HALF YEAR RESULTS FY2017
17 FEBRUARY 2017
DisclosureSTATEMENTS CONTAINED IN THIS MATERIAL, PARTICULARLY THOSE REGARDING THE POSSIBLE OR ASSUMED FUTURE PERFORMANCE, COSTS, DIVIDENDS, RETURNS, PRODUCTION LEVELS OR RATES, PRICES, RESERVES, POTENTIAL GROWTH OF WHITEHAVEN COAL LIMITED, INDUSTRY GROWTH OR OTHER TREND PROJECTIONS AND ANY ESTIMATED COMPANY EARNINGS ARE OR MAY BE FORWARD LOOKING STATEMENTS. SUCH STATEMENTS RELATE TO FUTURE EVENTS AND EXPECTATIONS AND AS SUCH INVOLVE KNOWN AND UNKNOWN RISKS AND UNCERTAINTIES. ACTUAL RESULTS, ACTIONS AND DEVELOPMENTS MAY DIFFER MATERIALLY FROM THOSE EXPRESSED OR IMPLIED BY THESE FORWARD LOOKING STATEMENTS DEPENDING ON A VARIETY OF FACTORS.
THE PRESENTATION OF CERTAIN FINANCIAL INFORMATION MAY NOT BE COMPLIANT WITH FINANCIAL CAPTIONS IN THE PRIMARY FINANCIAL STATEMENTS PREPARED UNDER IFRS. HOWEVER, THE COMPANY CONSIDERS THAT THE PRESENTATION OF SUCH INFORMATION IS APPROPRIATE TO INVESTORS AND NOT MISLEADING AS IT IS ABLE TO BE RECONCILED TO THE FINANCIAL ACCOUNTS WHICH ARE COMPLIANT WITH IFRS REQUIREMENTS.
ALL DOLLARS IN THE PRESENTATION ARE AUSTRALIAN DOLLARS UNLESS OTHERWISE NOTED.
COMPETENT PERSONS STATEMENT
INFORMATION IN THIS REPORT THAT RELATES TO COAL RESOURCES AND COAL RESERVES IS BASED ON AND ACCURATELY REFLECTS REPORTS PREPARED BY THE COMPETENT PERSON NAMED BESIDE THE RESPECTIVE INFORMATION. GREG JONES IS A PRINCIPAL CONSULTANT WITH JB MINING SERVICES. PHILLIP SIDES IS A SENIOR CONSULTANT WITH JB MINING SERVICES. BEN THOMPSON IS A GEOLOGIST WITH WHITEHAVEN COAL. JOHN ROGIS IS A GEOLOGIST WITH WHITEHAVEN COAL. RICK WALKER IS A GEOLOGIST WITH WHITEHAVEN COAL. GRAEME RIGG IS A FULL TIME EMPLOYEE OF RUNGEPINCOCKMINARCO LTD. DOUG SILLAR IS A FULL TIME EMPLOYEE OF RUNGEPINCOCKMINARCO LTD. SHAUN TAMPLIN IS A FULL TIME EMPLOYEE OF TAMPLIN RESOURCES PTY LTD. JAMES SMITH IS A SENIOR MINING ENGINEER WITH WHITEHAVEN COAL. MICHAEL BARKER IS A FULL TIME EMPLOYEE OF PALARIS LTD.
NAMED COMPETENT PERSONS CONSENT TO THE INCLUSION OF MATERIAL IN THE FORM AND CONTEXT IN WHICH IT APPEARS. ALL COMPETENT PERSONS NAMED ARE MEMBERS OF THE AUSTRALIAN INSTITUTE OF MINING AND METALLURGY AND/OR THE AUSTRALIAN INSTITUTE OF GEOSCIENTISTS AND HAVE THE RELEVANT EXPERIENCE IN RELATION TO THE MINERALISATION BEING REPORTED ON BY THEM TO QUALIFY AS COMPETENT PERSONS AS DEFINED IN THE AUSTRALIAN CODE FOR REPORTING OF EXPLORATION RESULTS, MINERAL RESOURCES AND ORE RESERVES (THE JORC CODE, 2012 EDITION).
ADDITIONAL INFORMATION
ANY REFERENCES TO RESERVE AND RESOURCE ESTIMATES SHOULD BE READ IN CONJUNCTION WITH THE WHITEHAVEN'S ORE RESERVES AND COAL RESOURCES STATEMENT FOR ITS COAL PROJECTS AT 31 MARCH 2016 AS RELEASED TO THE AUSTRALIAN SECURITIES EXCHANGE ON 15 AUGUST 2016. WHITEHAVEN CONFIRMS IN SUBSEQUENT PUBLIC REPORTS THAT IT IS NOT AWARE OF ANY NEW INFORMATION OR DATA THAT MATERIALLY EFFECTS THE INFORMATION INCLUDED IN THE RELEVANT MARKET ANNOUNCEMENT AND IN THE CASE OF ESTIMATES OF COAL RESOURCES OR ORE RESERVES, THAT ALL MATERIAL ASSUMPTIONS AND TECHNICAL PARAMETERS UNDERPINNING THE ESTIMATES IN THE RELEVANT MARKET ANNOUNCEMENT CONTINUE TO APPLY AND HAVE NOT MATERIALLY CHANGED.
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HALF YEAR RESULTS PRESENTATION FY2017
AgendaHighlights
Safety
Financial Performance
Operations
Community
Outlook for Coal Use
Outlook for Whitehaven
Appendices
Additional Information
STRONG PROFIT AND CASH FLOW FOR THE FIRST HALF
Safety (TRIFR 7.2) produce 7.7Mt of saleable coal up 9% on pcp Equity coal sales of 7.8Mt up by 6% Half year net profit of $157.5 million EBITDA of $324.8 million up 205% on pcp Net debt reduced to $628 million, gearing 17% Unit cost $56/t Safety Safety PerformanceSAFETY PROGRAMMES ARE DELIVERING IMPROVED OUTCOMES
Whitehaven Coal Group - TRIFR (12 Month Rolling
Average Recordable Injuries per million hours worked)
30
25
20
15
15.5
10
7.2
5
0
Jul-13
Jan-14 Jul-14
Jan-15
Jul-15
Jan-16
Jul-16
Whitehaven Coal TRIFR
NSW Coal TRIFR
Note: Data includes WHC employees and contractors at all mine sites, Gunnedah CHPP and Corporate office.
TRIFR refers to total recordable injury frequency rate.
Whitehaven recorded its lowest TRIFR of 7.2 at the end of December
The ongoing focus on Whitehaven's "Safehaven Rules" and behaviour based training have underpinned the improved safety outcome
Our commitment is to achieve zero harm to our people, our environment and our community
CAPTURING THE BENEFITS OF HIGHER COAL PRICES
Profit and loss | H1 FY2017 | H1 FY2016 | Comment |
Net profit after tax ($'m) | 157.5 | 7.8 | - 19% NPAT margin |
EBITDA ($'m) | 324.8 | 106.4 | - Up 205% on pcp |
Cash generated from operations ($'m) | 263.6 | 118.3 | - Up 123% on pcp |
Unit cost per tonne | 56 | 58 | - Down 3% on pcp |
Balance Sheet | Dec 2016 | June 2016 | |
Net debt ($'m) | 628 | 859 | - A significant reduction of $231m in H1 |
Gearing (%) | 17% | 23% | - Gearing improving quickly |
Leverage (Net Debt/EBITDA) | 1.4 | 3.8 | - Investment grade ratio |
HIGHER COAL PRICES FLOWING DIRECTLY TO PROFITS
Financial Performance - A$ millions | H1 FY2017 | H2 FY2016 | H1 FY2016 |
Revenue | 823.5 | 590.1 | 574.3 |
Other income | 5.8 | 4.4 | 4.0 |
Operating expenses | (271.4) | (250.7) | (264.7) |
Rail, Port, Marketing and Royalties (NSW Gov) | (219.9) | (212.4) | (190.1) |
Admin and other expenses (including net FX gain/loss) | (13.2) | (13.8) | (17.1) |
Operating EBITDA | 324.8 | 117.6 | 106.4 |
Gain on fixed asset disposals | - | - | 0.1 |
Depreciation & amortisation | (68.2) | (69.0) | (61.4) |
Net interest expense | (26.6) | (28.3) | (28.6) |
Other net financial expense | (4.0) | (4.4) | (4.7) |
Income tax expense | (68.5) | (3.2) | (4.0) |
Net profit after tax, before significant items | 157.5 | 12.7 | 7.8 |
Significant items after tax | - | - | - |
Net profit | 157.5 | 12.7 | 7.8 |
Earnings per share (cents per share - diluted) | 15.8 | 1.3 | 0.8 |
H1 FY2017 | H2 FY2016 | H1 FY2016 | ||
Coal Sales (equity basis, excl. purchased coal) | Mt | 7.8 | 8.1 | 7.3 |
Average revenue (excl. purchased coal & net of NSW royalties) | $A/t | 97 | 67 | 72 |
Average cost of sales | $A/t | 56 | 53 | 58 |
EBITDA Margin on Coal Sales | $A/t | 41 | 14 | 14 |
EBITDA Margin on Coal Sales | % | 42% | 21% | 19% |
The strong increase in revenue is reflected in the improved margin
Costs for the half year were in line with guidance provided earlier in the year
The strong rise in coal prices late in the September quarter drove the improved margin for the half
Average received thermal and metallurgical coal prices for the first half were US$78/t and US$90/t respectively and for the December quarter were US$92 and US$104 respectively
STRENGTHENING QUICKLY
31 Dec 2016 $'m | 30 June 2016 $'m |
- Net debt reduced by $231.1m
Cash on hand 106.8 101.5
Senior secured bank facility 655.0 835.0
ECA and finance leases 79.8 125.6
Total interest bearing liabilities 734.8 960.6
Net debt 628.0 859.1
Net assets 3,044.0 2,888.7
Gearing ratio 17% 23%
Leverage (LTM) 1.4 3.8
Further debt reduction remains a priority for the second half
Subsequent to the end of the financial period (31 December), a further $105 million of senior bank facility debt has been repaid
SUSTAINING CAPEX BEING MAINTAINED AND GROWTH CAPEX DECLINING
Capital Investment - $ Million | H1 FY2017 | H2 FY2016 | H1 FY2016 |
Mine Sustaining Capital | |||
Gunnedah Open Cuts sustaining | 1.0 | 3.4 | 0.5 |
Maules Creek | 6.0 | - | - |
Narrabri sustaining | 3.8 | 8.0 | 3.3 |
Total Sustaining Capital | 10.8 | 11.4 | 3.8 |
Expansion and Other Capital Investment | |||
Maules Creek | - | 5.0 | 9.7 |
Narrabri - Mains development | 2.1 | 11.2 | 8.2 |
Narrabri face widening | 17.0 | 15.7 | 7.7 |
Vickery Project | 3.1 | 2.9 | 1.6 |
Other (including land) | 2.3 | 2.5 | 1.7 |
Total Expansion and Other Capex | 24.6 | 37.3 | 28.9 |
Total Capital Investment | 35.3 | 48.7 | 32.7 |
Whitehaven continues to spend capital on sustaining the business for the longer term
Maules Creek project construction is complete
Narrabri 400 metre face widening project is nearing the end of the capex spend phase
Capex on Vickery is positioning the project for start-up when all approvals are achieved
Whitehaven Coal Limited published this content on 17 February 2017 and is solely responsible for the information contained herein.
Distributed by Public, unedited and unaltered, on 09 March 2017 15:45:14 UTC.
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