New Hope Corporation Limited · ASX:NHC
New Hope — Corporate Update (September 2019)
40 slides from New Hope's corporate update, Sep 27, 2019
Slide 1: Bengalla Mine Site Visit for Analysts
NEW HOPE GROUP ae The Bengalla Homestead BENGALLA MINE SITE VISIT FOR ANALYSTS 26 SEPTEMBER 2019 New Hope Corporation Limited (ASX code: NHC) newhopegroup.com.au rief Operating Officer ager, Bengalla Mine Presented by Andrew Boyd - C and Cam Halfpenny — General Ma
Slide 2: New Hope Group at a glance
For personal use only • Majority Australian-owned and operated • Diversified energy company • Based in Ipswich since 1952 • Long term major shareholder (currently 49.98%), Washington H. Soul Pattinson (ASX:SOL) • One of Queensland’s largest ASX listed corporations by market capitalisation (circa A$2
Slide 3: Coal operations, projects, oil, port and agriculture
For personal use only Coal Operations Coal Projects Agriculture Lenton Joint Venture Burton Mine Acland Pastoral Operations Bengalla Mine Bengalla Pastoral Operations North Surat Project Oil Operations and Exploration Yamala Project New Acland Mine Bridgeport Energy New Acland Mine Coal Exploration
Slide 4: FY2019 financial highlights
For personal use only Profit after income tax Cash generated from ops (before non regular items) (before interest, tax and Total tonnes sold acquisition costs) $268M $510M 10.9M ▲3% from 2018 ▲21% from 2018 ▲17% from 2018 State Government EBITDA Final dividend Certified Rehabilitated (before non reg
Slide 5: Coal sales and production volumes
For personal use only New Acland Coal sale volumes 4.1Mt ▼8% from 2018 EXPORT Total tonnes produced 10.6Mt Jeebropilly ▲23% from 2018 0.7Mt 10.9Mt In line with 2018 ▲21% from 2018 DOMESTIC Bengalla (80%*) 6.0Mt 0.3Mt ▲ 5% from 2018 ▲60% from 2018 * New Hope’s equity share increased from 40% to 70% o
Slide 6: Profit before tax by segment
For personal use only $m 250.0 239.0 197.0 200.0 182.0 172.0 150.0 100.0 50.0 15.0 - (7.3) (19.0) (21.0) (50.0) Coal mining Coal mining Other Treasury QLD NSW 2019 2018 Please refer to Appendix for reconciliation of Non IFRS Financial Information 6 Bengalla Mine Site Visit for Analysts | September 2
Slide 7: Profit before tax movement 2018 to 2019
For personal use only $m 82.1 410 21.5 380 50.2 29.6 4.7 16.5 350 9.1 384.3 373.2 320 290 Actuals QLD Revenue QLD rehabilitation QLD mining NSW Revenue NSW Costs NSW acquisition Treasury and Actuals 31 July 2018 Volume movements other AUD Price R&M / Other 40% other 31 July 2019 Please refer to Appe
Slide 8: Cash and debt
For personal use only • During the year, the Company entered into an amortising Cash and Debt $m secured loan facility for $600 million (amortised to $570 million) with a syndicate of Australian and international banks. The 500 Company had been debt free since 2006 prior to the draw down 400 for the
Slide 9: Total Recordable Injury Frequency Rate
For personal use only NHG Quarterly Total Recordable Injury Frequency Rate (TRIFR)^ 30 25 20 15 10 5 0 TRIFR Linear (TRIFR) ^ Bengalla included from 1 December 2018 9 Bengalla Mine Site Visit for Analysts | September 2019
Slide 10: New Hope Bengalla Mine
NEW HOPE BENGALLA MINE Cam Halfpenny — General Manager, Bengalla Mine
Slide 11: Video
For personal use only You can watch this video online at: https://www.youtube.com/watch?v=MoMLTk8nXlU&feature=youtube 11 Bengalla Mine Site Visit for Analysts | September 2019
Slide 12: Bengalla mine overview
For personal use only • Lease established – 1996 • First Coal – 1998 • Tonnes Mined to date ~ 125 million tonnes saleable coal • Enviable strip ratio and yield • History of strong operational performance • Development consent approval to continue mining until 2039 • Joint venture structure now simpl
Slide 13: Community engagement
For personal use only • Science Technology Engineering Mathematics (STEM) education for local students via Muswellbrook Academy of STEM Excellence • Mining Engineering scholarship program • Annual vacation student program and apprenticeship program • Volunteering – staff donating time for community
Slide 14: Bengalla
For personal use only 14 Bengalla Mine Site Visit for Analysts | September 2019
Slide 15: Bengalla
For personal use only 15 Bengalla Mine Site Visit for Analysts | September 2019
Slide 16: Bengalla
For personal use only 16 Bengalla Mine Site Visit for Analysts | September 2019
Slide 17: Workforce, equipment and highlights
For personal use only Current workforce: • 442 permanent employees • 244 Category one contractors • 139 category 3 contractors • Current enterprise agreement expires early 2022 Equipment and installed facilities: • 1 dragline • 7 excavators • 36 trucks (200t – 320t capacity) • 4 drills • 1 coal hand
Slide 18: Production
For personal use only 60 Production 14 12 50 10 40 8 30 6 20 4 10 2 - - 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 Prime Waste ROM Coal Saleable Coal 18 Bengalla Mine Site Visit for Analysts | September 2019
Slide 19: New Hope share of Bengalla production
For personal use only • New Hope share of saleable coal production 6.0Mt • Profit before income tax and non regular items of $239.1 million • $631.1 million cash contribution since 1 March 2016 • Continued focus on operational efficiency • The Company acquired an additional 40% interest in the Benga
Slide 20: Integration of Bengalla into New Hope
For personal use only • A major focus during the second half of 2019 has been the integration of Bengalla into the New Hope business • Key activities have been focused on marketing, finance, human resources, procurement and systems with a range of support functions now provided to site from New Hope
Slide 21: Other New Hope Projects
OTHER NEW HOPE PROJECTS Andrew Boyd — Chief Operating Officer
Slide 22: New Acland Stage 3 approvals
For personal use only • Environmental Authority granted March 2019 • Court of Appeal ruled in favour of New Hope in September 2019 • Mining Leases and Associated Water Licence still under consideration • Production and employment levels to reduce in November 2019 due to inaction from Queensland Gove
Slide 23: Jeebropilly closure and West Moreton land
For personal use only • FY2019 focus has been on Finishing Well and leaving New Hope Group Ipswich land holdings (shown in orange) a positive legacy in the region • Jeebropilly Mine last coal expected before end of calendar 2019 • Rehabilitiation works being undertaken at the New Oakleigh East • Con
Slide 24: Lenton Joint Venture (Burton and Lenton)
For personal use only • Combined project including former Burton Mine and New Hope’s neighbouring Lenton Project • 90% Joint Venture participant • Even split of coking/thermal coal • Combined 412 million tonne resource* • Planned ~1.5 million tonne per annum for approx. 16 years • First coal estimat
Slide 25: Rehabilitation and pastoral operations
For personal use only • 349ha of progressive rehabilitated land certified by the Queensland State Government • 180ha of rehabilitated mined land handed over to pastoral operations • Pasture management strategy, including use of rehabilitated land for grazing is ongoing • Continued to build size and
Slide 26: Coal Markets & Outlook
COAL MARKETS & OUTLOOK Andrew Boyd — Chief Operating Officer
Slide 27: Group coal revenue by jurisdiction
For personal use only Group Coal Revenue by Jurisdiction • Diversified revenue base – lowering market risk • Over 70% of revenue derived from stable, developed 4% economies looking for higher quality coals 8% 1% • Growth markets being pursued but not at the expense of quality of revenue 8% • Vietnam
Slide 28: Asian demand for coal quality
For personal use only • Traditionally Japan has demanded the highest quality coal in the world due to ash disposal costs, and a drive to clean-up industry in the 1970’s High • Taiwan is now seeking lower ash, higher energy JAPAN coals for environmental reasons 140Mtpa • Korea is seeking lower sulphu
Slide 29: Thermal coal market: China and Europe
For personal use only • Thermal coal has not been competitive against cheap gas into Europe • China’s total thermal coal imports are flat year on year with increased domestic supply and slower growth in demand. Domestic Chinese coal prices held up • Newcastle thermal coal prices appear to have found
Slide 30: Thermal coal imports and exports
For personal use only • Thermal coal imports to Vietnam and Pakistan have been growing strongly • USA, Columbia and South Africa have suffered cuts to thermal coal exports as reliant upon European market • Russia and Australia increasing exports of higher energy coal whilst Indonesia continues to in
Slide 31: CRU Thermal Coal Market Outlook
For personal use only CRU Thermal Coal Market Outlook - July 2019 31 Bengalla Mine Site Visit for Analysts | September 2019
Slide 32: Russia and Indonesia supply
For personal use only • Russia is a growing competitor in the Seaborne thermal coal market • Indonesian exports are expected to decrease due to increasing domestic demand CRU Thermal Coal Market Outlook - July 2019 32 Bengalla Mine Site Visit for Analysts | September 2019
Slide 33: CRU Data
For personal use only CRU Data 33 Bengalla Mine Site Visit for Analysts | September 2019
Slide 34: Well positioned to meet Asian energy demand
For personal use only New Hope is well positioned to meet the growing energy demands of its Asian customers Coal operations Projects and development Growing Developing Lenton Joint Obtaining approvals to meet Improving safety performance production levels Venture Burton Mine future demand Bengalla G
Slide 35: Disclaimer
For personal use only 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 infor
Slide 36: For personal use only
For personal use only
Slide 37: Reconciliation of profit and EBITDA
For personal use only Year Ended 31 July (A$ millions) *Restated Variance (%) 2019 2018 Profit after tax 210.6 149.5 41% Income tax expense (97.4) (64.3) 51% Profit before income tax 308.0 213.8 44% Non regular items before tax (76.3) (159.4) (52%) Profit before income tax and non regular items 384.
Slide 38: Segment reconciliation, year ended July 2019
For personal use only (A$ million) Coal Mining QLD Coal Mining NSW Other Treasury Total Year Ended 31 July 2019 Profit / (loss) before tax from continuing operations after 169.2 191.4 (41.0) (11.7) 307.8 non regular items Non regular items before tax: Insurance proceeds from shiploader 2.4 - - - 2.4
Slide 39: Segment reconciliation, year ended July 2018
For personal use only Year Ended 31 July 2018 Coal Mining QLD Coal Mining NSW Other Treasury Total Profit / (loss) before tax from continuing operations after non 196.5 181.9 (126.1) 15.3 267.6 regular items Non regular items before tax Impairment of coal exploration and evaluation assets - - (91.5)
Slide 40: Earnings per share reconciliation
For personal use only Year Ended 31 July (cents per share) Restated* 2019 2018 Basic earnings per share (cents) (before non regular items) 32.3 31.5 Insurance proceeds from shiploader 0.2 - Gain / (loss) from discontinued operations - (4.6) Onerous contract and related expenses (2.4) (1.3) Acquisiti