Mmg Ltd. · HKEX:1208
Mmg — Minmetals Resources — 1H 2012 Earnings Presentation
27 slides from Mmg's earnings presentation, Aug 30, 2012
Slide 1: Minmetals Resources Limited
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Slide 2: Disclaimer
Disclaimer The information contained in this presentation is intended solely for your personal reference and may not be reproduced, redistributed or passed on, directly or indirectly, to any other person (whether within or outside your organisation/firm) or published, in whole or in part, for any pu
Slide 3: Highlights
Highlights • Safety anchors our performance – TRIFR 3.6 down from 4.1 at 31/12/11. • Robust production and higher sales volumes. • All sites better or in line with annual production and cost guidance. • Completed acquisition of Anvil. • Continued progress on developing solid business foundations to
Slide 4: Financial highlights
Financial highlights • EBITDA1 of US$444.5m (down 2%). Foreign exchange and commodity price performance • Operating profit (EBIT)1 of Indexed, 1H11=100 1H12 1H11 US$247.4m (down 29%). 100 • Net Profit After Tax attributable to A$ / US$ 100 equity holders of the Company of US$122.4m. Zinc 85 • Net ca
Slide 5: EBIT variance analysis
EBIT variance analysis EBIT variance – continuing operations US$ million 600 Controllable 500 Kinsevere Volume 18.4m 170.3m 400 One off Costs items (77.2m) Exploration 300 (14.0m) Other (215.9m) FX (17.0m) 3.3m D&A Price (65.2m) 200 1H11 1H11 (118.9m) EBIT Underlying 563.6m EBIT 1H12 347.7m EBIT 247
Slide 6: Cash flow analysis
Cash flow analysis • Cash generated from operations of Capital expenditure US$413m (down 10%). US$ million 1H12 1H11 • Invested US$1,607m including Growth & Mine Development US$1,310m to purchase Anvil and capital expenditure of US$321m. Mine Development – Century 79.6 59.4 • Anvil purchase financed
Slide 7: Financial resources and liquidity analysis
Financial resources and liquidity analysis • Total assets up 21% to US$4,180m Gearing ratio following the acquisition of Anvil. US$ million 30 June 12 30 June 11 • Shareholders’ equity up 9% to Cash and cash 155.3 1,096.5 US$1,558m. equivalents Less: total borrowings 1,363.3 1,081.7 • Total liabilit
Slide 8: Financial dashboard
Financial dashboard Revenue by commodity Revenue by customer location 3% 29% Australia 36% Zinc Europe Copper 12% Japan & Korea Gold 15% Other Asia 3% 46% Silver 5% Lead 34% Other China 10% 7% China Minmetals EBITDA by operating segment C1 operating costs 6% 10% 23% People 26% Century External Servi
Slide 9: Century
Century Highlights Financials • Strong performance compared to annual production US$ million 1H12 1H11 % and C1 unit cost guidance. Revenue 377.0 374.4 1 • Record quarterly zinc production achieved in 2Q12 – partly due to preparation for the planned plant/port EBITDA 145.2 153.6 (5) shutdown and Pip
Slide 10: Golden Grove
Golden Grove Highlights Financials • Zinc performing favourably and copper unfavourably US$ million 1H12 1H11 % compared to annual guidance - mine plan will favour copper in 2H12. Revenue 165.2 152.2 9 • First ore from new copper open pit expected to be EBITDA 38.9 41.5 (6) delivered to the Run Of M
Slide 11: Kinsevere
Kinsevere Highlights Financials • Performing favourably compared to annual US$ million 1H12 1H11 % production and C1 cost guidance. Revenue 96.6 - N/A • Sudden and unexpected network-wide power disruptions impacted production ramp up in 1H12. EBITDA 44.9 - N/A • Temporary diesel generators were succ
Slide 12: Rosebery
Rosebery Highlights Financials • Performing in line with annual production and C1 US$ million 1H12 1H11 % cost guidance. Revenue 150.0 126.5 19 • Revenue up due to higher lead, gold and copper sales volumes. EBITDA 58.1 43.4 34 • Ore mined increased following upgrades to the EBIT 46.8 34.7 35 mobile
Slide 13: Sepon
Sepon Highlights Financials • Favourable performance compared to annual US$ million 1H12 1H11 % production and C1 cost guidance. Revenue 429.9 417.6 3 • Record quarterly and half year copper cathode production records achieved. EBITDA 264.7 272.1 (3) • Focus on improving efficiencies and reducing EB
Slide 14: Strategic positioning for long-term success
Strategic positioning for long-term success Development projects Growth expenditure US$ million US$224m towards growth projects: • Dugald River (US$92m), • Mine development at Century and Sepon (US$103m). Annual total capital expenditure guidance revised to US$820m – 1H12 US$900m (decreased from US$
Slide 15: Operating assets provide solid foundation for growth
Operating assets provide solid foundation for growth • Robust production with higher sales EBITDA by operating segment volumes reported in all commodities. US$ million Century Golden Grove • Cost management remains a priority - Kinsevere C1 costs below the first half 2011 and Rosebery 600 Sepon inli
Slide 16: Our strategy
Our strategy • Maximise value of existing assets through identification of bottlenecks and efficiency opportunities. • Develop pipeline of internal growth projects. • Class leading exploration - increase resource base and maximise asset life. • Disciplined approach to M & A - focus on long-term shar
Slide 17: Development progress of our major growth projects
Development progress of our major growth projects Dugald River • Final environmental approval received in August 2012. • Two exploration declines, now in excess of 1.6km, advancing on schedule, expecting to intersect main ore body in 4Q12. • Due for Board consideration in 2012. • Expected annual pro
Slide 18: Exploration provides a platform for growth
Exploration provides a platform for growth 2012 Exploration pipeline • Exploration is diversified by commodity, Number of projects geography and stage of development. • Focus on mine district exploration Resource Evaluation 1 project enables life of asset planning for the long-term. • New exploratio
Slide 19: Creating a simple and scalable business
Creating a simple and scalable business Asset Utilisation Operational Excellence • Measures the how effectively we are • Operational Excellence and Business using the ideal capacity of our assets. Improvement is a focus at all assets. • Helps identify causes of lost production • Opportunities can ma
Slide 20: We mine for progress
We mine for progress • Our existing assets provide a platform for future growth. • We operate our assets in a safe, efficient and cost effective manner. • We are investing to create a simple and scalable business. • We seek value accretive growth opportunities – in our existing operations, developme
Slide 21: “procress IWEIVIG
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Slide 22: Overview of assets
Overview of assets Izok Corridor copper / lead / silver / zinc Sepon gold / copper Dugald River Mutoshi Kinsevere lead / silver / zinc copper copper Century Golden Grove lead / silver / zinc copper / gold / lead / silver / zinc Legend: Rosebery Operating assets copper / gold / lead/silver / zinc Dev
Slide 23: 2012 Production and C1 cost guidance
2012 Production and C1 cost guidance Century Rosebery Zinc – production 495,000 – 505,000 tonnes Zinc – production 73,000 – 78,000 tonnes Zinc – C1 costs US$0.58 – US$0.62 / lb Zinc – C1 costs US$0.15 – US$0.20 / lb Lead – production 22,000 – 25,000 tonnes Lead – production 20,000 – 22,000 tonnes Go
Slide 24: Major growth projects
Major growth projects Exploration/ Scoping Pre-Feasibility Feasibility Execution Operations
Slide 25: Underlying income statement – continuing operations
Underlying income statement – continuing operations US$ million 1H12 1H11 Variance Underlying % Revenue 1,218.7 1,070.7 14 EBITDA 444.5 453.1 (2) Operating profit (EBIT) 247.4 347.7 (29) Net finance costs (39.7) (26.2) (52) Profit before income tax 207.7 321.5 (35) Income tax expense (71.4) (87.8) (
Slide 26: Consolidated statement of financial position
Consolidated statement of financial position US$ million 30 June 2012 31 December 2011 Cash and cash equivalents 155.3 1,096.5 Property, plant and equipment 3,128.0 1,754.9 Intangible assets 211.4 - Other assets 684.9 602.1 Total assets 4,179.6 3,453.5 Total equity 1,615.7 1,494.4 Total borrowings 1
Slide 27: Consolidated financial performance: Cash flow statement
Consolidated financial performance: Cash flow statement US$ million 1H12 1H11 Net cash generated from operations 413.0 460.9 Income tax paid (113.7) (152.9) Discontinued operations - (62.9) Net cash generated from operating activities 299.3 245.1 Purchase of property, plant and equipment (321.2) (15