MITSUI MATSUSHIMA CO. LTD. Presentation for Business Results Ended March 212 May 212 1
Contents FY211 Financial Results P.3 FY212 Consolidated Financial Forecast P.1 Growth Strategy P.14 Appendix P.18 2
FY211 Financial Results 3
Consolidated Income Statement Highlights Record highs in Ordinary profit and Net profit Net sales: Increased sales and profit due to higher coal prices than forecast in the Fuel Business. Operating profit: Increased as a rise in the unit price for coal and higher production and sales volumes in the Liddell Coal Mine despite the declines due to a year-on-year gain in the Australian dollar at the exchange rate for settlement (US$/A$) in the Fuel Business (coal production). Extraordinary profit: Recorded a 2.116 billion gain on the sale of investment securities. Extraordinary loss: Recorded a 88 million impairment loss on fixed assets and a 61 million valuation loss on investment securities. (Million yen) Net sales Operating profit Non-operating profit Non-operating expenses Ordinary profit Extraordinary profit Extraordinary loss Net profit before income taxes Income taxes-current Corporate taxes-deferred FY 21 FY 211 Yr/Yr Amount Amount Change 87,658 98,63 1,44 3,12 6,29 3,188 28 571 291 829 284 (544) 2,553 6,577 4,24 5,869 2,756 (3,113) 2,28 1,775 (433) 6,214 7,559 1,344 1,589 2,772 1,182 144 (93) (237) Net profit 4,48 4,88 399 4
Consolidated Segment Information Highlights Fuel Business (coal sales and production): See Breakdown of Fuel Business (coal sales and production) on next slide. Building Material Business: Further operating loss despite signs of a recovery in demand from the 2 nd half of the fiscal year. Recycling and Ferroalloy Business: 594 million operating loss due to a delayed transition to full-scale operations in the Ferroalloy Business and difficulties securing a stable supply of raw materials. [Net sales] [Operating profit] Business (Million yen) FY 21 FY 211 Yr/Yr Change Business (Million yen) FY 21 FY 211 Yr/Yr Change Fuel (Coal sales) 74,82 82,43 8,347 Fuel (Coal sales) 114 98 (16) Fuel (Coal production) 14,597 19,163 4,566 Fuel (Coal production) 4,15 6,881 2,776 Construction material 3,398 3,112 (285) Construction material (22) (123) 97 Real estate 516 545 29 Real estate 28 33 5 Recycling and Ferroalloy 526 55 23 Recycling and Ferroally (914) (594) 319 Other 2,986 2,833 (152) Other (43) (22) 21 Eliminations (8,45) (1,573) 2,123 Eliminations 31 17 (14) 87,658 98,63 1,44 3,12 6,29 3,188 * Other includes Coal mining Technique transfer business, Supermarket, Maritime Transport, Warehousing and Coal unloading businesses, etc. * Net sales represent sales before the elimination of inter-segment transactions. 5
Breakdown of Fuel Business (Coal Sales and Production) Highlights Coal Sales: Net sales increased due to higher coal prices. Operating profit decreased due to declines in both sales volume and commissions per ton. Coal Production: Net sales, operating profit increased. A rise in the unit price for coal and increased production and sales volumes offset declines resulting from a year-on-year gain in the Australian dollar at the exchange rate for settlement (US$/A$) in the Fuel Business (coal production). [Net sales] [Operating profit] (Million yen) FY 21 FY 211 Yr/Yr Change (Million yen) FY 21 FY 211 Yr/Yr Change Coal sales Sales volumes (million tonees) Coal production Sales volume (million tonnes) 74,82 82,43 6.75 6.5 14,597 19,163 1.51 1.66 8,347.25 4,566.15 Coal sales Coal production 114 98 4,15 6,881 (16) 2,776 Eliminations (8,361) (1,456) (2,94) Eliminations Fuel Business 8,318 91,138 1,819 Fuel Business 4,22 6,979 2,759 [Major indicators] FY 21 Result FY 211 Result Coal sales (Apr-Mar) Average coal price of import and sales Exchange rate /US$ (Average exercise rate) 1,975 85.8 12,684 79.1 Average coal price: Thermal coal US$ 92.94 US$ 122.6 Coal production (Jan-Dec) Average coal price: Semi-soft coking coal Exchange rate US$/A$ (Average exercise rate) US$ 141.73 US$.8791 US$ 23.3 US$ 1.21 Exchange rate /A$ (Average rate during period) 8.54 82.28 * Coal Sales: March FYE; Coal Production: December FYE 6
Consolidated Balance Sheet Mar 31, 211 Amount (Million yen) (%) Mar 31, 212 Amount (Million yen) (%) Change (Million yen) Major changes Current assets 17,677 36.1 17,817 38.6 14 Cash and deposits -396 Inventories +235, Accounts receivable +315 Fixed assets, Deferred assets 31,345 63.9 28,361 61.4 (2,984) Tangible fixed assets -1,171 Investment securities -1,544 assets 49,22 1. 46,178 1. (2,844) Current liabilities 9,262 18.9 8,384 18.1 (877) Income taxes payable +1,313 Accounts payable +357 Short-term debt -1,324 Fixed liabilities 15,58 31.6 1,94 23.7 (4,568) Long-term debt -3,374 Long-term deferred tax liabilities - 658 liabilities 24,77 5.5 19,325 41.8 (5,445) net assets 24,251 49.5 26,853 58.2 2,61 Net profit +4,88 Dividends -554 Valuation difference on marketable securities -1,46, Currency exchange adjustments -99 liabilities and net assets 49,22 1. 46,178 1. (2,844) 7
Consolidated Cash Flows (Million yen) FY21 FY211 Change Main Factors (FY211) Income before income taxes 6,214 7,559 1,344 Working capital (1,664) (86) 83 Declined on increase in accounts receivable Others (2,875) (1,615) 1,26 Declined on payment of income taxes, etc. Cash flows from operating activities 1,674 5,83 3,48 Changes in fixed assets Changes in investment securities Others (6,78) 6,313 1,4 (891) 963 (2,563) 5,816 (5,35) (3,964) Declined on purchase of machinery and equipment at Mitsui Matsushima Australia Increased on the sale of investment securities at Mitsui Matsushima International Declined due to deposits made to fixed-term deposits (over 3 months) Cash flows from investment activities 1,6 (2,492) (3,498) Changes in debt and bonds (4,195) (5,114) (919) Declined on repayment of loans and bonds Dividend payments (553) (55) 3 Others (19) (21) (1) Cash flows from financial activities (4,768) (5,685) (916) Effect of exchange rate change on cash and cash equivalents (182) 127 39 Change in cash and cash equivalents (2,27) (2,967) (697) Cash and cash equivalents, beginning of period 13,794 11,524 (2,27) Cash and cash equivalents, end of period 11,524 8,557 (2,967) 8
Major Financial Indicators (Consolidated; actual performance for the past 5 years) FY27 FY28 FY29 FY21 FY211 Net sales (million yen) 75,97 17,691 61,14 87,658 98,63 Operating profit (million yen) 1,182 6,441 4,83 3,12 6,29 Ordinary profit (million yen) 837 4,251 5,25 2,553 6,577 Net profit (million yen) 2,367 (1,251) 3,463 4,48 4,88 Earnings per share (EPS) (yen) 22.51 (11.89) 29.99 32.31 35.19 net assets Debt/equity ratio number of shares outstanding (thousand) Dividend per share (million yen) Shareholders equity ratio (%) Balance of liabilities with interest (incl. bonds) (million yen) (times) Book value per share (BPS) (yen) Return on assets (ROA) (%) (yen) 13,813 9,4 2,23 24,251 25.8 23,11 1.67 131.35 1.62 8.57 11.8 5.21 15,178 15,178 138,677 138,677 3. 19.7 24,952 2.76 85.97 3. 41.2 19,98.99 145.71 4. 49.5 15,698.65 174.91 4. 26,853 58.2 1,583.39 193.67 13.82 138,677 4. * The above figures are based on the annual securities report. 9
FY212 Consolidated Financial Forecast 1
Consolidated Financial Forecast Net Sales estimated at 86/ billion Domestic sales volume is expected to increase slightly. However, as a negative prospect, coal market price is likely to decline both in Thermal coal and Coking coal affected by increasing Shale Gas production in America and a tendency of excess coal supply for sluggish iron and steel making market. Estimated; Operating profit at 3 billion, Ordinary profit at 3 billion, Net profit at 2 billion Although Liddell Coal Mine operates favourably of its production, recent trends in foreign exchange rates ( weak US$ and strong A$) could be a negative factor for revenue adding to the declining coal price. (Additionally, the MRRT (Minerals Resource Rent Tax) will take effect on July 1, 212 under revisions to Australia s tax laws. At present, the tax is not expected to affect our FY212 forecasts.) FY211 Result (1 million yen) FY212 Forecast (1 million yen) 1 st half 2 nd half Change Net sales 98 42 44 86 (12) Operating profit 62 11 19 3 (32) Ordinary profit 65 11 19 3 (35) Net profit 48 8 12 2 (28) 11
Consolidated FInancial Forecast by Segment Highlights Fuel Business (Coal sales): Decrease in revenues are expected due to unfavourable coal market prices despite the increase in domestic sales volume of coal. Fuel Business (Coal production): Decrease in revenues and profit are anticipated affected by lower coal prices and stronger Australian dollar at the exchange rate for settlement ( US$/A$ ). [Net sales] [Operating profit] Business (1 million yen) Fuel (Coal sales) FY 211 Result 824 FY 212 Forecast 73 Yr/Yr Change Business (1 million yen) Fuel (Coal sales) FY 211 Result (94) FY 212 Forecast Yr/Yr Change Fuel (Coal production) 191 155 (36) Fuel (Coal production) 68 31 (37) Building material 31 3 (1) Building material (1) 1 Real estate 5 6 1 Real estate Recycling and Ferroalloy 5 3 (2) Recycling and Ferroalloy (5) (1) 4 Other 28 26 (2) Other Elliminations (15) (9) 15 Elliminations 98 86 (12) 62 3 (32) * Other includes Coal mining Technique transfer business, Supermarket, Maritime Transport, Warehousing and Coal unloading businesses, etc. * Net sales represent sales before the elimination of inter-segment transactions. 12
Breakdown of Fuel Business (Coal Sales and Production) [Net sales] [Operating profit] (1 million yen) FY 211 Result FY 212 Forecast Yr/Yr Change (1 million yen) FY 211 Result FY 212 Forecast Yr/Yr Change Coal sales Sales volume (million tonnes) 824 73 6.5 6.9 (94).4 Coal sales Coal production Sales volume (million tonnes) 191 1.66 155 1.67 (36) 1 k tonnes Coal production 68 31 (37) Eliminations (14) (95) 9 Eliminations Fuel Business 911 79 (121) Fuel Business total 68 31 (37) Coal sales (Apr Mar) [Major indicators] Average coal price of import and sales Exchange rate /US$ (Average exercise rate) Average coal price Thermal coal FY 211 Result 12,684 79.1 US$122.6 FY 212 Forecast 1,5 US$114. Impact of foreign exchange rates on net profit US$/A$ Approx. 7 million profit gain per A$.1 decline Coal production (Jan Dec) Average coal price Semi-soft coking coal Exchange rate US$/A$ (Average exercise rate) Exchange rate /A$ (Average rate during period) US$23.3 US$1.21 82.28 US$154. US$1.5 8. A$/ Approx. 3 million profit gain per 1 decline * Coal Sales: March FYE; Coal Production: December FYE 13
Growth Strategy 14
Trend in Demand for Coal Resources Global coal consumption outlook (Million tons) 12, 1, 8, 6, 4, 6,119 415 64 1,241 7,474 425 58 1,136 21 575 7,87 425 575 1,66 23 62 8,235 41 56 1,126 22 68 8,99 4 54 1,216 21 765 9,741 45 525 1,261 2 866 1,461 425 52 1,326 19 976 Central and South America Africa Middle East Russia / Eastern Europe Western Europe North America Asia (other) Australia / New Zealand South Korea 2, 23 43 3,692 4,37 4,278 4,823 5,328 5,683 Japan India 2,46 China 25 21 215 22 225 23 235 (Year) Source: EIA, International Energy Outlook 211 China s growth to slowdown, but developing countries seen leading to mid- to long-term expansion in demand Securing quality resources and energy sources is important 15
Growth Strategy Increase profitability by securing mining rights for new coal mines Realize projects of developing new coal mine making full use of our three strengths: Technical skills in Mining, Planning and propose capabilities and Sales ability to quality customers Stabilize and diversify profitability developing new business Develop new businesses in non-coal fields 16
Growth Strategy Mitsui Matsushima Technical mining skills gained through operating domestic coal mines Planning and proposal capabilities Sales activities to quality customers Square Resources Holdings (Australia) Coal resource exploration expertise in Australia/New Zealand Square Exploration Pty. Ltd. (Joint investment company) Joint exploration business involving MMI Coal Tech Co., Ltd. Exploration operations in Queensland, Australia Locate promising sources efficiently and economically from the initial stages of exploration 17
Appendix 18
Development of Overseas Resources and Energy Businesses In brackets : Mitsui Matsushima s business condition As of Apr. 1, 212 Walter Energy Inc. (shares owned/exclusive marketing rights in Japan) Apr-Dec 211 Brule Coal Mine Production volume: 1.8 Mt Wolverine Coal Mine Production volume: 1.1 Mt Willow Creek Coal Mine Production volume: 57, t *Results for the Jan-Mar 211 period, before the merger with the former Western Coal, have not been made public. Xstrata Coal Canada Resources Ltd. (exclusive marketing rights in Japan) Rossin Coal Mine Coking coal/pci (F/S stage; resources: 24 Mt) Canada US Indonesia Cline Mining Corp. (exclusive marketing rights in Japan) New Elk Coal Mine Coking coal (initial production stages) Reserves: 388.5 Mt PT Anugerah Bara Kaltim ABK Coal Mine (exclusive marketing rights in Japan) Thermal coal; production volume: 6. Mt (CY11) Tiger Energy Trading Pte. Ltd. (Exclusive marketing rights to certain customers in Japan) JMB Coal Mine Thermal coal; production volume 9.1 Mt (CY11) Sebuku Coal Mine Thermal coal; production volume 2. Mt (CY11) Australia Liddell Joint Venture (32.5% ownership/exclusive marketing rights in Japan) Lidell Coal Mine Coking coal: 25%; Thermal coal 75% Production capacity: 7.5 Mt (CY11) 19
Coal Business Organizational Chart Capital investment (ratio) Return of profits Flow of coal sales Consolidated subsidiary of Mitsui Matsushima Co., Ltd. Customers As of April 1, 212 Mitsui Matsushima Co., Ltd. (MM) Walter Energy Inc. (US) (Western Coal Corp.) Wolverine Coal Mine (Canada) Brule Coal Mine (Canada) Willow Creek Coal Mine (Canada) Dividend 1% Mitsui Matsushima International Pty, Ltd. (MMI) Tiger Energy Trading Pte. Ltd. (Singapore) JMB Coal Mine (Indonesia) Sebuku Coal Mine (Indonesia) Dividend 1% Mitsui Matsushima Australia Pty, Ltd. (MMA) ABK Coal Mine (Indonesia) Profit Interest 32.5% Cline Mining Corp. (Canada) New Elk Coal Mine (US) Initial production stages Liddell Joint Venture (Liddell Coal Mine operation) Xstrata PLC 67.5%, MMA 32.5% Liddell Coal Mine (Australia) 2
Liddell Coal Mine (Australia): 1 Operation: JV between Mitsui Matsushima Australia Pty Ltd.(32.5%) and Xstrata PLC (67.5%) JORC Resource: 67 million tonnes (Measured: 94 Mt; Indicated: 24 Mt; Inferred: 37 Mt) (Open-cut: 423 Mt [reserves: 69 Mt]; Underground 245 Mt) Productivity: 13,18 tonnes (cleaned coal)/person/year (211 actual) (Entire NSW, Australia productivity: 1,32 tonnes/person/year (open cut; 29-1)) Production Capacity: 7.5 million tonnes/year(maximum capacity for the coal preparation plant) Australia Liddell Coal Mine Good location: About 17 km to the port Western Australia Northern Territory South Australia Queensland New South Wales New South Wales Newcastle Victoria Sydney Canberra Port World s largest coal port Mitsui Matsushima International Pty. Ltd. Mitsui Matsushima Australia Pty. Ltd. 21
Liddell Coal Mine (Australia): 2 CY211 Coal production (actual):6.82 million tonnes (planned: 6.7 Mt) Record high production Liddell Coal Mine Production (raw coal): Results andplan As of Dec. 31, 211 (Ten thousand tonnes) 8 6 4 New coal preparation plant completed 447 57 Owner operation started 556 682 74 Liddell (total) 2 Mitsui Matsushima portion 28 actual 29 actual 21 actual 211 actual 212 plan (Year) Liddell Coal Mine 22
Coal Import and Sales Trends (By type of coal) Billion yen 1 Sales by type of coal 8 74.1 82.4 73. (estimated) 6 Thermal coal Coking coal 4 2 42.3 Sales volume by type of coal Ten thousand tonnes 8 6 4 FY 29 FY 21 FY 211 FY 212 469 675 65 69 (planned) Thermal coal 2 Coking coal FY 29 FY 21 FY 211 FY 212 23
Coal Imports and Sales by Customer Industry Electricity 28% Cement 6% General industry 3% Electricity 18% Coal sales by customer industry General industry Cement 6% 3% Electricity 2% General industry Cement 6% 3% Electricity 22% General industry Cement 6% 4% Iron and Steel 63% Iron and Steel 73% Iron and Steel 71% Iron and Steel 68% FY29 ( 42.3 billion) FY21 ( 74.1 billion) FY211 ( 82.4 billion) FY212 ( 73. billon) estimated General industry Cement 5% 7% Coal sales volume by customer industry General industry 1% Cement 5% General industry Cement 6% 7% General industry 6% Cement 1% Electricity 33% Iron and Steel 55% Electricity 24% Iron and Steel 61% Electricity 22% Iron and Steel 65% Electricity 19% Iron and Steel 65% FY29 (4.69 Mt) FY21 (6.75 Mt) FY211 (6.5 Mt) FY212 (6.9 Mt) planned 24
This document is exempt from audit procedures based on the Financial Instruments and Exchange Act. At the time of disclosure of this document, the Company has not completed audit procedures for financial statements based on the Financial Instruments and Exchange Act. These materials contain forward-looking statements that are in no way guarantees of future performance. Future performance is affected by risks and uncertainties. Future performance may vary due to changing assumptions and conditions in the business environment. These materials should not be relied on as the sole source of information, and should be used with discretion. Mitsui Matsushima Co., Ltd. is in no way responsible for any damages caused as a result of relying on or using these materials. IR Inquiries: TEL +81-92-771-2171 General Affairs Dept. 25