results for the six months ended 30 september 2014 interims final... · 2016-11-25 · results for...
TRANSCRIPT
RESULTS FOR THE SIX MONTHS ENDED 30 SEPTEMBER 2014
Wednesday, 19 November 2014
1
CHIEF EXECUTIVE OFFICER MANDI GLAD
www.keatonenergy.co.za
RESULTS FOR THE SIX MONTHS ENDED 30 SEPTEMBER 2014
AGENDA
HIGHLIGHTS Mandi Glad
FINANCIAL PERFORMANCE Jacques Rossouw
KEATON AS A VALUE PROPOSITION Mandi Glad
www.keatonenergy.co.za
RESULTS FOR THE SIX MONTHS ENDED 30 SEPTEMBER 2014
HIGHLIGHTS 4
Improved safety performance at both Vanggatfontein and Vaalkrantz
Total sales up 7% to 1.45Mt
Revenue up 10% to
R783 million
HEPS of 13.7 cents per share down from 19.4 cents due to increased number of shares in issue and increased finance costs
Gross profit up 6% to
R124.5 million Cash generated from operations
up 54% to R315.6 million Cash and cash equivalents up 63% to R113.2 million
Net debt to equity % decreased from 35% to 29%
www.keatonenergy.co.za
RESULTS FOR THE SIX MONTHS ENDED 30 SEPTEMBER 2014
SAFETY | Fatality free since inception
VANGGATFONTEIN LTIFR VAALKRANTZ LTIFR
5
* LTIFR per 200 000 man hours
0.20
0.00
0.10 0.09
0.04
1HFY13 2HFY13 1HFY14 2HFY14 1HFY15
0.45
0.36
0.17
0.23
0.12
1HFY13 2HFY13 1HFY14 2HFY14 1HFY15
* LTIFR per 200 000 man hours
www.keatonenergy.co.za
RESULTS FOR THE SIX MONTHS ENDED 30 SEPTEMBER 2014
OPERATIONS
VANGGATFONTEIN VAALKRANTZ
6
1HFY14 2HFY14 1HFY15
Sales (Mt) 1.20 1.09 1.26
ROM (Mt) 1.73 1.67 1.99
Revenue (Rm) 585 542 638
EBITDA (Rm) 269 276 346
Capex (Rm) 135 159 230
LOM (years) 17+ 17+ 20+
No. of employees* 486 519 484
1HFY14 2HFY14 1HFY15
Sales (Mt) 0.15 0.15 0.19
ROM (Mt) 0.23 0.20 0.19
Revenue (Rm) 125 120 145
EBITDA (Rm) 9 (7) 11
Capex (Rm) 2 2 9
LOM (years) 2 4+ 4+
No. of employees* 808 713 813
* Includes contractors
JACQUES ROSSOUW
7
CHIEF FINANCIAL OFFICER
www.keatonenergy.co.za
RESULTS FOR THE SIX MONTHS ENDED 30 SEPTEMBER 2014
8
EXTRACTS FROM THE STATEMENT OF PROFIT OR LOSS (Rm) 1HFY15 1HFY14 % CHANGE FY14
Revenue 783.0 709.8 10% 1 372.6
Cost of Sales (658.5) (592.6) 11% (1 153.9)
Cash cost (433.5) (422.9) 3% (802.4)
Depreciation (233.8) (172.6) 35% (348.1)
Inventory movement 8.8 2.9 203% (3.4)
Gross profit 124.5 117.2 6% 218.7
Other Income 18.6 9.2 102% 13.0
Mining and related expenses (24.5) (10.6) 131% (11.5)
Operating profit before net finance cost 82.5 84.6 (2%) 150.1
Finance cost (28.1) (21.7) 29% (50.6)
Net profit after taxation 35.3 42.3 (17%) 64.4
HEPS (cents per share) 13.7 19.4 (29%) 30.3
FINANCIAL PERFORMANCE
From operational results
www.keatonenergy.co.za
RESULTS FOR THE SIX MONTHS ENDED 30 SEPTEMBER 2014
9
COST OF SALES ANALYSIS (Rm) 1HFY15 1HFY14
Mining Contractors 352.1 273.1
Amortisation and depreciation 233.8 172.6
Transport costs 156.3 153.7
Fuel 82.9 63.1
Other direct mining costs 67.6 67.7
Inventory movement (8.8) (2.9)
Deferred stripping capitalised (225.4) (134.7)
658.5 592.6
FINANCIAL PERFORMANCE
* From operational results
www.keatonenergy.co.za
RESULTS FOR THE SIX MONTHS ENDED 30 SEPTEMBER 2014
10
FINANCIAL PERFORMANCE
» GROSS PROFIT (%)
-10%
-5%
0%
5%
10%
15%
20%
-200
-100
0
100
200
300
400
500
600
700
800
1HFY13 2HFY13 1HFY14 2HFY14 1HFY15
Rev
en
ue
(R
m)
(9%)
2%
16% 17%
15%
GP
%
20%
0%
15%
10%
5%
www.keatonenergy.co.za
RESULTS FOR THE SIX MONTHS ENDED 30 SEPTEMBER 2014
11
FINANCIAL PERFORMANCE
» EBITDA (%)
0%
5%
10%
15%
20%
25%
30%
35%
40%
45%
0
100
200
300
400
500
600
700
800
1HFY13 2HFY13 1HFY14 2HFY14 1HFY15
12%
9%
40% 38%
36%
Rev
en
ue
(R
m)
EBIT
DA
%
www.keatonenergy.co.za
RESULTS FOR THE SIX MONTHS ENDED 30 SEPTEMBER 2014
12
FINANCIAL PERFORMANCE
» HEADLINE EARNINGS PER SHARE
-25
-20
-15
-10
-5
0
5
10
15
20
25
1HFY13 1HFY14 1HFY15
Ce
nts
pe
r sh
are
(21.1)
19.4
13.7
www.keatonenergy.co.za
RESULTS FOR THE SIX MONTHS ENDED 30 SEPTEMBER 2014
13
FINANCIAL PERFORMANCE
NORMALISED EARNINGS CENTS PER SHARE
HEPS 13.7
Higher number of shares in issue 2.3
Increased finance costs 2.8
Normalised earnings per share 18.8
www.keatonenergy.co.za
RESULTS FOR THE SIX MONTHS ENDED 30 SEPTEMBER 2014
-
100
200
300
400
500
600
700
14
FINANCIAL PERFORMANCE
» GROUP NET DEBT MOVEMENT (Rm)
Net debt 1 Apr 2014
Capital and other
additions
Finance cost and
forex losses Tax paid
Net cash from
operations
Dividends paid
Prepayment for coal offtake
Net debt 30 Sept
2014
Other net investing activities
324
275
16
2 318
8 7
43
271
www.keatonenergy.co.za
RESULTS FOR THE SIX MONTHS ENDED 30 SEPTEMBER 2014
15
FINANCIAL PERFORMANCE
» CASH GENERATED BY OPERATIONS (Rm)
63
129
205
212
316
0
50
100
150
200
250
300
350
1HFY13 2HFY13 1HFY14 2HFY14 1HFY15
www.keatonenergy.co.za
RESULTS FOR THE SIX MONTHS ENDED 30 SEPTEMBER 2014
16
FINANCIAL PERFORMANCE
» CASH AND CASH EQUIVALENTS (Rm)
0
20
40
60
80
100
120
FY13 FY14 1HFY15
69.6
113.2
19.6
www.keatonenergy.co.za
RESULTS FOR THE SIX MONTHS ENDED 30 SEPTEMBER 2014
17
FINANCIAL PERFORMANCE
» RETURN ON EQUITY (%)
1HFY13 2HFY13 1HFY14 2HFY14 1HFY15
(5%)
5%
3%
(3%)
2%
www.keatonenergy.co.za
RESULTS FOR THE SIX MONTHS ENDED 30 SEPTEMBER 2014
18
FINANCIAL PERFORMANCE
» NET DEBT TO EQUITY (%)
FY13 FY14 1HFY15
39%
35%
29%
KEATON AS A VALUE PROPOSITION
www.keatonenergy.co.za
RESULTS FOR THE SIX MONTHS ENDED 30 SEPTEMBER 2014
20
LOCATION | Operations and projects
Moabsvelden
Vanggatfontein Colliery
Vaalkrantz Colliery
Sterkfontein Project
Braakfontein Project Koudelager Project
Balgray Project
www.keatonenergy.co.za
RESULTS FOR THE SIX MONTHS ENDED 30 SEPTEMBER 2014
21
SUBSTANTIAL | Group resources and reserves
COAL RESOURCE (MTIS) (AD) ROM COAL RESERVE (Mt) (AR)
PROJECT INFERRED INDICATED MEASURED TOTAL COAL RESOURCE
PROBABLE PROVED TOTAL ROM
COAL RESERVE
Vanggatfontein Colliery - 62.6 83.1 145.7 6.0 51.3 57.3
Moabsvelden Project - 2.0 53.5 55.5 1.2 41.4 42.6
Bankfontein Project 11.0 5.1 - 16.1 - - -
Roodepoort Project 5.3 12.2 8.9 26.4 - - -
Sterkfontein Project 40.6 50.2 - 90.8 23.6 - 23.6
Vaalkrantz Colliery - 15.1 - 15.1 2.5 0.2 2.7
Braakfontein Project - 64.9 - 64.9 24.9 - 24.9
Koudelager Project 0.9 11.4 - 12.3 - - -
TOTAL 57.8 223.5 145.5 426.8 58.2 92.9 151.1
www.keatonenergy.co.za
RESULTS FOR THE SIX MONTHS ENDED 30 SEPTEMBER 2014
SUSTAINABLE | Growth profile 22
2012 2013 2014 2015 2016 2017 2018
Mtpa saleable
2019 2020
6.0
5.5
5.0
4.5
4.0
3.5
3.0
2.5
2.0
1.5
1.0
0.5
0
» Vanggatfontein Colliery
» Vaalkrantz Colliery
» Moabsvelden remote pit
» Braakfontein Colliery
www.keatonenergy.co.za
RESULTS FOR THE SIX MONTHS ENDED 30 SEPTEMBER 2014
PROJECTS
MOABSVELDEN BRAAKFONTEIN
23
» Negotiations with Eskom well-advanced, stand-alone coal supply agreement required prior to commencement of mine construction
» Satellite pit on Moabsvelden planned to feed new 200ktpm processing plant on Vanggatfontein via dedicated 5km haul road
» Primary export & domestic middling thermal products
» Project implementation study to be finalised before end FY15
» Pit development scheduled to commence during 1HFY16, plant commissioning during 2HFY16, first product Q4 FY16
» Awaiting various regulatory approvals
» Results of additional phase of feasibility structural drilling have delivered positive outcome
» Environmental studies iro water use & NEMA applications underway
» Feasibility/implementation study underway, due for completion June 2015, at which time go/no go decision to be made
» Integrated 1.6Mtpa opencast & underground mine with processing facility
» Primary export & domestic middling thermal products from dual seam operation, anticipated Q4 FY17
www.keatonenergy.co.za
RESULTS FOR THE SIX MONTHS ENDED 30 SEPTEMBER 2014
24
» Attractive long term coal market fundamentals remain in place
» Thermal coal demand growth projected at 5%, this will slow supply growth due to a lack of ongoing investment thereby helping to re-balance the market
» Long term impact on coal demand driven by Chinese economic growth
» Even with lower growth rates energy demand in China will grow significantly
» It is expected that at least 50% of new Chinese electricity demand will be coal based generation
GLOBAL COAL MARKET OUTLOOK
» API4
Source: IHS Energy / SSY/ GlobalCoal
» Supply demand balance (Mt)
Source: Glencore
USD
$/t
www.keatonenergy.co.za
RESULTS FOR THE SIX MONTHS ENDED 30 SEPTEMBER 2014
GLOBAL COAL MARKET OUTLOOK 25
» India has emerged as the dominant growth market
» USD36bn invested in generation capacity
» USD61bn invested in transmission capacity
» Current installed coal fired capacity = 145GW
» 2020 target installed coal fired capacity = 214GW
» Indian thermal coal imports (Mt)
Sources: CEA, Government budget, Glencore
www.keatonenergy.co.za
RESULTS FOR THE SIX MONTHS ENDED 30 SEPTEMBER 2014
DOMESTIC COAL MARKET OUTLOOK 26
» Eskom’s base load is made up 86% by coal-fired generating capacity
» Eskom currently runs 13 base load coal-fired power stations, including three return-to-service stations which could provide 36GW to the grid
» As Medupi and Kusile are brought on line this will increase to 44.5GW
» Despite a slight reduction in production, coal maintained its strong position as the leading South African mining commodity revenue generator
» Eskom coal supply requirements (Mt)
Source: Eskom
86%
1%
3% 4%
6% 0%
0%
Coal
Hydroelectric
Pumped storage
Nuclear
Open cycle gas turbines
Renewables
Distribution
» Eskom electricity base load
Source: Eskom; SBG Securities analysis
29%
16%
3% 2% 2%
48%
Exports
Sasol
Industries
Metallurgy
Merchants / Domestic
Eskom
» SA coal uses (255Mt total in FY13)
Source: DMR; SBG Securities analysis
www.keatonenergy.co.za
RESULTS FOR THE SIX MONTHS ENDED 30 SEPTEMBER 2014
KEY DELIVERABLES | Where from 27
» Safety first
» 2Mtpa target
» Develop a suite of long life assets
» Build a sustainable cash generative business
» Growth through acquisition
» Financing in difficult environment
» 5Mtpa target
» Consistent operational and financial year
» Safe
» Profitable
WIP
www.keatonenergy.co.za
RESULTS FOR THE SIX MONTHS ENDED 30 SEPTEMBER 2014
KEY DELIVERABLES | Where to 28
» Vaalkrantz LOM enhancement project results
» Moabsvelden regulatory approvals & domestic off-take
» Consistent operational and financial performance
» Dividends
» Commission Moabsvelden
» Increased cash generation
» Commission Braakfontein
» Achieve 5Mtpa
» Enhance shareholder returns
www.keatonenergy.co.za
RESULTS FOR THE SIX MONTHS ENDED 30 SEPTEMBER 2014
KEATON AS AN INVESTMENT PROPOSITION 29
» Net asset value 421
» Market price 275
» Good long term-value in our share
– Share trading at a significant discount to NAV
– Cash generative
– Approved dividend policy
» Net asset value (NAV) expressed as a percentage of market capitalisation
0%
50%
100%
150%
200%
250%
Source: * extracts from PWC's SA Mine 2014 - 6th edition
Cents per share at 30 September 2014
RESULTS FOR THE SIX MONTHS ENDED 30 SEPTEMBER 2014
Wednesday, 19 November 2014
30
www.keatonenergy.co.za
RESULTS FOR THE SIX MONTHS ENDED 30 SEPTEMBER 2014
31
DISCLAIMER
Opinions expressed herein are by nature subjective to known and unknown risks and uncertainties. Changing information or circumstances may cause the actual results, plans and objectives of Keaton Energy Holdings Ltd (the “Company”) to differ materially from those expressed or implied in the forward looking statements. Financial forecasts and data given herein are estimates based on the reports prepared by experts who in turn relied on management estimates. Undue reliance should not be placed on such opinions, forecasts or data. No representation is made as to the completeness or correctness of the opinions, forecasts or data contained herein. Neither the Company, nor any of its affiliates, advisors or representatives accepts any responsibility for any loss arising from the use of any opinion expressed or forecast or data herein. Forward-looking statements apply only as of the date on which they are made and the Company does not undertake any obligation to publicly update or revise any of its opinions or forward looking statements whether to reflect new data or future events or circumstances.