Deterra Royalties Ltd · ASX:DRR
Deterra Royalties — H1 FY21 Earnings Presentation
23 slides from Deterra Royalties's earnings presentation, Feb 24, 2021
Slide 1: Australian Securities Exchange Notice
3 Australian Securities Exchange Notice 24 February 2021 ASX: DRR INTERIM PERIOD FINANCIAL RESULTS AND OUTLOOK Deterra Royalties Limited (ASX: DRR) (Deterra or Company) is pleased to release a results and outlook presentation for the interim period to 31 December 2020. An investor and analyst briefi
Slide 2: FY21 Interim Period Financial Results and Outlook
FY21 Interim Period Financial Results and Outlook 24 February 2021 Julian Andrews Managing Director and Chief Executive Officer Brendan Ryan Chief Financial Officer
Slide 3: Important notices and disclaimer
Important notices and disclaimer This presentation has been prepared by Deterra Royalties Limited (“Deterra”, “DRL”, “the Company”). By accessing this presentation you acknowledge that you have read and understood the following statement. The material in this presentation is general background infor
Slide 4: FY21 Interim Period Business Highlights
FY21 Interim Period Business Highlights • Board and management team now fully in place Successful demerger & • Implemented lean corporate structure with outsourced functional support ASX listing • Modest working capital facility in place • Revenue of $53.9 million with an NPAT of $33.3 million (incl
Slide 5: Demerger of Deterra Royalties
Demerger of Deterra Royalties Deterra Royalties Limited (DRL) was successfully demerged from Iluka Resources on 2 November 2020 Royalty revenue begins to DRL Pays Dividend to Iluka (30 Oct) DRL Incorporated (15 Jun) accrue to DRR3 DRL Acquires DRML1 from Iluka (30 Jun) DRL demerged from Iluka and li
Slide 6: FY21 interim period financial highlights
FY21 interim period financial highlights Statutory accounts1 Attributable to2: Total Revenue Revenue Revenue $53.9M $29.3M $24.6M Underlying EBITDA3 Underlying EBITDA Underlying EBITDA $47.8M $24.4M $23.4M NPAT NPAT NPAT $33.3M $20.4M $12.9M (1) Refers to interim period results for period 15 June to
Slide 7: Mining Area C performance
Mining Area C performance December 2020 sales volume up Q-on-Q despite BHP South Flank project is now 90% complete and remains on South Flank tie-in activity track for first production in the middle of 2021 calendar year MAC quarterly sales volume South Flank project completion (Mdmt) (%) 15.6 13.5
Slide 8: Financial results
Financial results
Slide 9: Mining Area C royalty performance
Mining Area C royalty performance The MAC Royalty performed strongly in a backdrop of a robust iron ore price environment Interim Period Revenue breakdown MAC quarterly revenue royalty payment and implied sales price $M AUD million, A$/tonne (FOB, Australia) Dec 2020 MAC Revenue royalty Sep 2020 MAC
Slide 10: Financial performance
Financial performance attributable to Iluka and Deterra Royalties Earnings 15th June 2020 to 31st December 2020 attributable to Iluka and Deterra Royalties 100% of NPAT ($M) Income tax expense on acquired receivable 1.4 4.6 2.45¢/sh 6.1 6.5 6.5 5.6 24.6 20.9 12.9 12.9 14.4 Revenue Costs One off cost
Slide 11: Shareholder returns
Shareholder returns Low debt and scaleable corporate structure designed to support the flow of dividends to shareholders • Intent to pay out 100% of NPAT1, franked to the maximum extent possible • Conservative capital structure limits interest costs • Lean and scaleable corporate structure and cost
Slide 12: Strategy and outlook
Strategy and outlook
Slide 13: Mining Area C operation and South Flank expansion (MAC royalty)
Mining Area C operation and South Flank expansion (MAC royalty) Low-risk exposure to a large, low-cost iron ore mining complex that will grow its volumes by approximately 2.4 times Low-cost operations with long life Significant near-term growth Resource upside in a low-risk jurisdiction Iron ore tot
Slide 14: Growth strategy focused on value accretive investment
Growth strategy focused on value accretive investment Deterra will seek to build a portfolio of royalty interests focusing on earnings growth and diversification by making complementary and value accretive investments Key objectives of this strategy is to achieve: • Multiple sources of earnings grow
Slide 15: Considering ESG in new investments
Considering ESG in new investments Deterra seeks to create sustainable value by applying strong ESG policies and practices in making new investments Account for ESG risks Seek contractual Continue to monitor and opportunities when protections and operators’ ESG evaluating investment sufficient discl
Slide 16: Six key drivers of success
Six key drivers of success Maximise value from portfolio Execute disciplined growth Robust cashflows with strong embedded growth in Increase scale and diversification through 1 MAC 4 complementary acquisitions 2 Low cost, scaleable corporate structure 5 Disciplined capital allocation 3 Maximise fran
Slide 17: For more information
For more information Investor and Media enquiries Rob Ward Corporate Development and Investor Relations Mobile: + 61 (0) 431 596 831 Email: robert.ward@deterraroyalties.com Brendan Ryan Chief Financial Officer Email: investor.relations@deterraroyalties.com Deterra Royalties Limited ACN 641 743 348 L
Slide 18: Portfolio of royalties
Portfolio of royalties Project Counterparty Location Commodity Status Royalty Key Terms BHP Billiton Minerals Pty Ltd; 1.232% of MAC product Itochu Minerals & Energy of revenue Mining Area C (MAC) Pilbara, WA Iron Ore Producing Australia Pty Ltd; $1 million per 1mdmt Mitsui Iron Ore Corporation Pty
Slide 19: Underlying EBITDA and earnings adjustments
Underlying EBITDA and earnings adjustments Earnings and earnings adjustments1 Pre-demerger Post-demerger Total Period2 Period Period $’000 $’000 $’000 Net Profit After Tax 20,393 12,948 33,341 add back income tax expense 8,757 5,648 20,917 add back income tax expense on acquired receivable 6,512 Pro
Slide 20: Income statement
Income statement Statement of profit or loss Pre-demerger Post-demerger Total per financial Period Period report $’000 $’000 $’000 MAC royalty 24,067 24,382 48,449 MAC royalty adjustments 4,848 4,848 Other royalties 351 211 562 Total Royalty Revenue 29,266 24,593 53,859 Valuation gain on acquired re
Slide 21: Balance sheet
Balance sheet $’000 31-Dec-20 Cash and cash equivalents 188 Trade and other receivables 25,092 • December quarter 2020 MAC royalty recognised as a receivable with an Income tax receivable 363 associated deferred tax liability Prepayments 1,114 Total Current Assets 26,757 Royalties intangible assets
Slide 22: Financial performance
Financial performance FY21 interim period cash flow was impacted by acquisition of the MAC asset and dividends distributed pre-demerger Assets and liabilities recognised as a result of the acquisition $M Cashflow 15th June 2020 to 31st December 2020 Royalty receivable, net of tax payable – June 2020
Slide 23: Deterra Royalties
( Deterra ROYALTIES