Dalrymple Bay Infrastructure : 2021 Full Year Financial Results

For personal use only

Dalrymple Bay Infrastructure Managing Director and CEO, Anthony Timbrell said:

"The 2021 year was our first full year as a listed company and a year in which we made significant progress against the investment thesis we outlined in our listing prospectus.

The Dalrymple Bay Terminal remains a critical link in the global steel making supply chain and a key asset in the Queensland and Australian economies. During the year we shipped 54 Mt of coal, with the vast majority (81%) being metallurgical coal, to 25 countries. While the volume shipped was down on 2020, our long term take or pay contracts provide financial surety and allowed us to deliver a strong set of financial results for the year.

The QCA's approval of a light-handed regulatory regime, effective from 1 July 2021, allows DBI, like other Australian coal export terminals, to negotiate access charges directly with customers. We remain in negotiations with our customers and will update the market as appropriate.

Our focus on sustainability was outlined in our inaugural Sustainability Report. Our whole-of- terminal approach to sustainability reflects our commitment to our people, the environment and the community in which we operate. We commenced the development of an overarching transition strategy to prepare for the potential decarbonisation of the steel industry supply chain and identify opportunities for growth and diversification of DBI's business.

With strong and stable funds from operations (FFO) and an investment grade balance sheet, we were able to deliver a distribution of 18 cents per security for FY-21, representing an attractive yield of 8.9%1. Our FY-22 distribution guidance of 18.27 cents per security reflects a 1.5% increase, in line with our stated committed to delivering 1-2% pa distribution growth for the foreseeable future.

I would like to thank all of our securityholders for their continuing support and I look forward to updating you on the outcomes of our access charge negotiations."

Distribution and On-market Buyback

The Company has announced a 4Q-21 distribution of 4.5 cents per security, taking the total announced distributions for FY-21 to 18 cents per security representing a 79.3% payout of Funds from Operations. The 4Q- 21 distribution will have a record date of 4 March 2022 and a payment date of 23 March 2022.

DBI announces guidance for FY-22 distributions totaling 18.27 cents per security, representing a yield of 9.0%1. Furthermore, the FY-22 distribution guidance reflects a 1.5% increase in distributions, in-line with the Company's previous guidance of targeting distribution growth per security of 1-2% per annum.

On 26 February 2021, the Company announced to the ASX its intent to establish an on-marketbuy-back program which enabled the Company to buy back up to 10% of its issued securities during the year to 31 December 2021, should the Directors consider it advantageous to do so. The on-marketbuy-back commenced on 29 March 2021 and was closed on 31 December 2021. A total of 4,516,267 securities were acquired for a total of $10.025 million under the program. These securities have subsequently been cancelled. All buybacks were within the '10/12 limit' permitted by the Corporations Act 2001 (Cth) and therefore did not require securityholder approval2.

For personal use only

Operational Review

DBT is a predominantly metallurgical coal terminal that operates 24 hours a day. DBT exports more than 55 different grades of metallurgical coal to 25 countries. Key CY20213 operating highlightsfor DBT include:

• Total coal exports for CY2021 totalled 54.3mt of coal (55.0mt in CY2020).
• Coal exports during CY2021 were approximately 81% metallurgical coal and 19% thermal coal (82% metallurgical coal and 18 % thermal coal in CY2020).
• Key export destinations were Japan, South Korea, India, and Europe, accounting for approximately 75% of total exports (54% in CY2020).
• Exports to China continue to be impacted by the Chinese government restrictions on Australian coal imports.
• Two underground mines that ship through DBT suffered operational disruptions for large parts of 2021, impacting overall terminal throughput. One of the impacted mines resumed operations in July 2021 and the other resumed operations in February 2022.

Financial Review

During the reporting year, the Group made a net operating profit after income tax of $129,077,842 (31 December 2020: loss of $113,207,004).

1. CY2021 is calendar year 1 January 2021 - 31 December 2021. CY2020 is calendar year 1 January 2020 - 31 December 2020. The DBT Entities were acquired on 8 December 2020.
2. DBI was incorporated on 7 August 2020 and the DBI Group (comprising DBI and its wholly owned subsidiaries) was formed on 8 December 2020 following the Restructure (as that term is defined in the Prospectus) at which time DBI acquired Dalrymple Bay Infrastructure Management Pty Ltd (DBIM) and DBT Trust (which are the main entities conducting the business of DBI in respect of DBT as set out in the Prospectus).
3. "G&A Expenses" means general and administrative expenses and IPO Transaction Costs are detailed in note 30 to DBI's Financial Report for the year ended 31 December 2020 released to the ASX on 26 February2021 and described in the Prospectus (as released to the ASX on

1. December 2020) as "Transaction Costs".

1. Earnings Before Interest, Tax, Depreciation and Amortisation
2. Includes Interest expense and fair value adjustments on Stapled Loan Notes. This is net of interest received shown in the financial statements as other income.

For personal use only

When comparing statutory results for the year to 31 December 2021 to the comparative period 7 August

2020 to 31 December 2020:

• The comparative period consisted of 3 weeks of trading from the Initial Public Offering (IPO) on 8 December 2020 when DBI acquired the DBT Entities. The current period represents a full year from 1 January to 31 December 2021.
• A reversal of IPO Transaction Costs of $94 million was recorded during the year ended 31 December 2021 following finalisation of various items for which preliminary estimates were provided in the Prospectus at the time of listing.

Balance Sheet

Liquidity in the Group as at 31 December 2021 comprised $203.0 million in undrawn bank facilities (31 December 2020: $214.0 million), $42.0 million cash at bank (31 December 2020: $139.1 million) and $33.0 million in restricted cash (31 December 2020: $36.0 million).

The Group's debt book comprises bank debt and fixed and floating rate bonds, with a weighted average tenor at year end of 5.03 years8 (31 December 2020: 5.9 years). As at 31 December 2021, total reported borrowings were $2,046.6 million (excluding the loan notes attributable to securityholders and adding back capitalised borrowing costs of $5.5 million) and non-statutory drawn debt was $1,870.9 million9 (31 December 2020 reported borrowings: $2,039.5 million and non-statutory drawn debt: $1,859.9 million).

During May 2021, one of the Company's subsidiaries, DB Finance, entered into $1,450 million of interest rate swaps to fix the base rate of a proportion of its debt book. The average swap rate transacted was 1.173% lower than the average rate of the $1,600 million of interest rate swaps that expired in June 2021.

Currency exposure on the USD-denominated USPP notes is 100% hedged under cross currency interest rate swaps (CCIRS) transacted at the time of raising the USD debt. These CCIRS are hedged for the life of the foreign currency borrowings, removing sensitivity to foreign exchange movements for both interest and principal.

Notes:

1. USD borrowings expressed in AUD at the exchange rate per the cross-currency interest rate swaps transacted at the time of raising theUSD debt.
2. Total statutory borrowings exclude loan establishment costs of $5.5 million for 31 December 2021 (31 December 2020: nil).
3. Restricted cash is the debt service reserve account, which represents 6 months debt service.

1. DB Finance priced A$514m of USPP Notes on 2 November 2021 that are due to fund on 2 March 2022. These Notes will have a weighted average tenor of 11.95 years. As these Notes have not yet reached financial close, they are not included in the weighted average tenor at year end. Refer ASX release: Dalrymple Bay Infrastructure Prices A$514 million US Private Placement, 3 November 2021.
2. Non-statutorydebt uses the foreign currency exchange rate per the CCIR swaps to translate USD denominated debt to AUD.