H1 FY19 Results Presentation February/March 2019 Black Rock Assore - - PowerPoint PPT Presentation

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H1 FY19 Results Presentation February/March 2019 Black Rock Assore - - PowerPoint PPT Presentation

Mar 23, 2024 848 likes •1.07k views

H1 FY19 Results Presentation February/March 2019 Black Rock Assore Executive Team Charles Walters Chief Executive Officer (CEO) Patrick Sacco Executive: Marketing & Sales (Deputy CEO) Ross Davies Chief Financial Officer (CFO)

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SLIDE 1

H1 FY19 Results Presentation

February/March 2019

Black Rock

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SLIDE 2

H1 FY19 Results Presentation

Assore Executive Team

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  • Charles Walters

Chief Executive Officer (CEO)

  • Patrick Sacco

Executive: Marketing & Sales (Deputy CEO)

  • Ross Davies

Chief Financial Officer (CFO)

  • Tiaan van Aswegen

Executive: Operations

  • Kieran Daly

Executive: Growth & Strategic Development

  • Bongani Phakathi

Executive: HR & Corporate Affairs

  • Mandla Tobela

Executive: Legal

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SLIDE 3

H1 FY19 Results Presentation

Assore Group Structure

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Oresteel Investments Boleng Trust Fricker Road Trust Assore Employee Trust Assmang Dwarsrivier Marketing & Shipping Other IronRidge (IRR: AIM) Dwarsrivier Chrome Mine Ore & Metal African Mining & Trust Minerais (51%) Wonderstone Exploration (Africa/Australia) Iron Ore Khumani Mine Beeshoek Mine Manganese Ore Black Rock Complex (Gloria Mine & Nchwaning Mine) Manganese Alloys Cato Ridge Works Cato Ridge Alloys (50%) Sakura (54%) Public (Free Float) Assore Ltd (ASR: JSE)

14.3% 11.8% 21.5% 52.4% 50% 100% 100% 100% 31%

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SLIDE 4

H1 FY19 Results Presentation

H1 FY19 Group Highlights

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3% 7%

Revenue

R3 948m

Profit After Tax (pre-Assmang)

R813m

19%

Attributable Earnings

R2 916m

Headline Earnings

R2 917m

29% 16%

Free Cash Flow

R4 754m

Net Cash (excluding Assmang)

R7 647m

HEPS

R28.28

DPS

R10.00

20% 20% 0%

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SLIDE 5

H1 FY19 Results Presentation

  • Slight deterioration in safety performance
  • HEPS up 20% y/y to R28.28; EPS up 19% to R28.27
  • Iron Ore and Chrome Ore sales volumes down y/y; Manganese volumes up
  • Iron Ore (especially lump) and Manganese Ore prices up; Chrome Ore down 10% y/y
  • Tailwind also from 5% weaker R/US$
  • Assmang (100%) headline earnings of R4.3bn up 23% y/y (73% of Assore)
  • Dwarsrivier Chrome earnings down 26% y/y on sales volumes and prices
  • Net Cash decreased to R7.6bn from R7.9bn at Jun-18 (working capital build at Minerais)
  • Interim dividend of R10/sh - equivalent to H1 FY18
  • ~92% of R6.7bn Black Rock Expansion Project capex now committed

H1 FY19 Group Highlights

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SLIDE 6

H1 FY19 Results Presentation

2% 36%

  • 4%

11% 3%

  • 14%

1%

  • 10%
  • 5%

5%

  • 30%
  • 20%
  • 10%

0% 10% 20% 30% 40% H1 FY19 vs. H1 FY18

Key Drivers - Sales volumes & prices

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Iron Ore Manganese Ore Manganese Alloys Chrome Ore Exchange Rate Market Price Sales Volume Market Price Sales Volume Market Price Sales Volume Market Price Sales Volume R/US$

Note: Market Prices & Sales Volumes per Slides 15-20

Lump Premium

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SLIDE 7

H1 FY19 Results Presentation

Headline Earnings - Dwarsrivier share down on FY18 (11% vs. 18%)

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1628 1433 3722 3555 2145 843 875 327 290 377 653 713 503 1976 1744 5209 5109 2917

  • 1000

1000 2000 3000 4000 5000 6000 FY15 FY16 FY17 FY18 H1 FY19 Rm Assmang Dwarsrivier Marketing & Shipping

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SLIDE 8

H1 FY19 Results Presentation

Headline Earnings - Iron Ore share up on FY18 (50% vs. 39%)

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* 1423 1413 2509 2004 1458 374 272 1501 2211 1132 1241 845 318 1976 1744 5209 5109 2917

  • 1000

1000 2000 3000 4000 5000 6000 FY15 FY16 FY17 FY18 H1 FY19 Rm Iron Ore Manganese Chrome

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SLIDE 9

H1 FY19 Results Presentation

7865 7647 848 1366 1750 290 277 225 1238 1000 2000 3000 4000 5000 6000 7000 8000 9000 10000 Rm

Cash Flow - Working Capital build impacted Net Cash

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Net Cash June 18 Operating CF (pre-WC) Working Capital Assmang Dividend Net Interest Net Additions/ (Disposals) Tax Dividends Paid Net Cash Dec 18

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SLIDE 10

H1 FY19 Results Presentation

19.15 16.90 50.49 49.53 28.28 6.00 7.00 14.00 22.00 10.00 0.00 10.00 20.00 30.00 40.00 50.00 60.00 FY15 FY16 FY17 FY18 H1 FY19 R/sh HEPS DPS

Dividends - Payout remains in line with the sector

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*103m shares **140m shares

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SLIDE 11

H1 FY19 Results Presentation

  • LTIFR in line with FY18 at 0.13
  • Headline Earnings up 23% y/y to R4.3bn

(FY18: R7.1bn)

  • Iron Ore 57% of earnings (FY18: 47%)
  • Net Cash of R4.1bn
  • Iron Ore
  • Production down 4% y/y to 8.7mt
  • Sales down 4% y/y to 8.8mt
  • Unit production cost up 6% y/y
  • Manganese Ore & Alloys
  • Black Rock production of 1.7mt (-7% y/y)
  • Black Rock unit production cost up 14% y/y
  • Black Rock Expansion Project 92% committed
  • Sakura running well, but ore price squeezing

margin

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Assmang* - Iron Ore benefitting from lump premium

Contribution to Assmang Headline Earnings

*All figures 100% Assmang basis

59% 47% 57% 31% 54% 43% 10% 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% FY17 FY18 H1 FY19 Iron Ore Manganese Chrome

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SLIDE 12

H1 FY19 Results Presentation

  • LTIFR down from 0.23 to 0.18
  • Headline Earnings down 26% y/y to

R327m (FY18: R875m)

  • Chrome Ore production up 7% y/y; but

sales down 5% y/y due to logistical challenges

  • US$ market price (44% Cr) down 10% y/y,

but less volatile

  • Unit production cost up 17% y/y
  • Capex up 77% y/y to R214m (H1 FY18:

R121m) due to spend for productivity improvement and compliance

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Dwarsrivier Chrome - Negatively impacted by logistics and prices

Dwarsrivier Chrome Ore Production (mt)

1.1 1.2 1.4 1.6 0.8 0.0 0.2 0.4 0.6 0.8 1.0 1.2 1.4 1.6 1.8 FY15 FY16 FY17 FY18 H1 FY19

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SLIDE 13

H1 FY19 Results Presentation

Outlook

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  • Global economy expected to be weaker in 2019
  • Impact of potential US/China “trade war” still hard to quantify
  • Chinese economy slowing but (as usual) stimulus likely to provide a buffer
  • Positive impact of Chinese environmental restrictions continues
  • Demand for high quality raw materials expected to remain strong
  • Iron Ore price rise and weaker R/US$ augur well for full year FY19 performance
  • Management focussed on streamlining and modernising the business
  • Actively looking for appropriate, value-accretive, growth opportunities
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SLIDE 14

Questions & Answers

Beeshoek Mine

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SLIDE 15

H1 FY19 Results Presentation

Units H1 FY19 H1 FY18 y/y

Production Volumes Iron Ore Manganese Ore Manganese Alloys Chrome Ore mt mt kt kt 8.7 1.7 194 765 9.1 1.9 190 717 (4%) (7%) 2% 7% Sales Volumes Iron Ore Manganese Ore* Manganese Alloys Chrome Ore mt mt kt kt 8.8 1.6 164 757 9.1 1.6 162 794 (4%) 3% 1% (5%)

Production & Sales Volumes (100%)

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*Excluding intergroup sales to Cato Ridge Works

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SLIDE 16

H1 FY19 Results Presentation

Iron Ore Price (62% Fe CFR China)

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20 40 60 80 100 Jul-16 Aug-16 Sep-16 Oct-16 Nov-16 Dec-16 Jan-17 Feb-17 Mar-17 Apr-17 May-17 Jun-17 Jul-17 Aug-17 Sep-17 Oct-17 Nov-17 Dec-17 Jan-18 Feb-18 Mar-18 Apr-18 May-18 Jun-18 Jul-18 Aug-18 Sep-18 Oct-18 Nov-18 Dec-18 US$/t H1 FY18 = US$68.15 H1 FY19 = US$69.18

Source: Platts

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SLIDE 17

H1 FY19 Results Presentation

Iron Ore Lump Premium (65% Fe)

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  • 5

10 15 20 25 30 Jul-16 Aug-16 Sep-16 Oct-16 Nov-16 Dec-16 Jan-17 Feb-17 Mar-17 Apr-17 May-17 Jun-17 Jul-17 Aug-17 Sep-17 Oct-17 Nov-17 Dec-17 Jan-18 Feb-18 Mar-18 Apr-18 May-18 Jun-18 Jul-18 Aug-18 Sep-18 Oct-18 Nov-18 Dec-18 US$/t

H1 FY18 = US$15.03 H1 FY19 = US$20.49

Source: Platts

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SLIDE 18

H1 FY19 Results Presentation

Manganese Ore Price (44% Mn CIF China)

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0.00 2.00 4.00 6.00 8.00 10.00 Jul-16 Aug-16 Sep-16 Oct-16 Nov-16 Dec-16 Jan-17 Feb-17 Mar-17 Apr-17 May-17 Jun-17 Jul-17 Aug-17 Sep-17 Oct-17 Nov-17 Dec-17 Jan-18 Feb-18 Mar-18 Apr-18 May-18 Jun-18 Jul-18 Aug-18 Sep-18 Oct-18 Nov-18 Dec-18 US$/mtu

H1 FY18 = US$6.30 H1 FY19 = US$7.02

Source: Metal Bulletin

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SLIDE 19

H1 FY19 Results Presentation

Manganese Alloy Price (HCFeMn)

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200 400 600 800 1000 1200 1400 1600 Jul-16 Aug-16 Sep-16 Oct-16 Nov-16 Dec-16 Jan-17 Feb-17 Mar-17 Apr-17 May-17 Jun-17 Jul-17 Aug-17 Sep-17 Oct-17 Nov-17 Dec-17 Jan-18 Feb-18 Mar-18 Apr-18 May-18 Jun-18 Jul-18 Aug-18 Sep-18 Oct-18 Nov-18 Dec-18 US$/t

H1 FY18 = US$1443 H1 FY19 = US$1244

Source: CRU

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SLIDE 20

H1 FY19 Results Presentation

Chrome Ore Price (44% Cr Concentrate CFR China)

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100 200 300 400 500 Jul-16 Aug-16 Sep-16 Oct-16 Nov-16 Dec-16 Jan-17 Feb-17 Mar-17 Apr-17 May-17 Jun-17 Jul-17 Aug-17 Sep-17 Oct-17 Nov-17 Dec-17 Jan-18 Feb-18 Mar-18 Apr-18 May-18 Jun-18 Jul-18 Aug-18 Sep-18 Oct-18 Nov-18 Dec-18 US$/t

H1 FY18 = US$207 H1 FY19 = US$186

Source: CRU

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SLIDE 21

H1 FY19 Results Presentation

Marketing & Shipping

  • Commissions in line with Assmang revenue
  • Significant interest income

Other Operations

  • Wonderstone - Renewal study underway

IronRidge Resources (AIM: IRR)

  • Assore now has a ~31% stake following November 2018 capital raise
  • Listed on AIM with ~£60m current market cap
  • Promising exploration work at Cape Coast lithium project in Ghana

Other Segments

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