Ecora Royalties Plc · LSE:ECOR
Ecora Royalties — Anglo Pacific Group — H1 2019 Earnings Presentation
21 slides from Ecora Royalties's earnings presentation, August 2019
Slide 1: Growing a Global Natural Resources Company
Anglo Pacific Group PLC GROWING A GLOBAL NATURAL RESOURCES COMPANY Results for the half year ended 30 June 2019
Slide 2: Important Disclaimer
2 IMPORTANT DISCLAIMER This document has been prepared and issued by and is the sole responsibility of Anglo Pacific Group PLC (the “Company”) and its subsidiaries for selected recipients. It comprises the written materials for a presentation to investors and/or industry professionals concerning the
Slide 3: Overview
3 OVERVIEW Our aim is to be the leading international royalty and streaming company, with a diversified portfolio focused on bulk commodities, energy storage related minerals and base metals ANGLO PACIFIC GROUP PLC RESULTS FOR THE HALF YEAR ENDED 30 JUNE 2019
Slide 4: H1 2019 Highlights
4 H1 2019 HIGHLIGHTS H1 2019 H1 2018 £'000 % Mvt £'000 Kestrel 22,692 60% 14,225 Maracás Menchen 1,783 (16%) 2,125 Narrabri 2,273 56% 1,456 Denison - interest 975 (10%) 1,079 Royalty related dividends 3,420 141 Four Mile 110 116% 51 Royalty related revenue 31,253 64% 19,077 EVBC - royalty receipts 1
Slide 5: Track Record
5 TRACK RECORD We have demonstrated our ability to successfully identify and acquire accretive royalty related assets over the past five years, increasing the size and diversification of our portfolio, deploying ~£130 million into acquisitions and returning ~£56 million to shareholders as dividends
Slide 6: Acquisitions Have Increased Portfolio Income
6 ACQUISITIONS HAVE INCREASED PORTFOLIO INCOME PORTFOLIO CONTRIBUTION 2014-2018 (1) (In GBP millions) Anglo Pacific portfolio pre-2014 (1) Acquisitions 2014 to present (2) (3) £70 £60 £50 £40 ANGLO PACIFIC GROUP PLC RESULTS FOR THE HALF YEAR ENDED 30 JUNE 2019 £30 £20 £10 £0 2014 2015 2016 2017 2018
Slide 7: Key Metrics vs. Peers
7 KEY METRICS VS. PEERS (1) P / NAV EV / 2019E EBITDA 2019E DIVIDEND YIELD (2) (Ratio) (Ratio) (%) 1.0x APG 9% median APG 6.0x APG 4.1% discount rate ANGLO PACIFIC GROUP PLC RESULTS FOR THE HALF YEAR ENDED 30 JUNE 2019 1.7x Peer Median 5% median Peer Median 21.8x Peer Median 1.3% discount rate Sourc
Slide 8: Financial Review
8 ANGLO PACIFIC GROUP PLC RESULTS FOR THE HALF YEAR ENDED 30 JUNE 2019 FINANCIAL REVIEW
Slide 9: Financial Highlights
9 FINANCIAL HIGHLIGHTS ADJ. EARNINGS/(LOSS) PER SHARE(1) DIVIDEND COVER(2) FREE CASH FLOW PER SHARE(3) (Pence per share) (Cover per share) (Pence per share) H1 H2 H1 H2 H1 H2 18.0 23.6 16.8 2.4x 2.3x 22.3 12.1 3.7x 15.2 9.8 10.7 1.6x 7.9 2.5 2.9 0.4x (2.0) 0.0x ANGLO PACIFIC GROUP PLC RESULTS FOR TH
Slide 10: Income Summary
10 INCOME SUMMARY FIGURES IN £m H1 2019 H1 2018 2018 2017 Kestrel 22.7 14.2 32.6 28.8 Maracás Menchen 1.8 2.1 5.9 2.0 Narrabri 2.3 1.5 3.5 4.9 Four Mile 0.1 0.1 0.1 -- EVBC (1) -- -- -- 1.7 Royalty income 26.9 17.9 42.1 37.4 Royalty related dividends 3.4 0.1 1.9 -- Interest – McClean Lake & Jogjakar
Slide 11: Summary Balance Sheet
11 SUMMARY BALANCE SHEET FIGURES IN £m 30 Jun 2019 31 Dec 2018 30 Jun 2018 Coal royalties (Kestrel) 123.8 109.8 102.9 Royalty financial instruments 66.7 46.2 24.8 Royalty and exploration intangibles 69.8 71.2 75.7 Other long-term receivables 19.1 19.3 19.9 Total royalty assets 279.5 246.5 223.3 Mini
Slide 12: Financial Resources
12 FINANCIAL RESOURCES REFINANCING PROVIDES ~US$100M OF LIQUIDITY H1 2019 CHANGE IN CASH BALANCE (In £ million) £0.1 £0.0 (£0.1) £3.4 (£2.5) (£0.3) £2.0 (£6.3) (£1.0) (£8.3) £30.9 (£8.6) ANGLO PACIFIC GROUP PLC RESULTS FOR THE HALF YEAR ENDED 30 JUNE 2019 £14.5 £5.2 Opening Royalty Denison LIORC M&E
Slide 13: Royalty Portfolio Update
ANGLO PACIFIC GROUP PLC RESULTS FOR THE HALF YEAR ENDED 30 JUNE 2019 13 ROYALTY PORTFOLIO UPDATE
Slide 14: Geographic and Commodity Exposure
14 GEOGRAPHIC AND COMMODITY EXPOSURE A DIVERSE PORTFOLIO OF 14 PRINCIPAL ROYALTY AND STREAMING RELATED ASSETS OVER FIVE CONTINENTS WITH LIMITED GEOPOLITICAL RISK 7 PRODUCING IRON ORE COMPANY OF CANADA ROYALTY COMMODITY OPERATOR LOCATION ROYALTY TYPE MCCLEAN LAKE MILL AND RATE / EVBC STREAM VOLUME1 K
Slide 15: Portfolio Update: Kestrel & LIORC
15 PORTFOLIO UPDATE : KESTREL & LIORC KESTREL (1) (2) LIORC (3) • Rio Tinto’s 80% Kestrel stake acquired from Rio Tinto by EMR Capital (EMR) • Anglo Pacific has deployed ~£10 million year-to-date in LIORC share purchases as of (52%) and PT Adaro Energy (Adaro) (48%) for a US$2.25 billion considerati
Slide 16: Royalty Portfolio Update: Narrabri
16 ROYALTY PORTFOLIO UPDATE : NARRABRI PRODUCING (1) LONG TERM OPTIONS FOR NARRABRI “STAGE 3 PROJECT” (1) ▪ Narrabri 2018 performance was impacted by geotechnical issues associated with a fault in the coal body and weighting events, requiring Whitehaven Coal to perform step around procedures ▪ Norma
Slide 17: Royalty Portfolio Update: Maracás Menchen
17 ROYALTY PORTFOLIO UPDATE : MARACÁS MENCHEN PRODUCING (1) HISTORICAL MARACÁS MENCHÉN PRODUCTION (1) (In Kt V2O5) • HY 2019 production of 4,614 tonnes of V2O5 with record monthly production of 926 H1 H2 Annual nameplate capacity post expansion tonnes achieved in June 2019 as a result of the expansi
Slide 18: Royalty Portfolio Update: Other Producing
18 ROYALTY PORTFOLIO UPDATE : OTHER PRODUCING DENISON / MCCLEAN LAKE MILL: PRODUCING (1) EL VALLE AND CARLÉS MINES (EVBC): PRODUCING (2) ▪ Cigar Lake produced 9.9 Mlbs of U3O8 in the first half of 2019 ▪ Productivity enhancements allowing for delivery of higher processed ore volume and grades to the
Slide 19: Diversified Portfolio of Royalties
19 DIVERSIFIED PORTFOLIO OF ROYALTIES COMMODITY EXPOSURE(1) STAGE OF PRODUCTION(1) GEOGRAPHIC EXPOSURE(1) ANGLO PACIFIC GROUP PLC RESULTS FOR THE HALF YEAR ENDED 30 JUNE 2019 56% of the royalty portfolio is now non-coking 94% of the portfolio is producing royalties 99% of the portfolio is in establi
Slide 20: Outlook
20 OUTLOOK GIVEN OUR TRACK RECORD TO DATE, WE ARE CONFIDENT THAT WE CAN DELIVER ON OUR GROWTH AMBITIONS • We expect 2019 to produce healthy organic growth from our royalty portfolio. This should, subject to prevailing commodity prices, result in another strong year of earnings and cash generation •
Slide 21: Endnotes
21 ENDNOTES Third party information As a royalty and streaming Company, the Group often has limited, if any, access to non-public scientific and technical information in respect of the properties underlying its portfolio of royalties, or such information is subject to confidentiality provisions. As