New Hope Corporation Limited · ASX:NHC
New Hope — H1 2016 Earnings Presentation
51 slides from New Hope's earnings presentation, Mar 22, 2016
Slide 1: Financial Results Release Half Year Ended 31 January 2016
INTEGRITY • RESPECT • ACCOUNTABILITY For personal use only SAFETY • RESILIENCE • SUCCESS Financial Results Release Half Year Ended 31 January 2016 Presented by Robert Millner & Shane Stephan 22 March 2016 newhopegroup.com.au
Slide 2: Overview
For personal use only Overview Robert Millner Chairman 22 March 2016 2
Slide 3: Executive Summary
Executive Summary For personal use only • Ongoing efforts to ensure Safe Production • Acquisition of 40% Bengalla – a premium quality asset, effective 1 March 2016 • Cash generated from operating activities of $38.9 million, EBITDA of $49.2 million • Profit before tax and before non-regular items to
Slide 4: Safety Performance
For personal use only Safety Performance Shane Stephan Managing Director 22 March 2016 4
Slide 5: Safety Performance
Safety Performance Principle of safe production For personal use only • 3 year Safety trend continues to improve • Deteriorating performance in Q1 for LTI’s and HPI’s compared to same period in 2015 • To arrest negative trends we have – Refocussed on i-Safe/We-Safe through refresher sessions – Held
Slide 6: Quarterly Total Recordable Injury Frequency Rate (TRIFR)
Safety Performance For personal use only Quarterly Total Recordable Injury Frequency Rate (TRIFR ) 35 30 25 20 15 10 5 0 TRIFR Linear (TRIFR) 22 March 2016 6
Slide 7: Financial Overview
For personal use only Financial Overview 22 March 2016 7
Slide 8: Financial Overview
Financial Overview 1st HY 2016 For personal use only 6 Months Ended 31 January (A$m) 2016 2015 Change % Revenue from ordinary activities 229.4 269.1 -15% Earnings before interest, tax, depreciation, amortisation and 49.2 75.7 -35% non regular items ^ Earnings before interest, tax and non regular ite
Slide 9: Financial Overview (per share)
Financial Overview HY 2016 For personal use only 6 Months Ended 31 January (cents per share) 2016 2015 Earnings per share before non regular items ^ 1.8 4.1 Earnings per share 0.3 (2.8) Interim dividend 2.0 4.0 ^ Refer to Appendix for reconciliation of non IFRS financial information 22 March 2016 9
Slide 10: Group NPAT Comparison
For personal use only NPAT $m 10 20 30 40 50 60 0 22 March 2016 HY 2015 NPAT 34.2 AUD:USD FX Rate 21.5 Mining Costs 2.7 Other 0.5 Group NPAT Comparison Port Throughput 2.6 Interest Revenue Before non-regular items half year comparison 3.0 2.4 Oil Price Coal Sales Volume 3.0 Coal Price 26.0 HY 2016 N
Slide 11: Group Cash Position
Group Cash Position Cash position including term deposits For personal use only NET CASH FY2015 to HY2016 1,200 17.0 38.9 1,100 1,065.3 49.9 Cash $'m 50.9 1,018.2 1,000 2.3 900 800 Capex Open cash (incl. TD) Op. Cash surplus Interest TD Closing Cash (incl TD) Dividends Tax & Other 22 March 2016 11
Slide 12: Significant Items
Significant Items Impact of non-regular items on first half 2016 financial year results For personal use only • The following events occurred during the period which are of a non-regular nature and have resulted in a net reduction to the groups after tax profit of $12.3 million, and a positive contr
Slide 13: Cost Management
For personal use only Cost Management 22 March 2016 13
Slide 14: Cost Management
Cost Management For personal use only • Innovation initiatives sustainably reduce costs • Wirtgen surface miner purchased for Acland replaces two dozers and a loader, with resultant productivity improvement • Reduced noise, vibration and potential for vehicle collision • Continuing to improve Wirtge
Slide 15: Cost Management: Operations maintaining cost competitiveness
Cost Management Operations maintaining cost competitiveness For personal use only • Costs of sales reduced by $7.4 million or Fuel Costs – First Half 14 5.2%, including Millions 12 – Fuel costs savings of $3.2m, equating to 33.3% 10 – Blasting costs savings of $1.5m, equating to 8 25.7% 6 4 • Market
Slide 16: Production and Sales
For personal use only Production and Sales 22 March 2016 16
Slide 17: Production and Sales Performance
Production and Sales Performance HY 2016 only Australian Operating Results 7,000 Production Sales use 6,000 Tonnes - 000's 5,000 For personal 4,000 3,000 2,000 1,000 - 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 HY 2016 Years ended 31 July 22 March 2016 17
Slide 18: Production and Sales Tonnages
Production and Sales Tonnages HY 2016 For personal use only 6 Months Ended 31 January (million tonnes) 2016 2015 Change % ROM coal processed 5.099 5.537 -7.9% Saleable coal production 2.529 2.871 -11.9% Coal sold * 2.694 3.073 -12.3% * Includes trade coal 22 March 2016 18
Slide 19: Coal Production Volumes
Coal Production Volumes HY 2016 For personal use only 6 Months Ended 31 January (million tonnes) 2016 2015 Change % New Acland 2.205 2.544 -13.3% Jeebropilly 0.324 0.327 -1.0% TOTAL 2.529 2.871 -11.9% 22 March 2016 19
Slide 20: Coal Sales Volumes
Coal Sales Volumes HY 2016 For personal use only 6 Months Ended 31 January (million tonnes) 2016 2015 Change % Export * 2.615 3.007 -13.0% Domestic 0.079 0.066 +19.7% TOTAL * 2.694 3.073 -12.3% * Includes trade coal 22 March 2016 20
Slide 21: Bengalla Operations
For personal use only Bengalla Operations 22 March 2016 21
Slide 22: Bengalla Operations
Bengalla Operations For personal use only 22 March 2016 22
Slide 23: Bengalla Operations Locality Map
Bengalla Operations Locality Map For personal use only 22 March 2016
Slide 24: Bengalla Operations Overview
Bengalla Operations Overview For personal use only • Joint Venture partners from 1st March 2016 – New Hope Group 40%, Wesfarmers Resources 40%, Mitsui Coal 10%, Taipower 10% • Open cut mine, using a dragline truck and excavator method • High quality thermal coal for export • ROM production in 2015 w
Slide 25: Community and Sustainability
For personal use only Community and Sustainability 22 March 2016 25
Slide 26: Our Vision and Values
OUR New Hope is a successful diversified mining and energy business. We are proud of our achievements and care about people and the environment. VISION We will deliver sustainable growth and enduring shareholder value through our people and quality assets. For personal use only INTEGRITY SAFETY We a
Slide 27: Community and Social Responsibility
Community and Social Responsibility Working together to maintain our social licence to operate For personal use only • We contribute around $600,000 pa to local community projects and not-for-profit groups through our Sponsorship Program and Community Investment Fund • Our Community Reference Group
Slide 28: Community Engagement
Community Engagement New Acland mine family support walk For personal use only • Over 800 New Acland employees and supporters turned out in force in Oakey on 15 March 2015 to show their support for the coal mine with a Family Support Walk through the town • Employees at the mine came up with the ide
Slide 29: New Acland Coal Mine Stage 3 Project Highlights
New Acland Coal Mine Stage 3 Project Highlights For personal use only • Continue the mine until approximately 2029, supporting approximately 435 operational jobs at peak, construction jobs of up to 260, plus thousands of indirect jobs • Potential expansion of the mine to 7.5 Mtpa product • Contribut
Slide 30: New Acland Coal Mine Project Timeline
New Acland Coal Mine Stage 3 Project Project timeline For personal use only Regulatory Approvals Engineering Stakeholders Nov ‘14 FEED Complete Board Approval Detail Design $47M Dec ‘14 CG Report / Conditional Approval EPBC Approval - Federal Gov’t Detail Design Feb ‘15 (now deferred) Enhanced Inter
Slide 31: Rehabilitation
Rehabilitation Land management For personal use only • New Hope is committed to the progressive rehabilitation of land across its operations • Rehabilitation is progressive and occurs right behind the mining activities • To date 405 Ha of land has been fully rehabilitated at Acland • Clear demonstra
Slide 32: West Moreton Landholdings
West Moreton Landholdings Approximately 2800 hectares For personal use only 140 ha 15 ha 900 ha Ipswich 1800 ha 32 ha 2km 22 March 2016 32
Slide 33: Thermal Coal Markets
For personal use only Thermal Coal Markets 22 March 2016 33
Slide 34: Seaborne Thermal Coal Demand
Seaborne Thermal Coal Demand For personal use only • China import demand declining, during 2015, 143Mt thermal coal, down 64 Mt from 2014 Seaborne Demand 2008-2035 by country – Majority of domestic mines are cash negative at current prices – High energy seaborne imports more economical than domestic
Slide 35: Seaborne Thermal Coal Supply
Seaborne Thermal Coal Supply For personal use only • Supply growth is moderating from Indonesia and Australia Seaborne Supply 2008 – 2035 by country – Indonesia • Announced 20GW of new coal fired generation capacity by 2020 requiring 70 Mtpa of domestic coal Australian thermal coal supply growth nea
Slide 36: Port Operations
For personal use only Port Operations 22 March 2016 36
Slide 37: Port Operations: Queensland Bulk Handling
Port Operations Queensland Bulk Handling For personal use only • QBH exported 3.5Mt for the half year period • QBH is a despatch port • QBH management and staff maintained the strong safety performance, this year delivering over 3 years Lost Time Injury (LTI) free • Strong focus on cost control thro
Slide 38: Oil and Gas
For personal use only Oil and Gas 22 March 2016 38
Slide 39: Oil and Gas: Bridgeport Energy
Oil and Gas Bridgeport Energy For personal use only 6 Months Ended 31 January (A$m) 2016 2015 Total revenue 4.700 6.867 Earnings before interest tax depreciation amortisation and (1.198) (561) non regular items Profit before tax (after non regular items) (18.226) (57.741) Less income tax benefit (ex
Slide 40: Oil and Gas Production and Revenue
Oil and Gas Production and revenue For personal use only Bridgeport Energy Group Production and Revenue 50,000 3,500 45,000 3,000 40,000 35,000 2,500 Revenue (A$'000) Production (bbls) 30,000 2,000 25,000 1,500 20,000 15,000 1,000 10,000 500 5,000 - - Apr 15 Qtr Jul 15 Qtr Oct 15 Qtr Jan 16 Qtr Prod
Slide 41: Oil and Gas Key Progress 1H 2016
Oil and Gas Key progress 1H 2016 For personal use only • Completed acquisition of producing Moonie Oil field in the Surat Basin from Santos in Dec 2015 • Production enhancement works completed at Inland, Utopia and Cuisinier fields • 3D Seismic programme completed at PEL 630, ATP 794 and ATP 805 • A
Slide 42: Oil and Gas Cost Focus
Oil and Gas Cost focus For personal use only Given the low oil price environment, Bridgeport has continued to focused on significant costs saving initiatives. These include: • Progressing to ‘not normally manned’ (NNM) operations at Utopia field • Modification of production facilities at Inland (ins
Slide 43: Outlook
For personal use only Outlook 22 March 2016 43
Slide 44: Outlook and Focus
Outlook and Focus New Hope has a long term strategy For personal use only • Market View – Markets are changing with European demand declining however high quality thermal coal will remain in demand in Asia for many decades to come – there remains no economically sustainable substitute for coal in As
Slide 45: Appendix
For personal use only Appendix 22 March 2016 45
Slide 46: Reconciliation of non IFRS Financial Information
Reconciliation of non IFRS Financial Information For personal use only 6 Months Ended 31 January (A$m) 2016 2015 New profit / (loss) after tax 2.7 (23.1) Income tax (expense) / benefit 0.8 2.5 Petroleum resource rent tax (expense) / benefit (4.8) 0.8 Profit before income tax 6.7 (26.4) Non regular i
Slide 47: Reconciliation of Net Profit after Tax 2016
Reconciliation of Net Profit after Tax before and after non Regular Items For personal use only 6 Months Ended 31 January (A$m) Coal Mining Oil & Gas Marketing Treasury & TOTAL & Logistics Investment 2016 Net profit / (loss) after tax 0.039 (15.988) 11.129 7.543 2.723 Non regular items after tax Imp
Slide 48: Reconciliation of Net Profit after Tax 2015
Reconciliation of Net Profit after Tax before and after non Regular Items For personal use only 6 Months Ended 31 January (A$m) Coal Mining Oil & Gas Marketing Treasury & TOTAL & Logistics Investment 2015 Net profit / (loss) after tax 3.524 (41.079) 15.569 (1.153) (23.139) Non regular items after ta
Slide 49: Reconciliation of non IFRS Financial Information (EPS)
Reconciliation of non IFRS Financial Information For personal use only 6 Months Ended 31 January 2016 2015 Basic earnings per share (cents) (before non regular items) 1.8 4.1 Land access compensation 0.6 - Disposal of Dart Energy Limited shares - 0.1 Impairment of oil producing and exploration asset
Slide 50: Disclaimer
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 information in this documen
Slide 51: For personal use only
For personal use only INTEGRITY • RESPECT • ACCOUNTABILITY SAFETY • RESILIENCE • SUCCESS newhopegroup.com.au