Strength & Coal Prices • Average revenue per tonne sold was down 8.1% over the first half 2013 in comparison with the first half of 2012. • Spot pricing has improved marginally from second quarter lows to be currently around US$92/tonne Newcastle benchmark. 19 March 2013 12 Source:
Slide 13: Port Operations
Port Operations 19 March 2013 13
Slide 14: QBH Port Facility
QBH Port Facility Half Year Ended Half Year Ended Year Ended 31 Jan 2013 31 Jan 2012 31 July 2012 (million tonnes) (million tonnes) (million tonnes) Coal Throughput 4.23 4.27 8.67 QBH has exported over 100 million tonnes in the past 30 years 19 March 2013 14
Slide 15: QBH Port Facility
QBH Port Facility Summary • Agreement reached on 4 year EBA with employees during January without industrial action. • Optimisation studies continuing. • System inloading and outloading availabilities in excess of 97% being achieved. • Installation of a new coal outload sampler completed. • Further
Slide 16: Mining Operations & Projects
Mining Operations & Projects 19 March 2013 17
Slide 17: Project Locations
Project Locations Location Map 19 March 2013 18
Slide 18: Mining Operations
Mining Operations Summary New Acland • Increased focus on improving safety performance. • Announcement in November 2012 of a compromise continuation plan giving New Acland an approval pathway. – Extension of the mine life to about the year 2030 • Mining fleet renewal program underway with delivery o
Slide 19: New Acland Coal Mine
New Acland Coal Mine Acland Continuation Project Project Progress • Original plan to expand New Acland from 4.8 to 10.0 MTPA (NAC03). • State significant project, EIS completed. • Supplementary EIS was due for submission to CoG in April 2012. • New LNP Government indicated an unwillingness to let th
Slide 20: About the New Acland Project
About the New Acland Project • Key Facts: Compromise Plan – Approx. Local jobs: 400 direct, 170 FTE contract and 2,850 indirect – Approx. $530 million per annum direct economic injection* – Circa $8 billion economic contribution for life of mine – Self sufficient for water * Goods & services, wages,
Slide 21: New Acland project site layout
CPP Upgrade + Materials handling MIA upgrade Power line Road relocation Diversion Train Load Out Rail Extension 22
Slide 22: Project Development
Project Development 1. Coal Developments • Colton — 0.5 Mtpa open cut coking coal mine near Maryborough – Environmental approvals and mining lease being sought – Exploration and design well advanced • Elimatta – 5 Mtpa open cut thermal coal mine near Taroom – EIS in the public domain for consultatio
Slide 23: Acland Pastoral Company
• Acland Pastoral Company – 9200 hectares • Current activities: – Cattle 2250 head – Cropping for cattle fodder‐500 hectares – Cropping for grain & mung beans‐1200 hectares – Rehabilitation: 215 hectares completed 113 hectares due for completion, 2013 • Growth activities: – Detailed land use plan un
Slide 24: Cost Containment Achieved
Cost Containment Achieved • Cost per BCM of overburden moved across all operations during the first half 2013 was down 6.3% in comparison with the first half of 2012. • Production cost per tonne sold was down 11.7% over the first half 2013 in comparison with the first half of 2012. • Transport costs
Slide 25: Reducing Costs via Improvements
Reducing Costs via Improvements • Redesign of dozing methods at QBH reduced dozer usage by 10-15% and downsizing from D11 to D10 sized dozers. • Haul Truck strut sensor trialled to improve operator safety, machine and tyre longevity and reduce costs. • Resource optimiser (Non-linear programming comp
Slide 26: New EX106 Bucket
New EX106 Bucket • Commenced operation 29th January • Cycle times decrease 3% Pay‐load increase 10% • Truck loading cycle decrease by 8% Average Total Loading Cycle: 138.8 Sec Old Bucket Average Bucket Cycle Time: 31.7 Sec Average Truck Payload: 191.6 Tonnes Average Total Loading Cycle: 127.7 Sec Ne
Slide 27: Energy Activities
Energy Activities • Energy Overview & NHC Objectives • Bridgeport Energy Limited (BEL) • CTL Projects 19 March 2013 28
Slide 28: Energy Overview
Energy Overview • Two most common forms of energy in Australia are electricity and transportation fuels. – Both becoming increasingly expensive • Generally, energy is the next highest cost centre for industrial and manufacturing businesses after wages. • Competitive mining operations are dependent o
Slide 29: Australian Imported Oil Dependence
Australian Imported Oil Dependence Singapore 40% from Middle East & Australia 57% from Singapore 19 March 2013 30 Source: NRMA
Slide 30: Breakdown of Australian Fuel Consumption
Breakdown of Australian Fuel Consumption By Source & Sector 19 March 2013 31 Source: NRMA
Slide 31: Australian Petrol and Diesel Fuel
Australian Petrol and Diesel Fuel Supplies & Stocks 19 March 2013 32 Source: NRMA and Australian Institute of Petroleum
Slide 32: Historical USA Gasoline Prices
Historical USA Gasoline Prices (Global Events Impact on Prices) 19 March 2013 33 Source: NRMA and United States Energy Information Administration
Slide 33: Import Supply Chain Vulnerabilities
Import Supply Chain Vulnerabilities 19 March 2013 34 Source: NRMA
Slide 34: World Transport Fuel
World Transport Fuel Supply ‐ Demand Massive Change in Supply Mix Diesel and Jet Fuel Growth 40 potential mb/d short Demand Supply Unconventional gas supply will change global supply side dynamics 19 March 2013 35 Source: NRMA, Exxon Mobil’s 2012 The Outlook for Energy: A View to 2040 and IEA World
Slide 35: NHC Future Energy Objective
NHC Future Energy Objective Prefer NHC site operations to be power and fuel independent with competitive lower cost reliable supply. • Power – Grid supply – Waste heat? (ex CTL) – Gas auxiliary supply (ex CTL) • Diesel – Contract fuel supply – CTL and GTL – BEL conventional petroleum • Readily avail
Slide 36: Future NHC Fuel Supply Options
Future NHC Fuel Supply Options Electricity Supply INPUTS Cooper Basin Carbon Contract Refining & Waste Refining/Imports (Bridgeport) Conversion (Major & Third Party) (CTL & GTL) NHC Operations & Projects Reliable Diesel Supply Diversification Matrix Regional Supply?? Surplus Domestic Agricultural Fu
Slide 37: Oil
Oil • Bridgeport Energy Limited (BEL) is 100% owned by New Hope Corporation – Small oil producer in Eromanga Basin, Queensland – Actively exploring in Utopia and Inland Fields – Produces 6000 barrels of crude oil per month – Expansion underway 19 March 2013 38
Slide 38: Bridgeport Energy
Bridgeport Energy Summary • New Hope Corporation completed the acquisition of Bridgeport Energy Limited on 23 August 2012. • During the half, completed a six ‐well drilling campaign on the Inland and Utopia fields. All wells indicated good oil columns. The wells were suspended for future completion
Slide 39: Bridgeport Energy
Bridgeport Energy Field Seismic Charts I-18 I-16 I-17 Utopia Murta M2 Top Reservoir Depth Map Inland Field Hutton Sandstone Depth Structure Map 19 March 2013 40
Slide 40: Coal to Liquids Project
Coal to Liquids Project Technology Status 1 Direct Liquefaction • Dry commissioning complete • Wet commissioning complete • Batch coal commissioning complete Direct Liquefaction Plant - USA • Full continuous coal commissioning underway • Original technology applications likely to have marginal comme
Slide 41: Coal to Liquids Project
Coal to Liquids Project Technology Status 2 Indirect Liquefaction (Proof of Concept Plant) • Production of power and diesel • 80% of plant components on site • Remaining 20% expected in June/July • 40% of plant assembled • Commissioning trials in August 19 March 2013 42 Indirect Liquefaction Plant -
Slide 42: Coal to Liquids Project
Coal to Liquids Project Indirect Liquefaction – Intermediate Stage Pre Liquefaction Storage Tanks Gasifier Input Lines De-sulphurisation Tanks 19 March 2013 43
Slide 43: Coal to Liquids Project
Coal to Liquids Project Next Steps Direct Liquefaction • Complete trials and assess data • Determine future plans Indirect Liquefaction • Complete plant construction • Undertake commissioning trials • Initiate next phase of engineering design subject to plant performance 19 March 2013 44
Slide 44: Direct Cost Technology Incentive
Direct Cost Technology Incentive Annual Operating Costs ($’s million) FY 2013 FY 2006 ‐ 2013 Diesel Fuel Costs (net of rebate) $ 46 $227 Site Electricity Costs $ 7 $ 29 Explosive Costs $ 16 $ 80 TOTAL $ 69 $336 $8.20 per tonne Technology Funding Costs ($’s million) FY 2013 FY 2006 ‐ 2013 Cost 2006 –
Slide 45: Community & Social Responsibility
Community & Social Responsibility 19 March 2013 46
Slide 46: Community & Social Responsibility
Community & Social Responsibility Significant ramp up of activities: Community Engagement • Oakey Community Information Office & Community Liaison Officer • New Acland Community Reference Group • Regular community information meetings • Project website, newsletters, fact sheets • Memberships: Toowoo
Slide 47: Local Business Support
Local Business Support • Active Local Purchasing Policy • In FY2012, 25% of total spend on goods and services(>$100m) was made to local suppliers Government Program Promotion • Women in Hard Hats • “Tuckshop shift” for local Oakey residents Infrastructure Support • Rebuilt and maintain Jondaryan/Mul
Slide 48: Community Engagement
A cuowartmes COMMUNIty Engagement
Slide 49: Outlook
YN New Hope Corporation Limited Outlook 19 March 2013 50
Slide 50: Outlook
Outlook 1 • The current operating environment is challenging for all Australian thermal coal producers. – Carbon Tax – MRRT Compliance costs – Historically High A$:US$ exchange rate – Constrained thermal coal pricing (A$ terms) • New Hope has been able to significantly restrain operating costs witho
Slide 51: Outlook
Outlook 2 • Japanese benchmark price negotiations and the AUD:USD exchange rate will significantly impact second half financial performance. – Security of thermal coal supply is critical to Japan • In the medium to longer term the recovery in global industrial production will drive energy demand. –
Slide 52: 6 February 2013
y_N New Hope Corporation Limited wk val ) Ta 6 February 2013 New Hope Group 53