New Hope Corporation Limited · ASX:NHC
New Hope — FY2010 Earnings Presentation
63 slides from New Hope's earnings presentation, Sep 21, 2010
Slide 1: Analysts Briefing Year Ended 31 July 2010
For personal use only Analysts Briefing Year Ended 31 July 2010 21 September 2010 Presented by: Rob Neale, Managing Director & Chief Executive Officer
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: 2010 Result Summary
2010 Result Summary For personal use only New Hope’s Operations NPAT of $183.8 million is within guidance range of $175 million to $185 million. Operations NPAT of 112.6 million was down from $150.5 million last year due to: – Lower export coal prices; – Higher A$:US$ exchange rate; – Higher transpo
Slide 4: Key Financials
Key Financials For personal use only 12 months ended 31 July 2010 2009 Change Total revenue $745.0m $700.8m + 6.3% Profit from operations $183.8m $262.3m - 29.9% (including interest revenue) Net profit after non-recurring $183.8m $1,950.4m - 90.6% items Earnings per share excluding 22.3 32.3 - 30.9%
Slide 5: Group NPAT Comparison
Group NPAT Comparison (excluding non-recurring items) For personal use only 81.1 78.1 300 262.3 40.6 20.8 20.0 200 183.8 100 A$m 0 2009 Export sales Export price Interest Other Transport 2010 volume income costs 21 September 2010 5
Slide 6: Dividends
Dividends For personal use only 2010 2009 Change cents per share cents per share Interim dividend 5.00 4.75 + 5.3% Final dividend * 4.50 4.50 - Special dividend * 14.00 72.75 - 80.8% Total Dividends for the year 23.5 82.00 - 71.3% * The final and special dividend for 2010 is due for payment on 9 Nov
Slide 7: Production Volumes
Production Volumes For personal use only 12 months ended 31 July (Million tonnes) 2010 2009 Change New Acland 4.70 4.26 + 10.3% New Oakleigh 0.29 0.45 - 36.6% Jeebropilly 0.93 0.43 +119.6% (mine re-opened August 2008) TOTAL 5.91 5.14 +15.2% 21 September 2010 7
Slide 8: Sales Volumes
Sales Volumes For personal use only 12 months ended 31 July (Million tonnes) 2010 2009 Change Export 4.88 3.87 + 26.2% Domestic 1.0 1.10 - 9.7% TOTAL 5.88 4.97 + 18.3% 21 September 2010 8
Slide 9: Production, Sales & Financial Performance
Production, Sales & Financial Performance For personal use only Australian Operating Results 7,000 160,000 Production (LHS) Sales (LHS) NPAT (RHS) 6,000 140,000 Tonnes - 000's 120,000 5,000 A$000's 100,000 4,000 80,000 3,000 60,000 2,000 40,000 1,000 20,000 - - 2002 2003 2004 2005 2006 2007 2008 200
Slide 10: Acland Expansion to 4.8 MTPY - North Pit
Acland Expansion to 4.8 MTPY 1 North Pit For personal use only Expansion completed under budget and slightly ahead of schedule. – Wetalla Pipeline; – Wash plant upgrade; – New equipment for mine expansion and development of south pit. 21 September 2010 10
Slide 11: Acland Expansion to 4.8 MTPY - South Pit
Acland Expansion to 4.8 MTPY 2 South Pit For personal use only Wash plant #2 crusher upgrade success is being planned for the original wash plant. Jondaryan Super Rail loop being planned to expedite additional export capacity. EIS supporting the additional mining lease to allow New Acland to expand
Slide 12: Jondaryan Super Rail Loop
Jondaryan Super Rail Loop 1 For personal use only LEGEND Existing Rail 21 September 2010 Proposed Super Rail Loop 12
Slide 13: Jondaryan Super Rail Loop
Jondaryan Super Rail Loop 2 For personal use only Decrease train cycle times to move more coal to the port with the same number of trains. Two additional train sets can be held on the super loop while one train is being loaded on the Jondaryan Siding. – Improved annual capacity by 500,000 to 900,000
Slide 14: Mine Rehabilitation and the Environment
Mine Rehabilitation and the Environment For personal use only Rehabilitation closely follows mining operations. NHC manages multiple land uses: – Mining – Cattle – Farming 21 September 2010 14
Slide 15: Operations Improvements
Operations Improvements 1 For personal use only Payloads increased by up to 20 tonnes $8.5m pa cost saving New Hope specific bodies – 21 new light weight, high strength, 21 September large 2010 bodies, but remain within manufacturer’s limits 15
Slide 16: Operations Improvements
Operations Improvements 2 For personal use only Implemented world class maintenance strategy, increasing availability to 93% Value add - $5m pa 21 September 2010 16
Slide 17: Operations Improvements
Operations Improvements 3 For personal use only World Class Coal Preparation plant performance: 7848 Run hours at 107% of design feed rate, via continuous improvements 21 September 2010 17
Slide 18: Operations Improvements
Operations Improvements 4 For personal use only Installed mobile in-pit ‘crib’ rooms, Refuel excavators at shift change, Progressing work-through-crib activities. Value add - $4.4m pa 21 September 2010 18
Slide 19: West Moreton Mines Update
West Moreton Mines Update For personal use only Jeebropilly Successfully expanded recommissioned mine to 900 KTPY. – Higher yields and lower strip ratios Sufficient wash plant capacity. Possible mine life of 5 – 7 years at current prices and costs. New Oakleigh Previously scheduled for 1Q 2009 closu
Slide 20: West Moreton Master Planning
West Moreton Master Planning For personal use only Transition from mining to valued land use West Moreton Land Holding – 2900ha. Active Mining Conceptual development plans completed and recognised with 3 awards for Urban Design & Industrial Planning. Traditional Mine Rehabilitation Structure Plan fo
Slide 21: QBH Port Facility Overview
QBH Port Facility Overview For personal use only Coal exports have grown by 57% over the past five years. Higher rail volumes and ship movements. Remains essentially demurrage free coal terminal. Site management improving effectiveness. – New user group formed for efficiency improvements. Expansion
Slide 22: QBH Port Facility Exports Throughput
QBH Port Facility Exports Throughput (Million Tonnes) For personal use only 12 months ended 31 July 2006 2007 2008 2009 2010 Exports (MT) 4.16 4.53 5.47 6.12 6.67 TOTAL GROWTH 12% 9% 21% 12% 9% NHC Growth 17% 6% 24% 20% 26% 21 September 2010 22
Slide 23: QBH Port Facility Expansion Project
QBH Port Facility Expansion Project 1 For personal use only p a ns i on Area Ex 21 September 2009 22 2010 23
Slide 24: QBH Port Expansion Site Preparation
QBH Port Facility Expansion Project 2 For personal use only Site Preparation First Stage with construction of light weight stacker and 4 reclaim systems underway 21 September 2010 24
Slide 25: QBH Expansion Project - Down Stream View
QBH Port Facility Expansion Project – Down Stream View 3 For personal use only General Cargo Wharf Coal Shiploader Inload System New stockpile areas in use. Stacker complete. Second phase of reclaim systems under construction. Reclaim armour faced conveyor 21 September 2010 25
Slide 26: QBH Expansion Project - Up Stream View
QBH Port Facility Expansion Project – Up Stream View 4 For personal use only Coal Reclaimer Outload Belts Inload Belt 21 September 2010 26
Slide 27: Proximity to SE Qld Coal Resources
Proximity to SE Qld Coal Resources Locality Map Kingaroy For personal use only Chinchilla Kogan Creek Kogan Creek Tarong Wilkie Creek Dalby Acland QBH Export Fisherman Islands Open Cut Coal Mine Coal Terminal Coal Terminal Oakey BRISBANE Coal Deposit Power Station Toowoomba Oakleigh Ipswich Ipswich
Slide 28: Central Queensland Overview
Central Queensland Overview Exploration Projects and Existing Mines For personal use only NEW LENTON PROJECT 21 September 2010 28
Slide 29: New Lenton Project Location & Infrastructure
New Lenton Project Location & Infrastructure For personal use only Northern Missing Rail Link Rail Link to Dalrymple Bay 21 September 2010 29
Slide 30: New Lenton Project Initial Exploration
New Lenton Project Initial Exploration For personal use only ` 21 September 2010 30
Slide 31: New Lenton Project Seismic Line 2009-03
New Lenton Project Seismic Line 2009-03 For personal use only 115m 230m 345m 460m 575m 690m 805m 0 1 2 3 4 5 6 Kilometres Line 2009-03 interpreted section showing the mapped roof of the Burton Rider and Leichhardt Seams. Rider Seam = yellow horizon; Leichhardt Seam = blue horizon. Also displayed are
Slide 32: New Lenton Project Seismic Line 2009-02
New Lenton Project Seismic Line 2009-02 For personal use only 115m 230m 345m 460m 575m 690m 805m 0 1 2 3 4 5 6 7 Kilometres Line 2009-02 interpreted section showing the mapped roof of the Burton Rider and Leichhardt Seams. Rider Seam = yellow horizon; Leichhardt Seam = blue horizon. Also displayed a
Slide 33: New Lenton Depth-To-Seam Contours
New Lenton Project Depth-To-Seam Contours Depth to the Leichhardt For personal use only Seam (50m contour intervals) Colour Shade Legend Grey = 0-150m Orange = 150-250m Green = 250-400m Aqua = 400-550m Purple = >550m EPC1675 21 September 2010 33
Slide 34: New Lenton Resource Definition Summary
New Lenton Project Resource Definition Summary For personal use only Drilling, seismic evaluation and coal quality analysis continuing – Total drill holes 298 (Oct 2002 – August 2010) – 38,604 metres total drilled – Coal quality analysis confirms a range of metallurgical and thermal coal products Re
Slide 35: New Lenton 3D Seismic Stages
New Lenton Project 3D Seismic Stages 1 - 4 For personal use only Stage 4 Stage 2 Stage 1 Stage 3 21 September 2010 35
Slide 36: New Lenton Seam Stratigraphy and Coking Coal Quality
New Lenton Project Seam Stratigraphy and Indicative Coking Coal Quality For personal use only Ash Phosphorus Vitrinite WM % CSN TS % Fluidity Dilatation CSR (adb) % % % Burton Rider 7.2 - 10 28 - 30 7 - 8.5 0.31 - 0.47 0.004 - 0.073 51 - 69 250 - 1000 55 35 - 45 Leichardt Burton Rider 6.8 29 8 - 9.0
Slide 37: Downs Project
Downs Project For personal use only Jimbour Willeroo Jondaryan Mt Russell Wellcamp Pittsworth Pittsworth West East Bringalily 21 September 2010 37
Slide 38: Coal-to-Liquids Conversion Technologies
Coal-to-Liquids Project NHC Coal Conversion Technologies For personal use only Coal Conversion Technologies which produce transport hydrocarbon fuels, fall into 2 general categories: 1. Direct Liquefaction (coal-liquids-solids) 2. Indirect Liquefaction (coal-gas-liquids-solids) NHC has identified a
Slide 39: CTL Background Information
Coal-to-Liquids Project NHC CTL Background Information For personal use only NHC initiated research in 2005 on CTL technologies as an alternative growth avenue in the face of a constrained rail system limiting Acland Mine export growth. NHC conducted gasification evaluations of Acland coal. NHC CTL
Slide 40: Why Consider a Niche Focused CTL Business?
Coal-to-Liquids Project Why Consider a Niche Focused CTL Business? For personal use only Benefits Upgrade low value resources and/or waste products to premium petroleum products and mitigate crude oil imports. Overcome QR rail constraints to Acland and Surat Basin export coal growth. Fuel cost reduc
Slide 41: Schematic Process Flow Chart - Carbonisation Plant
Coal-to-Liquids Project Schematic Process Flow Chart – Carbonisation Plant For personal use only GAS FUEL SOURCE • Natural Gas Solid Carbon / Ash • Coal Seam Gas Waste • Underground Coal Gas SOLID FUEL SOURCE Coal Sludge Conversion Gas Conversion Gas Woodchip Gasifer Clean up Sulphur Wash Sugar cane
Slide 42: Objectives of TPH Carbonisation and Slurry Reactor Plant
Coal-to-Liquids Project Objectives of 1 TPH Carbonisation and Slurry Reactor Plant For personal use only 1 TPH Slurry Reactor Plant Establish stable coal conversion processes and operating protocols. Demonstrate system stability performance e.g. heat balance, energy balance, mass balance, gas balanc
Slide 43: Possible 1TPH Concept Plant Test Site
Coal-to-Liquids Carbonisation Project Possible 1TPH Concept Plant Test Site (Not to Scale and Subject to Change) Security Fence For personal use only CTL Site Access Fuel Feed Load Environmental Station Possible Third Party Management Gas Feed Bulk Feed Stock Storage From Mine Liquids Plant Gasifier
Slide 44: 0.5 TPH Carbonisation Unit
Coal-to-Liquids Project 0.5 TPH Carbonisation Unit For personal use only 21 September 2010 44
Slide 45: 0.5 TPH Carbonisation Unit with Gas Clean Up Units
Coal-to-Liquids Project 0.5 THP Carbonisation Unit with First Stage Gas Clean Up Units For personal use only 21 September 2010 45
Slide 46: Gasifier - Kg Per Hour
Coal-to-Liquids Project Gasifier - 25 Kg Per Hour For personal use only 21 September 2010 46
Slide 47: Liquefaction Module
Coal-to-Liquids Project Liquefaction Module For personal use only 21 September 2010 47
Slide 48: NHC Indirect Technology Advantages
Coal-to-Liquids Project NHC Indirect Technology Advantages For personal use only No Significant Environmental Risks: – Unlikely toxic or odorous gaseous discharges, some small volume of carbon dioxide produced from heating source to begin the process; – Minimal machinery noise, no toxic waste, water
Slide 49: Quantex Agreement Overview
Coal-to-Liquids Project Quantex Agreement Overview For personal use only This is a direct liquefaction process. Agreement to acquire 25% equity interest in exclusive world wide licensed technology. Right to acquire up to 51% at agreed prices. Targeting conversion of thermal coal to synthetic crude o
Slide 50: NHC - Quantex Direct Coal Liquefaction
Coal-to-Liquids Project NHC – Quantex Direct Coal Liquefaction For personal use only NHC-QUANTEX TECHNOLOGY Potable Diluent Water? Coal Coal Coal Process Centrate Supply Preparation Digestion Centrifuge Ash Mine Disposal Waste Synthetic Distillation Liquids Delayed Coker Hydro Treater Liquids Pitch
Slide 51: NHC - Quantex Technology Development
Coal-to-Liquids Project NHC – Quantex Technology Development For personal use only Technology Scale Up – Small lab scale <500 ml – Large bench test scale 40 litres/hour – Proof of Concept test unit 1200 litres/hour (2012) – Pilot Plant unit 700-1000 bbls/day (2014) • Possible fast track option • Tim
Slide 52: Pitch from Acland Coal
Coal-to-Liquids Project Pitch from Acland Coal For personal use only 21 September 2010 52
Slide 53: Synthetic Crude Oil from Acland Coal
Coal-to-Liquids Project Synthetic Crude Oil from Acland Coal For personal use only 21 September 2010 53
Slide 54: Synthetic Metallurgical Grade Coke from Acland Coal
Coal-to-Liquids Project Synthetic Metallurgical Grade Coke from Acland Coal For personal use only Upgrading of pitch via a delayed coker process produces a synthetic crude oil with a high grade synthetic metallurgical coke as a by-product. Synthetic Coke Specific grades of pitch can also be upgraded
Slide 55: Technology Status
Coal-to-Liquids Project Technology Status For personal use only Production of Anode and Needle Coke – proven. Large bench scale of: – Pitch (completed) – Synthetic Crude Oil (completed) – Synthetic Metallurgical Coke (completed) Scale up issues remain greatest unknown and highest risk. – Test via Pr
Slide 56: Synthetic Metallurgical Coke Properties
Coal-to-Liquids Project Synthetic Metallurgical Coke Properties For personal use only Australian Mine Synthetic PCI Coke Synthetic Met PCI Coal (via CTL) * Coke * (via CTL) Moisture 9.0% 0.5% Proximate Analyses Volatile Matter 13.0% 9.0% 0.4% Ash 9.0% 7.87% 8.0% Fixed Carbon 77% 83% 92% Sulphur 0.5%
Slide 57: NHC - Quantex R&D Programme
Coal-to-Liquids Project NHC – Quantex R&D Programme For personal use only Large bench scale unit will continue to test a range of coal types. Operating conditions will be optimised for specific product requirements for proposed coal types (maximise conversion) Fuel and coke marketing support activit
Slide 58: Arrow Energy Limited Equities Holding
Arrow Energy Limited Equities Holding For personal use only As at 31 July 2010 Shareholding 16.7% Adjusted cost of shares * $110.0 M Market value ** $576.2 M Unrealised profit before tax $466.2 M * Adjusted cost base after the allocation of a value to the Dart Energy shares on implementation of the
Slide 59: Dart Energy Limited Equities Holding
Dart Energy Limited Equities Holding For personal use only As at 16 September 2010 Shareholding 17.0% Cost of shares * $16.2 M Market value $71.3 M Unrealised profit before tax $55.1 M * Cost base comprised of: – Allocation of cost base on demerger from Arrow Energy – Participation in Capital Raisin
Slide 60: Planet Gas Limited Equities Holding
Planet Gas Limited Equities Holding For personal use only Total NHC cost for 19.9% of PGL approx $8.8 million. PGL will use funds to accelerate Australian east coast projects as well as projects in Southern USA. The NHC equity in PGL continues a measured path of greater involvement in the broad Aust
Slide 61: Westside Corporation Limited Equities Holding
Westside Corporation Limited Equities Holding For personal use only Acquired 19.9% stake for a cost of $23.3 million. ASX listed entity with interests in: – Bowen basin; – Galilee basin; – Dawson CSG fields (ex Anglo). Westside is in transition from an explorer to a producer. 21 September 2010 61
Slide 62: New Hope Outlook for 2011
New Hope Outlook for 2011 For personal use only Production and sales are likely to be in the vicinity of 6 million tonnes. Annual contract thermal coal prices in US$ terms are likely to remain steady. – Some volatility in indexed and spot prices. Key NPAT drivers for 2011 will be: – US$ coal prices
Slide 63: An Independent Energy Alternative
For personal use only “An Independent Energy Alternative” People are Important Margin Management makes us Competitive Continuous Improvement makes us Effective Growth is an Imperative