Channel Infrastructure Nz Limited · NZX:CHI
Channel Infrastructure Nz — H1 2024 Earnings Presentation
26 slides from Channel Infrastructure Nz's earnings presentation, Aug 23, 2024
Slide 1: Financial Results
Financial Results For the six months ended 30 June 2024 23 August 2024 1
Slide 2: Highlights and Operating Update
Highlights and Operating Update Rob Buchanan Chief Executive Officer 2
Slide 3: HY24 Financial Highlights – Continuing Operations
HY24 Financial Highlights – Continuing Operations Total Revenue EBITDA EBITDA Margin $69.8m $48.1m 69% (+8% on HY23 $64.4m) (+10% on HY23 $43.5m) (HY23: 68%) Free Cash Flow Conversion Normalised Free Cash Flow Total Ordinary Dividend 68% $32.7m 4.4cps (HY23: 78%) (-4% on HY23 $34.0m) (+5% on HY23 4.
Slide 4: HY24 Highlights
HY24 Highlights Strong safety track record maintained Throughput up 8% to 1.8 billion litres, reflecting continued strong growth in jet fuel demand (up 22% on HY23) $48.1 million EBITDA (+10% pcp), $32.7m Normalised Free Cash Flow and an ordinary unimputed dividend of 4.4 cps Announced today a 10-ye
Slide 5: Safety-first culture
Safety-first culture Strong safety track record maintained, with process improvements for contractors Process safety incidents 1 Total Recordable Injury Frequency 6 4 13% 5 Increased reporting of 3 incidents onsite which 4 is a key management 18% focus 3 2 65% 2 1 1 28% 0 0 2020 2021 2022 2023 HY24
Slide 6: Key operational metrics
Key operational metrics Throughput: +8% to 1.8 billion litres1 Number of ships: -8% to 33 vessels1 36 • Customers delivered 1.8 billion litres of imported 1.8 b litres 1.7 b litres fuel via 33 shipments: 34 34 33 • Increased number of long-range vessels 1.6 b litres received • Trend anticipated to13
Slide 7: Growth in jet fuel volumes
Growth in jet fuel volumes Jet Throughput Million Litres 1320.9 1318.2582 1315.6164 1312.9746 1310.3328 1307.691 1305.0492 1302.4074 1299.7656 1297.1238 1294.482 1291.8402 1289.1984 1286.5566 1283.9148 1281.273 1278.6312 1275.9894 1273.3476 1270.7058 1268.064 1265.4222 H2 H1 1262.7804 1260.1386 1257
Slide 8: Diesel & petrol volumes remain stable
Diesel & petrol volumes remain stable Diesel and Petrol Throughput Million Litres H2 H1 • Diesel and petrol demand tracking 1% and 3% respectively ahead of 1,059 Envisory fuel outlook in the first half1 1,076 • Electric Vehicles (EV) represented 9% of new passenger cars in HY24 (down from 27% for FY
Slide 9: On track with all 2024 measures of delivery
On track with all 2024 measures of delivery STRATEGIC PILLAR MEASURE 2024 TARGET 1H24 PROGRESS STATUS New Zealand’s infrastructure Safely home, every day Lost Time Injuries Zero Zero partner of choice Diverse and engaged team Lift in employee engagement score +4 percentage +5 percentage points1 poin
Slide 10: Financial Update
Financial Update Continuing Operations Alexa Preston Chief Financial Officer 10
Slide 11: Strong financial result
Strong financial result HY24 HY23 %change • Continued strong EBITDA margin of 69% ($M) ($M) Revenue 69.8 64.4 8% • Depreciation increase reflects growth and conversion project Operating costs (21.7) (20.9) 4% spend in 2H 2023 EBITDA 48.1 43.5 11% EBITDA margin 69% 68% - • c.$6 million reduction in d
Slide 12: Revenue and Operating costs
Revenue and Operating costs HY24 HY23 % Revenue ($M) ($M) change • Variable terminal fees up reflecting 8% increase in throughput and PPI of 2.1% Terminal fees – fixed 24.4 23.7 3% Terminal fees – variable 30.8 29.4 5% • Private and additional storage up with a full six-month contribution from the ~
Slide 13: Strong balance sheet and stable cashflows
Strong balance sheet and stable cashflows HY24 FY23 Balance Sheet Net debt1 $326m $315m • Net debt increased from $315 million to $326 million largely reflecting investment in growth capital expenditure Liquidity headroom $77m $90m Leverage (vs target 3-4 times) 3.4x 3.6x • Lower leverage reflects g
Slide 14: Investment for resilience and growth
Investment for resilience and growth HY24 HY23 ($M) ($M) Import Terminal System 0.8 1.2 Tank maintenance 3.5 3.5 Total stay-in-business capex 4.3 4.7 % of revenue 6% 7% Growth capital expenditure 12.7 16.0 Conversion capex 8.5 11.5 Total capital expenditure 25.5 32.2 • Three scheduled tank maintenan
Slide 15: FY24 Guidance and Outlook
FY24 Guidance and Outlook Contracted Revenue Outlook $M (excludes PPI)1 140 FY24 Guidance 120 • On track to deliver EBITDA guidance of $92-$96 million, Normalised 100 Free Cash Flow guidance of $62-66 million, and stay-in-business 80 capex guidance of $11-$12 million 60 • Jet fuel demand exceeded th
Slide 16: Strategy Update
Strategy Update Rob Buchanan Chief Executive Officer 16
Slide 17: Helping fuel New Zealand’s future to 2050 and beyond
Helping fuel New Zealand’s future to 2050 and beyond OUR VISION World-class energy infrastructure company OUR PURPOSE Delivering resilient infrastructure solutions to meet changing fuel and energy needs OUR STRATEGIC PRIORITIES World-Class High Performance Grow from Support Energy Disciplined Capita
Slide 18: Growth opportunities reinforce resilience for New Zealand’s fuel supply chain
Growth opportunities reinforce resilience for New Zealand’s fuel supply chain Supporting New Zealand Supporting Aviation Creating space for site Customer contracts Government’s fuel security decarbonisation repurposing opportunities ambitions • Two new growth projects signed • Through the Fuel Secur
Slide 19: Investing in infrastructure resilience
Investing in infrastructure resilience Continued investment in becoming a world-class operator supporting long-term asset resilience and positioning Channel as a partner of choice for fuels infrastructure Investment in world-class firefighting equipment • Over the past 12 months, work has continued
Slide 20: Strategic Energy Precinct Concept near completion
Strategic Energy Precinct Concept near completion Channel Infrastructure’s unique site is well positioned to support New Zealand’s energy transition • Strategic approach to understanding the value of Channel’s 120 Industrial land value comparison1 hectares of unutilised land (book value ~$15 million
Slide 21: Growth opportunities
Growth opportunities Focused on opportunities with above WACC returns and customer contracts that provide revenue certainty Near-term growth at Marsden Point Repurposing of surplus land Growth Outside Marsden Point Supporting Fuel Resilience Future Fuels Acquisition of Other Infrastructure Continue
Slide 22: Appendix
Appendix Fa VY
Slide 23: Debt Profile
Debt Profile Fixed Debt Profile ($M) Debt Maturity Profile as at 30 June 2024 ($M) 300 175 250 150 5.80% p.a. 200 125 100 150 75 100 3.60% p.a. 50 50 25 6.75% p.a. - - Mar 24 Sep 24 Mar 25 Sep 25 Mar 26 Sep 26 Mar 27 Sep 27 Mar 28 Sep 28 Mar 29 Sep 29 2024 2025 2026 2027 2028 2029 Retail bonds (CHI0
Slide 24: Discontinued Operations
Discontinued Operations HY24 HY23 • Revenue from discontinued operations principally reflects revenue ($M) ($M) from scrap metal sales Revenue 0.2 (1.2) Operating costs (2.8) (1.5) • Operating costs include costs associated with the sale of EBITDA (2.6) (2.7) decommissioned assets, legal costs assoc
Slide 25: Glossary
Glossary Net borrowings: Bank borrowings less cash and cash equivalents and fair value hedge movements. Normalised Free Cash-flow: Cash flow from continuing operations less financing costs and stay in business capex. Excludes growth capex and conversion costs. 13% Pipeline reliability1 (availability
Slide 26: Important Information
Important Information • This presentation contains forward looking statements concerning the • In light of these risks, results could differ materially from those stated, financial condition, results and operations of Channel Infrastructure NZ implied or inferred from the forward-looking statements
Channel Infrastructure NZ — H1 2024 Earnings Presentation on 6ix