Whitehaven Coal Limited Australia's Leading High Quality Coal Company

HALF YEAR RESULTS FY2017

17 FEBRUARY 2017

Disclosure

STATEMENTS 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

Agenda
  • Highlights

  • Safety

  • Financial Performance

  • Operations

  • Community

  • Outlook for Coal Use

  • Outlook for Whitehaven

  • Appendices

  • Additional Information

Highlights

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 Performance

SAFETY 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

Financial Performance Financial Highlights

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

Strong Profit Growth

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

Revenue and Margin Increasing

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

Balance Sheet

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

Capital Allocation

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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