New Hope Corporation Limited · ASX:NHC
New Hope — FY2011 Earnings Presentation
34 slides from New Hope's earnings presentation, Sep 20, 2011
Slide 1: Results Presentation – Financial Year Ended 31 July 2011
Results Presentation For personal use only Financial Year Ended 31 July 2011 Presented by: Rob Neale, Managing Director & Chief Executive Officer Disclaimer IMPORTANT: The information in this document has been provided to you for information only by New Hope Corporation Limited (“NHC”) and is subjec
Slide 2: Review Agenda
Review Agenda STRATEGY AND FINANCIAL PERFORMANCE 1. Key Highlights Summary 2010 – 2011 2. Past Business Strategy 2000 – 2011 For personal use only 3. Financial Performance 2010 – 2011 COAL BUSINESS 4. Operations & Near Term Projects Review 5. Coal Projects Development Portfolio 6. Coal Business Deve
Slide 3: Key New Hope Highlights 2010 – 2011
Key New Hope Highlights 2010 – 2011 1 • New Hope’s business strategy for the past decade continues to deliver; – Profitable and competitive operations For personal use only – Superior total shareholder returns – Exceptionally strong balance sheet • To support acquisitions and project developments –
Slide 4: Who is New Hope Corporation?
Who is New Hope Corporation? • We are the 4th largest Queensland based ASX listed Corporation by market capitalisation ($4.2 billion). • 53rd largest company in Australia by market For personal use only capitalisation. • We are an Australian owner‐operator company that has been operating in Queensla
Slide 5: What does New Hope Corporation do?
What does New Hope Corporation do? 2 New Hope also: • Is an agricultural producer (Acland Pastoral Company): – Cattle grazing – Grain cropping For personal use only – Future small tree plantations • Is a multiple land use manager e.g. Swanbank Industrial Park; • Contributes significantly to the regi
Slide 6: NHC Business Strategy 2000 – 2011
NHC Business Strategy 2000 – 2011 2 Commercial Strategy • Deliver good value accretive acquisitions to NHC asset base. For personal use only – Rail, port and product diversification • Northern Energy Corporation success • Macarthur Coal and Resource Pacific acquisition attempts unsuccessful – Partic
Slide 7: Strategic Deliverables 2000 – 2011
Strategic Deliverables 2000 – 2011 2 • Purchase and • Superior total shareholder development of Acland; returns; • Explored and sold New For personal use only • Expanded Acland twice; Saraji; • Planning third expansion; • Explored and sold • Expanded QBH; Minerva; • Explored and discovered • Develop
Slide 8: New Hope Value Metrics
New Hope Value Metrics NHC Historic ROCE vs Cost of Capital (WACC) ROCE = NOPAT/Capital Employed WACC = Weighted Average Cost of Debt & Equity Capital For personal use only Superior Valuation Growth Return on Capital Employed is a key driver of wealth Select Energy Peers ROCE and Enterprise Value/Ca
Slide 9: Group NPAT Comparison
Group NPAT Comparison Including Non‐recurring Items – 2010 Actual to 2011 Actual 700 650 7.5 13.5 40.3 18.1 600 21.1 55.2 25.1 35.3 550 For personal use only 329.4 503.1 500 450 400 NPAT $m 350 300 250 183.8 200 150 100 50 0 Transport Costs Production Costs NPAT - 2010 NPAT - 2011 Export selling pri
Slide 10: Coal Production Volumes 2011
Coal Production Volumes 2011 Despite bad weather 12 Months Ended 31 July impacting coal production (million tonnes) For personal use only 2011 2010 Change New Acland 4.54 4.70 (3.5%) New Oakleigh 0.31 0.29 9.2% Jeebropilly 0.79 0.93 (15.3%) TOTAL 5.64 5.91 (4.7%) 20 September 2011 19 Coal Sales Volu
Slide 11: Production & Sales Performance
Production & Sales Performance Australian Operating Results 7,000 Production Sales 6,000 For personal use only * Tonnes - 000's 5,000 4,000 3,000 2,000 1,000 - 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 Years ended 31 July 20 September 2011 * Flood/Rail affected performance 21 Coal Business
Slide 12: Project Locations
Project Locations Location Map For personal use only 20 September 2011 23 Operations Impact of Floods – Rail Damage 20 September 2011 24
Slide 13: New Acland Operations
New Acland Operations Status Overview ‘000 tonnes 2005 2006 2007 2008 2009 2010 2011 Production 2604 2640 2989 3920 4263 4703 4540 For personal use only Sales 2446 2742 2901 3889 4115 4690 4525 • Recent expansion projects performing well; • Cyclic equipment capital replacement over next few years; •
Slide 14: Acland Pastoral Company (APC)
Acland Pastoral Company (APC) 1 • Acland Pastoral landholdings 9582 ha north west of Oakey in South East Queensland; – 0.08% of Darling Downs land area For personal use only – 5941 ha total area potentially mined over next 30+ years – 350 ha of mining area open at any one time – 170 ha of rehabilita
Slide 15: Third Acland Expansion Project (NAC-03)
Acland Pastoral Company (APC) 3 Mine Rehabilitation For personal use only Rehabilitation • Mine rehabilitation closely follows mine operations. Rehabilitation • Topsoil replaced prior to rehabilitation. • Good pastures re‐established and cattle trials underway. 20 September 2011 29 Third Acland Expa
Slide 16: NAC-03 Approval Timeline
NAC‐03 Approval Timeline Approval Process Mid 2007 We are here Initial Initial Advice Advice Statement Statement and and Referral Referral Submitted Submitted Mar 2007 For personal use only Draft Draft Terms Terms of of Reference Reference Advertised Advertised For For Public Public Comment Comment
Slide 17: QBH Port Facility
QBH Port Facility Exports Throughput (million tonnes) 2007 2008 2009 2010 2011 Exports (MT) 4.53 5.47 6.12 6.67 6.52 For personal use only TOTAL GROWTH 9% 21% 12% 9% (2%) NHC Growth 6% 24% 20% 26% 2% 20 September 2011 33 QBH Port Facility Expanded Coal Stockpiles 20 September 2011 34
Slide 18: QBH Port Facility Status Overview
QBH Port Facility Status Overview • Expansion Project and Sampler Upgrade Project complete; • Annual throughput impacted by 11 week rail outage; • Annualised capacity over last two months over 9.0 MPTA; For personal use only • Evaluating new throughput efficiency opportunities; • Assess expansion op
Slide 19: New Lenton Project
New Lenton Project Status Overview • Lenton resource of 282 MT located adjacent to Peabody’s Burton mine and in close proximity to Peabody’s North Goonyella and Rio Tinto’s Hail Creek operations. For personal use only – Comprise coking coal and thermal coal of the Rangal Coal Measures. • Recent dril
Slide 20: Northern Energy Corporation (NEC) Limited
Northern Energy Corporation (NEC) Limited Equities Holding • New Hope initially acquired 80.8% of NEC. – Now 98% with second off market share offer • Additional drilling at Colton coking coal deposit underway. – Likely thin seam open cut coal mine For personal use only • Supplementary Environment Ma
Slide 21: Coal Projects Development Portfolio
Coal Projects Development Portfolio 2011 – 2016 2 QBH Evaluation NEC Colton Project • Completed expansion to 10 MPTA; • JORC resource 80 MT (Open Cut) (Coking); – New light weight stacker and • Exploration drilling continues; For personal use only reclaim systems. • Environmental Authority early • P
Slide 22: New Hope Strategic Plan
New Hope Strategic Plan Potential Coal Production Growth Coal Production Forecast 10 9 For personal use only 8 Saleable Production (mtpa) 7 New Acland 6 Jeebropilly Oakleigh 5 Lenton 4 Colton 3 Elimatta 2 1 0 2011 2012 2013 2014 2015 2016 Year NOTES • Acland remains key production asset in the near
Slide 23: Energy Conversion Technology Status
For personal use only Energy Business Energy Conversion Technology Status • NHC continues to evaluate two small to medium scale Energy Conversion Technologies each having a very low carbon footprint and very low CO2 production, which is recycled OR sold commercially OR used in biofuels and food addi
Slide 24: Schematic Energy Conversion Processes
Schematic Energy Conversion Processes Gas to Liquids - CTL Direct Coal Liquefaction - DCL Coal Indirect Coal Liquefaction - ICL For personal use only Met Coke Waste to Energy - WTC Conversion Technology(s) Waste & DCL Avg. Mol. Weight Biomass Targeted Liquids Diesel WTE ICL Mid Scale Power Generatio
Slide 25: Indicative Energy Integration Scenarios
Indicative NHC Unconventional/Conventional Energy Integration Scenarios (Coal & Gas Conversion) 2 OF 3 Coal Seam Gas (CSG) Gas Sales Contracts Conventional Oil & Gas Coal or Lignite Upgrading Facilities WSC, PGS & DTE Power, LNG BE For personal use only Carbon to Liquids (CTL) Metallurgical Coke Gas
Slide 26: Carbon & Waste-to-Energy R&D Projects
Carbon & Waste‐to‐Energy R&D Projects Schematic Process Flow Chart – "POC" Plant Indirect Liquefaction GAS FUEL SOURCE Gas Fired Power Low Gas Energy Output • Natural Gas Generation Carbon & • Coal Seam Gas SOLID FUEL SOURCE Ash Waste • Underground Coal Gas For personal use only Coal Sludge Conversi
Slide 27: Carbon-to-Liquids R&D Projects
Carbon‐to‐Liquids R&D Projects Overview • Indirect Coal Liquefaction (ICL) – Manufacture a Proof of Concept (POC) Plant underway and on schedule. For personal use only – Jeebropilly site works design also underway. – Site construction April 2012, commissioning July 2012. • Direct Coal Liquefaction (
Slide 28: Energy Project Development Portfolio
Energy Project Development Portfolio 2011 – 2016 2 Assess waste to energy project Continue involvement in oil and gas opportunities evaluations • Waste to power generation with • Bridgeport Energy For personal use only green credentials • Westside Corporation Evaluate potential coal and gas • Planet
Slide 29: Bridgeport Energy Limited
Bridgeport Energy Limited Reserves Existing Assets For personal use only Production Statistics 20 September 2011 57 Dart Energy Limited 1 • Interest in 36 licences in 8 countries • Majority operating interest in 13 licences, 50% operating interest in a further 18 • 77.2 Tcf Gross GIP; 32.9 Tcf gross
Slide 30: Dart Energy Limited
Dart Energy Limited 2 • NHC equity level is approximately 17%. • Dart well placed to become a significant CSG – unconventional gas business. • Large resource base and well capitalised ($150 million). For personal use only • Dart moving into a significant project execution phase. – 109 well explorati
Slide 31: Westside Corporation Limited
Westside Corporation Limited • New Hope equity is 19.9% of Westside. • Good progression from explorer to producer. For personal use only – 7 dual lateral Meridian production wells completed; Recent Gas Production Well Head – Net annual gas sales $5.5 million; – Last quarter production up 7% on previ
Slide 32: NHC Business Strategy 2011 - 2016
For personal use only Future Outlook NHC Business Strategy 2011 ‐ 2016 • Looking to the next 5 years, our broad operational and commercial strategies do not alter, however the emphases are now well focused on the base coal business and the portfolio of coal development projects and less focused on a
Slide 33: Near Term Outlook
Near Term Outlook • Coal production over the 2012 – 2013 period likely to be steady at about 6 MPTA until the government approves the Acland thermal coal expansion and the Colton coking coal mine development. • Continued market volatility likely to be reflected in ongoing currency and coal For perso
Slide 34: JORC Declaration
JORC Declaration The estimates of coal resources herein have been prepared in accordance with the guidelines of the “Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Resources – The JORC Code”. These resources are inclusive of the reserves reported in the reserves st