New Hope Corporation Limited · ASX:NHC
New Hope — H1 2014 Earnings Presentation
45 slides from New Hope's earnings presentation, Mar 25, 2014
Slide 1: Financial Results Release Half-Year Ended 31 January 2014
For personal use only FINANCIAL RESULTS RELEASE Half-Year Ended 31 January 2014 25 March 2014
Slide 2: Disclaimer
DISCLAIMER For personal use only 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 3: Agenda
AGENDA For personal use only • Overview • Sustainability • Operations and Financial Summary • Cost Management • Community & Social Responsibility • Thermal Coal Markets • Coal Projects • Oil and Gas • Outlook 3 | 25 March 2014
Slide 4: Overview
For personal use only OVERVIEW
Slide 5: Overview
OVERVIEW For personal use only • Most challenging coal market environment since the GFC • AUD:USD remains high even though Australian terms of trade have declined • Profit after tax totals $22.7 million; $7.3 million from coal mining and logistics; and $15.4 million from treasury and investments • S
Slide 6: Sustainability
For personal use only SUSTAINABILITY
Slide 7: Focus on Sustainability
FOCUS ON SUSTAINABILITY For personal use only To have a successful coal business: 1. Competitive resource endowment – Strip Ratio, Location, Coal Type 2. Quality People – Ethics, Energy, Skills – Average 30+ years of experience in Management Group 3. Balance Sheet Capability – Cash and cash equivale
Slide 8: Safety Performance
SAFETY PERFORMANCE For personal use only • Embedding of the 12 month moving averages behavioural health and safety program (rolled out in 2013) is now underway • Cultural transformation being evidenced through change in language and attitudes • Significant reduction in High Potential Incidents is a
Slide 9: Operations & Financial Summary
For personal use only OPERATIONS & FINANCIAL SUMMARY
Slide 10: Production & Sales Performance
PRODUCTION & SALES PERFORMANCE For personal use only Australian Operating Results 7,000 Production Sales 6,000 Tonnes - 000's 5,000 4,000 3,000 2,000 1,000 - 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 Years ended 31 July 10 | 25 March 2014
Slide 11: Production & Sales Tonnages
PRODUCTION & SALES TONNAGES For personal use only 6 Months Ended 31 January (million tonnes) 2014 2013 Change ROM Coal Mined 5.350 5.848 -8.5% Saleable Coal Production 2.696 3.040 -11.3% Coal Sold 3.010 2.740 9.9% • Scheduled closure of New Oakleigh mine impacting production – Lower cost per tonne t
Slide 12: Coal Production Volumes
COAL PRODUCTION VOLUMES For personal use only 6 Months Ended 31 January (million tonnes) 2014 2013 Change New Acland 2.330 2.404 -3.1% New Oakleigh Nil 0.220 -100.0% Jeebropilly 0.366 0.416 -12.0% TOTAL 2.696 3.040 -11.3% • Management of Inventory levels – Product stockpile decreased by 142,000t to
Slide 13: Coal Sales Volumes
COAL SALES VOLUMES For personal use only 6 Months Ended 31 January (million tonnes) 2014 2013 Change Export 2.930 2.654 10.4% Domestic 0.080 0.086 -7.0% TOTAL 3.010 2.740 9.9% • One third of export sales are premium low ash coal with pricing based on the JFY annual price • The balance of export sale
Slide 14: Key Financial Results
KEY FINANCIAL RESULTS For personal use only 6 Months Ended 31 January (A$m) 2014 2013 Change Revenue from ordinary activities 284.9 322.9 -11.8% Earnings before interest tax depreciation and 64.0 116.8 -45.2% amortisation^ Earnings before interest and tax^ 34.7 93.2 -62.8% Profit before income tax 3
Slide 15: Group NPAT Half Year Comparison
GROUP NPAT HALF YEAR COMPARISON For personal use only 15 | 25 March 2014
Slide 16: Cost Management
For personal use only COST MANAGEMENT
Slide 17: Production Costs
PRODUCTION COSTS For personal use only • Focus on cost management and productivity initiatives across our operating sites • Marketing and transportation costs reduced from tighter control of road transport and train load out from $24.0/t to $22.6/t 17 | 25 March 2014
Slide 18: Overhead Costs
OVERHEAD COSTS For personal use only 6 Months Ended 31 January ($million) 2014 2013 Change Administration 6.556 9.536 -31.3% Other expenses 2.075 6.490 -68.0% • Administration cost improvements have been achieved through diligent review of staffing and effective management of external suppliers • Ot
Slide 19: Community & Social Responsibility
For personal use only COMMUNITY & SOCIAL RESPONSIBILITY
Slide 20: Community & Social Responsibility
COMMUNITY & SOCIAL RESPONSIBILITY For personal use only • New Hope actively partners with communities surrounding its operations • The New Acland Community Reference Group provides insight on local topics • New Hope contributes around $700 000 each year to local community projects and not-for-profit
Slide 21: Community & Social Responsibility
COMMUNITY & SOCIAL RESPONSIBILITY For personal use only • New Hope is committed to progressive rehabilitation of disturbed land across its operations • Around 214 hectares of land has been rehabilitated at New Acland to date • Acland Pastoral Company manages around 2,400 head of cattle on 4,000 hect
Slide 22: New Oakleigh Rehabilitation
NEW OAKLEIGH REHABILITATION For personal use only 12 February 2014 22 | 25 March 2014
Slide 23: Chuwar Rehabilitation
CHUWAR REHABILITATION For personal use only gully tree gully tree 21 October 2013 11 February 2013 23 | 25 March 2014
Slide 24: Video Presentation
VIDEO PRESENTATION For personal use only 24 | 25 March 2014
Slide 25: Thermal Coal Markets
For personal use only THERMAL COAL MARKETS
Slide 26: Coal Prices
COAL PRICES For personal use only • Average revenue per tonne sold was down 7.1% over the first half 2014 in comparison with the first half of 2013 • Spot thermal benchmark has continued to be soft. Currently around US$75/tonne Newcastle benchmark SOURCE: Matau Advisory 26 | 25 March 2014
Slide 27: Coal Demand
COAL DEMAND For personal use only • Future growth is Asia • Australia is well positioned to meet this demand SOURCE: IEA Euracoal 27 | 25 March 2014
Slide 28: Where Will the Coal Come From?
WHERE WILL THE COAL COME FROM? For personal use only SOURCE: Wood Mackenzie 28 | 25 March 2014
Slide 29: The Cost of New Projects
THE COST OF NEW PROJECTS For personal use only • Proposed Australian projects are amongst the most expensive of advanced projects globally • At current prices only a handful of projects, and no new Australian projects, are viable • Australian projects remain well positioned to capture a share of the
Slide 30: History of Industrial Development and Pollution Management
HISTORY OF INDUSTRIAL DEVELOPMENT AND POLLUTION MANAGEMENT For personal use only • Coal’s opponents state that China will need to reduce coal consumption to lower its air pollution • Japan has been able to improve its air quality while at the same time increasing its coal consumption Sources: Air Po
Slide 31: Coal Projects
For personal use only COAL PROJECTS
Slide 32: Coal Projects Location Map
COAL PROJECTS Location Map For personal use only 32 | 25 March 2014
Slide 33: New Acland Continuation Plan
COAL PROJECTS New Acland Continuation Plan For personal use only Key compromises from previous proposal • Key Acland township assets retained including Tom Doherty Park, the War Memorial and Acland No 2 Colliery • Closest potential mining operations are now 10km from Oakey • Reduction in mining foot
Slide 34: New Acland Continuation Plan Forecast Timetable
COAL PROJECTS New Acland Continuation Plan For personal use only Forecast Timetable • EIS public consultation period ended 3 March 2014 • Supplementary EIS (if required) Q2 2014 • Coordinator-General Report Q3 2014 • Environmental Authority Conditions Q4 2014 • Granting of Mining Lease in 2015 • Con
Slide 35: Coal Developments
COAL PROJECTS Coal Developments For personal use only • Colton • 0.5 Mtpa open cut coking coal project near Maryborough • Environmental approvals/mining lease being sought, exploration/design well advanced • Elimatta • 5 Mtpa open cut thermal coal project near Taroom • Work has commenced on the Supp
Slide 36: Oil and Gas
For personal use only OIL AND GAS
Slide 37: Bridgeport
BRIDGEPORT For personal use only 6 Months Ended 31 January (bbls) 2014 2013 Change Cuisinier Production (1 Aug 13 to 17 Dec 13) 41,952 0 100.0% Cuisinier Production (18 Dec 13 to 31 Jan 14) 11,353 0 100.0% Production (Other fields) 36,315 36,452 -0.0% TOTAL 89,620 36,452 145.9% 37 | 25 March 2014
Slide 38: Bridgeport
BRIDGEPORT For personal use only 38 | 25 March 2014
Slide 39: Bridgeport
BRIDGEPORT For personal use only 39 | 25 March 2014
Slide 40: Outlook
For personal use only OUTLOOK
Slide 41: Focus for the Next Year
FOCUS FOR THE NEXT YEAR For personal use only • Pursue responsible cost reductions while retaining the capacity of the business to grow • Safety of our employees • Progress coal projects with regard to prevailing market conditions • Take advantage of appropriate acquisition opportunities • Actively
Slide 42: Long Term Focus
LONG TERM FOCUS For personal use only • Respected by our community as an operator of high quality, profitable coal assets • Significant growth achieved in oil and gas business through acquisition and organic growth • Seek to extract value from energy supply chains • Continued exploration and develop
Slide 43: Appendix
For personal use only APPENDIX
Slide 44: Reconciliation of Non-IFRS Financial Information
RECONCILIATION OF NON-IFRS FINANCIAL INFORMATION For personal use only 6 Months Ended 31 January (A$m) 2014 2013 Net profit after tax 22.7 68.8 Income Tax 11.0 24.4 Petroleum Resource Rent Tax 1.0 0.0 Profit before income tax 34.7 93.2 Interest Expense 0.0 0.0 Earnings before interest and tax 34.7 9
Slide 45: newhopegroup.com.au
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