REVIEWED INTERIM FINANCIAL RESULTS 2013

Transcription

1 REVIEWED INTERIM FINANCIAL RESULTS 2013 for the six-month period ended 30 June 2013

2 Overview # LTIFR* at 0,21 against target of 0,15 Revenue from coal R6,1 billion down 1% HEPS of 712 cents up 198% Coal HEPS contribution to group 225 cents up 58% Core net operating profit R1,2 billion up 254% Coal produced 18,8Mt ** down 9% Interim dividend of 235 cents per share up 57% on 2012 final dividend # Compared to 2H12 * Lost time injury frequency rate expressed per man hours worked ** Excluding buy-ins 2

3 Human capital: safety and health Fatalities 1H13 fatality free LTIFR Safety LTIFR of 0,21 7 business units LTI * free Continued focus on safety improvement through audits, training and workshops Target: 0,15 Health Internal tuberculosis audits at all business units HIV/AIDS disclosure initiative Enrolment treatment up by 24% Reportable fatalities Accepted occupational disease cases Tuberculosis Pneumoconiosis Noise induced hearing loss 2H12 1H13 * Lost time injury 3

4 Human capital: leadership and people Transformation Achieved Mining Charter target in four of the six HDSA * categories HDSA statistics (%) Training interventions R68 million for 1H13 Mayoko in-country skills development Youth development A total of 735 young people have been trained of which 81% were HDSAs Actual Target HDSA youth training (n=594) Mpower R4 million dividends paid in April employees benefitted from the payout * Historically disadvantaged South Africans ** Professionals in training 4

5 Natural capital Biodiversity Wetland plans and ongoing rehabilitation at all business units Compliance Environmental authorisations for all operations in place* Integrated Water Use Licence for Arnot and NBC in process** Carbon and water Group target to reduce potable water consumption by 5% per annum * In terms of inter alia the Mineral and Petroleum Resources Development Act, National Water Act, National Environmental Management Act ** Operate under water use permits granted in terms of old Water Act 5

6 Social capital Social and labour plans Transform and leave a legacy in communities Implement our commitments Community development Finalised local economic development project plans to the value of R300m for Housing 740 housing units at GMEP* completed at R590 million * Grootegeluk Medupi Expansion Project 6

7 Portfolio improvement: coal Strategy Improve asset portfolio Realise continuous improvement potential Increase productivity and efficiency while achieving targets Developments GMEP 96% complete Agreement in place to bridge period of Medupi delay GG backfill phase 1 on track for 3Q13 Moranbah South environmental impact and authorisation expected in 2H14 Thabametsi mine to supply 3,8Mtpa to 600MW IPP base load power station Contemplating cessation of NCC production Expected project timeline 2H13 Char 2 BFS* GG backfill phase 1 completion Market coke BFS Thabametsi phase 1 PFS # Potential cessation of NCC production 2014 Belfast BFS GMEP ramp-up Thabametsi phase 1 BFS Tshikondeni closure 2015 Belfast construction Moranbah South BFS Thabametsi small scale mining Semi coke/char 2 construction dependent on market conditions Inyanda closure Thabametsi phase 2 PFS 2016 Char 2 commissioning Moranbah South construction * Bankable feasibility study # Pre-feasibility study 7

8 Portfolio improvement: ferrous Strategy Develop and operate integrated ferrous business Review of the alloys business and beneficiation through application of UHDMS * Developments Mayoko 730Mt resource confirmed through additional exploration Continued discussion and consultation with RoC ** government to finalise Mining Convention Project delay as a result of Mining Convention Mayoko expected project timeline 1H14 Mining convention approval 2H14 Ramp-up to 30ktpm 2015 Ramp up to 2Mtpa Phase 2 BFS 2016 Phase 2 construction 2019 Ramp up to 10Mt AlloyStream TM Letaba demonstration facility re-started to generate input for commercial feasibility study FerroAlloys Expansion options continuously assessed subject to future demand * Ultra high dense medium separation ** Republic of Congo 8

9 Portfolio improvement: titanium dioxide Strategy Completed the first year of the three year standstill agreement Spending time understanding the business and its market Decision to potentially increase shareholding in Tronox still under review whilst we continue to consider our options within current and future markets for pigment Tronox shareholding 15 June ,20% 30 June ,20% 31 December ,65% 30 June ,42% Developments Dilution of shareholding due to warrants and options exercised Continues to be equity-accounted 9

10 Portfolio improvement: energy Strategy Explore and integrate opportunities in energy markets with a focus on cleaner energy Decrease carbon footprint Developments Cennergi Financial closure on Amakhala Emoyeni and the Tsitsikamma wind farms Commissioning 2016 Expected project timeline 2H13 Financial close on 2 wind projects Linc Energy development Cennergi project construction and commissioning Waterberg GDF SUEZ selected as partner for 600MW IPP* Underground coal gasification Partnered with Linc Energy to develop energy solutions in Sub-Saharan Africa Joint concept study in progress * Independent Power Producer 10

11 Operational and financial performance 11

12 Main features Financial metrics Revenue of R6,2 billion Core NOP # at R1,2 billion Equity income of R2 billion Owner-controlled operations Continued volatility in commodity prices and exchange rates Three weeks of industrial action decreased production by 2,2Mt Non-controlled operations Sishen Iron Ore Company Dividend received of R914 million Tronox Post-tax equity loss of R168 million Dividend received of R243 million Black Mountain Post-tax equity loss of R81 million Dividend received of R59 million Revenue (Rb) HEPS* (cps)** Dividend (cps) Interim dividend 235 cents per share 3 times cover*** # Net operating profit * Headline earnings per share ** Cents per share *** Excluding non-core items 12

13 Financial overview: IFRS* R million 1H13 2H12 % Change 1H13 vs 2H12 1H12 % Change 1H13 vs 1H12 Revenue (2) (36) Operating expenses (5 328) (5 966) 11 (6 636) 20 Profit/(loss) on sale of subsidiaries/non-core assets (84) Net operating profit (87) Operating margin (%) (80) Post-tax equity-accounted income (23) Attributable earnings: owners of parent (75) Headline earnings (39) Cash retained from operations (59) (76) Capital expenditure (19) Average ZAR/USD rate Realised 9,19 8,49 8 7,88 17 Spot 9,20 8,46 9 7,93 16 Attributable earnings (cents per share) (75) Headline earnings (cents per share) (39) Dividend declared (33) Weighted average number of shares (million) * International Financial Reporting Standards incorporating International Accounting Standards Including discontinued operations 13

14 Non-core adjustments R million 1H13 2H12 1H12 Coal Profit on sale of assets Impairment charge (287) (292) Mineral sands 99 Base metals 32 (2) 570 Other (15) (126) (Loss)/profit on sale: subsidiaries and other PPE* (2) (126) Dilution of investment in Tronox (13) Write down of intercompany loan 315 Impact on net operating profit (270) (19) Post-tax equity-accounted income Tax on headline earnings adjustments 12 (5) (29) Total non-core adjustment impact on attributable earnings (214) (17) * Property, plant and equipment 14

15 Financial overview: core* R million 1H13 2H12 % Change 1H13 vs 2H12 1H12 % Change 1H13 vs 1H12 Revenue (2) (36) Operating expenses (5 058) (6 031) 16 (7 147) 29 Net operating profit (55) Operating margin (%) (30) Post-tax equity-accounted income (8) Headline earnings (34) Capital expenditure (19) Net debt Headline earnings per share (cents) (34) Weighted average number of shares (million) * Non-IFRS numbers 15

16 HEPS contribution Cents* 1H13 % contribution 2H12 % contribution (Decrease)/ increase in % contribution 1H13 vs 2H12 1H12 % contribution JSE HEPS (Decrease)/ increase in % contribution 1H13 vs 1H12 Coal (28) Ferrous (78) TiO 2 (47) (7) (109) (46) (36) Other (42) (6) (173) (73) (10) CORE HEPS Coal (24) Ferrous (71) TiO 2 (47) (7) (108) (43) (39) Other (43) (6) (162) (65) 59 (60) (6) * Based on group weighted average number of shares (WANOS) of 355 million (2H12: 354 million; 1H12: 354 million) 16

17 Coal financial performance R million 1H13 2H12 % Change 1H13 vs 2H12 1H12 % Change 1H13 vs 1H12 Revenue (1) Tied operations (11) Commercial operations Net operating profit Tied operations Commercial operations (10) Operating margin (%) (9) Post-tax equity-accounted income* Capital expenditure (40) (16) Headline earnings contribution to group (10) HEPS contribution (cents) (10) Average export price US$/tonne (3) 103 (18) * Mafube and SDCT 17

18 Coal production* Total coal production (Mt) Metallurgical coal production (Mt) Thermal coal production (Mt) Tonnes lost due to strikes (kt) GG 880 Inyanda 67 Arnot 162 Leeuwpan 204 Matla 854 Total Commercial Tied Buy-ins * Restated 18

19 Coal market and sales* Total coal sales (Mt) Metallurgical coal sales (Mt) Thermal coal sales (Mt) Steam coal and market coke prices # FC 2015FC Domestic Tied Export RBCT steam HCC Chinese market coke * Restated # US$/t FOB Source Macquarie 19

20 Coal contribution Revenue contribution (Rb) Net operating profit variance analysis (Rm) Core NOP 2H12 Core NOP 1H13 Net operating profit contribution (Rb) HEPS contribution to group 0 Commercial Tied 20

21 Coal capital expenditure GMEP 96% complete Project expenditure to date is R8,9 billion Capital expenditure forecast at R10,2 billion 740 housing unit project completed at R590 million All costs and revenue to be capitalised until commissioning GMEP capital and ramp up Rm Mt GG backfill 94% complete Project expenditure to date is R633 million Phase 1 capital expenditure forecast of R946 million Phase 2 expected in FY14 with capital expenditure of R650 million Cumulative capital Coal capital expenditure (Rb) Ramp-up 2018 Expansion Sustaining 21

22 Mayoko capital expenditure Mayoko phase 1 730Mt resource confirmed Project capital increased from US$320 to US$340 Total expenditure in 1H13 of R854m: Capital expenditure at R650 million Exploration cost capitalised at R64 million Operational expenditure of R140 million capitalised Current impact of delay: Additional nine months and R200 million additional capital Ramp-up subject to Mining Convention as well as finalisation of port and rail access requirements expected in 1H14 First ore in 2H14 2Mt in FY15 Risk mitigation: R1 billion contractual exposure limit ore containers, eight locomotives, 90 rail wagons, and Phase 1A plant delivered Value engineering process kicked-off in light of delay Mayoko capital expenditure and ramp-up US$m Mt Cumulative capital Ramp-up Mayoko capital expenditure (US$m) 22

23 Ferrous: SIOC SIOC HEPS contribution SIOC post-tax equity contribution (Rb) 0 SIOC dividend received (Rb) Iron ore prices # FC 2015FC Fines (62% Fe) Lump (63% Fe) # US$/t FOB Source Macquarie 23

24 Titanium dioxide Shareholding Dilution from 44,65% to 44,42% HEPS contribution Financial performance Tronox loss of R168 million Dividends received of R243 million Decrease in mineral sands and pigment prices Increased volumes Exxaro s share of purchase price allocation adjustments of R361million 1H11 2H11 1H12 2H12 1H13 Purchase price adjustments (June YTD) Tronox dividend received (Rm) IFRS results (Rm) Total Tronox SA Ops UK Equity (loss)/income (168) (664) Add back PPA # RSA Remainder of Tronox Adjusted contribution to group earnings 195 (514) # Relates to depreciation adjustments and inventory write-downs 24

25 Attributable earnings: core R million 1H13 2H12 % Change 1H13 vs 2H12 1H12 % Change 1H13 vs 1H12 Net operating profit (55) Net financing cost (266) (197) (35) (156) (71) Income from investments Post-tax equity-income/(loss) (8) SIOC Tronox Limited (168) (368) (242) Mafube Cennergi (38) (40) 5 (25) (52) Black Mountain (7) Tax (441) (253) 74 (875) 50 Profit after tax (34) Non-controlling interest 5 12 (58) 18 (72) Attributable earnings: owners of parent (34) Attributable earnings (cents per share) (34) Dividend declared (cents per share) (33) 25

26 Net debt variance R million (1 218) (602) Net debt January 2013 Cash generated Net financing costs Tax Dividends paid Capex Investing activities Dividends received Other Net debt June

27 Capital funding structure Ratios*: 1H13 2H12 1H12 Net financing cost cover (times): EBITDA Return on equity: attributable income (%) Return on equity: headline earnings(%) Return on capital employed (%) R million Facilities available Maturity profile of debt Drawn Undrawn Repayment year Interest-bearing borrowings Interest capitalised 38 Capitalised transaction cost (44) Long-term borrowings Short-term borrowings net of cash 83 2H14-1H H15-1H H16-1H After 1H Net debt Net debt/equity ratio (%) 12 * Based on IFRS results 27

28 Dividend Interim dividend 30 June 2013 Interim dividend 30 June 2012 Final dividend 31 Dec 2012 Total dividend 31 Dec 2012 Core attributable earnings per share (cents) Dividend declared per share (cents) Dividend cover* (times) 2,94 3,02 1,67 2,61 Dividend declared (Rm) BEE Holdco Anglo Public Mpower * Adjusted for non-cash non-core items 28

29 Outlook 29

30 Future outlook: medium term General Improve safety performance Restricted economic outlook Mining sector concerns Strategic response: Reposition for future Cost management Coal Local markets stable Sensitivity to global commodity influences International markets softer GMEP ramp-up Cessation of production contemplated at NCC Ferrous Establish our footprint through Mayoko AlloyStream demonstration facility initiation Energy Cennergi to focus on delivering current projects following financial closure 30

31 Additional slides 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 Exxaro Resources Limited (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. 31

32 Key events 1H13 1H12 2H12 January February March May June New Clydesdale Colliery (NCC) impairment Dilution of Tronox shareholding from 44,65% to 44,42% Restatement of prior year and revised results due to the early adoption of new accounting standards (IFRS* 10, 11 and 12 as well as IAS27 and 28) African Iron acquisition consolidated subsidiary Cennergi JV equity accounted joint venture KZN Sands partial impairment reversal Sale of Rosh Pinah operations derecognised subsidiary Sale of mineral sands derecognised subsidiary Acquisition of shareholding in Tronox Limited equity accounted associate September December Increased shareholding in Tronox Limited to 44,65% Sale of non-core coal prospecting rights 32

33 Group cash flow R million 1H13 2H12 1H12 Cash retained from operations Net financing cost (128) (57) (80) Interest paid (165) (124) (221) Interest received Tax (117) (113) (164) Dividends paid (546) (1 241) (1 771) Net cash from operating activities (189) Fixed assets (2 403) (2 981) (2 352) Intangible assets (23) (35) (1) (Increase)/decrease in non-current financial assets 33 (166) 150 Dividend income from investments Proceeds from disposal of PPE Proceeds on disposal of subsidiaries Increase in investments in associates and joint ventures (76) (396) Acquisition of subsidiary Decrease in cash and cash equivalents on disposal of subsidiaries (1 421) (1 052) Other 79 3 Net cash outflow (1 429) (1 122) (1 275) 33

34 Group depreciation and amortisation: core R million 1H13 2H12 1H12 Coal Tied operations Commercial operations Ferrous Mayoko 3 1 FerroAlloys Other 1 Other Mineral sands 283 Base metals 1 27 Other Total

35 Group EBITDA: core R million 1H13 2H12 1H12 Coal Tied operations Commercial operations Ferrous (42) 61 (87) Mayoko (1) 75 (77) FerroAlloys (25) (15) (8) Other (16) 1 (2) Other 6 (321) Mineral sands Base metals (12) (106) Other 6 (309) (268) Total EBITDA

36 Thermal: volumes '000 tonnes 1H13 1H12 1H11 FY12 FY11 Production Grootegeluk Matla Leeuwpan NBC Inyanda Arnot NCC Buy-ins Total production

37 Thermal: sales '000 tonnes 1H13 1H12 1H11 FY12 FY11 Sales to Eskom Grootegeluk Matla Leeuwpan NBC Arnot NCC Other domestic Exports Total sales

38 Metallurgical coal: volumes and sales '000 tonnes 1H13 1H12 1H11 FY12 FY11 Production Grootegeluk Tshikondeni Sales Domestic Export

39 Group net operating profit: 2H12 vs 1H13 R million IFRS 2H12 Tronox working capital adjustment Base metals Sale of non core assets Core 2H12 Price Volume Exchange Inflation GMEP shortfall Cost Core 1H13 NCC impairment Base metals Tronox investment dilution Sale of noncore assets IFRS 1H13 Coal 753 (109) (35) 113 (78) (292) Ferrous (5) (98) (44) (44) Other (494) (370) (13) 99 (5) 202 (87) 32 (13) (2) (70) Total (106) (53) 212 (83) (292) 32 (13)

40 Group net operating profit: 1H12 vs 1H13 R million IFRS 1H12 Mineral Sands Base metals Sale of assets & subsidiaries Core 1H12 Price Volume Exchange Inflation GMEP shortfall Cost Core 1H13 NCC impair ment Base metals Tronox investment dilution Sale of non-core assets IFRS 1H13 Coal (40) (228) (50) 167 (164) 601 (320) (292) Ferrous (88) (88) 5 3 (2) 38 (44) (44) Other (1 925) (438) (3 923) (309) 39 (16) (32) 231 (87) 32 (13) (2) (70) Total (1 925) (438) (3 963) 915 (223) (8) 151 (198) 601 (51) (292) 32 (13)

41 Salient dates Last day to trade cum dividend Friday 6 September 2013 Shares trade ex-dividend Monday 9 September 2013 Record date Friday 13 September 2013 Payment date Monday 16 September

42 Definitions Operating margin Net operating profit/loss as a percentage of revenue Net financing cost cover EBITDA Net operating profit/loss (before interest, tax, depreciation, amortisation, impairment charges and net deficit/surplus on sale of investments and assets) divided by net financing cost Return on equity attributable income Attributable earnings attributable to owners of the parent as a percentage of equity attributable to owners of the parent Return on capital employed Net operating profit/loss plus income/loss from non-equity-accounted investments plus income/loss from investments in associates as a percentage of average capital employed Net debt to equity ratio Interest-bearing debt less cash and cash equivalents as a percentage of total equity Net debt to net debt plus total shareholders equity Interest-bearing debt as a percentage of interest-bearing debt plus total shareholders equity 42

43 Index Title Page number Title Page number Adjustments non-core 14 Attributable earnings core 25 Commodities Coal 7; Energy 10 Ferrous 8; 22, 23 Titanium dioxide 9; 24 Cash flow 33 Capital expenditure 21; 22 Capital funding structure 27 Definitions 42 Depreciation 34 Dividend 28 EBITDA 35 Financial performance Coal 17 Core 15 IFRS 13 HEPS 16 Human capital 3; 4 Key events 32 Main features 12 Natural capital 5 Net debt variance 26 Net operating profit 39; 40 Outlook 30 Overview 2 Portfolio improvement 7-10 Production: Coal volumes and sales Revenue 13; 20 Salient dates 41 Social capital 6 Strategy