FY18 Results Presentation

Transcription

1 September 2018 Black Rock

2 Assore Executive Team Charles Walters Chief Executive Officer Ross Davies Chief Financial Officer Tiaan van Aswegen Executive: Operations Patrick Sacco Executive: Sales & Marketing Kieran Daly Executive: Growth & Strategic Development Bongani Phakathi Executive: HR & Corporate Affairs (effective 1 October 2018) 2

3 Assore Group Structure Boleng Trust Fricker Road Trust Assore Employee Trust Oresteel Investments Public (Free Float) 52.4% 14.3% 11.8% Assore Ltd 21.5% (ASR : JSE) 50% 100% 100% 100% ~29% Assmang Dwarsrivier Chrome Marketing & Shipping Other IronRidge (IRR: AIM) Iron Ore Khumani Mine Beeshoek Mine Dwarsrivier Chrome Mine Ore & Metal African Mining & Trust Minerais (51%) Wonderstone Zeerust Chrome RMDC (56%) Exploration (Africa / Australia) Manganese Ore Black Rock Complex (Gloria/Nchwaning) Manganese Alloys Cato Ridge Cato Ridge Alloys (50%) Sakura (54%) Machadodorp 3

4 FY18 Group Highlights Revenue 8% 12% R7 805m Profit After Tax (pre-assmang) R1 667m Attributable Earnings 2% 2% R5 119m Headline Earnings R5 109m 2% HEPS R % DPS R22.00 Free Cash Flow 29% 56% R4 754m Net Cash (excluding Assmang) R7 865m 4

5 FY18 Group Highlights Overall improvement in safety (one fatality at Sakura) HEPS down 2% y/y to R49.53; EPS up 2% to a record R49.63 Record production & sales volumes in Iron Ore and Chrome Ore Most US$ market prices higher y/y; Chrome Ore price down y/y, but less volatile Strengthening of the R/US$ by 6% was a headwind Assmang (100%) headline earnings of R7.1bn down 5% y/y In Assmang, Manganese earnings up 64% y/y; Iron Ore down 23% y/y Net Cash increased to R7.9bn (FY17: R5.0bn; H1 FY18: R6.6bn) Final DPS of R12.00 takes full year to a record R22.00 R6.7bn Black Rock Expansion Project now ~90% complete 5

6 Key Drivers - Sales volumes & prices FY18 vs. FY17 30% 20% 19% 22% 25% 22% 10% 3% 7% 0% -10% -1% -6% -20% -30% -28% Market Market Price Volume Sales Market Market Price Volume Sales Market Market Price Volume Sales Market Market Price Volume Sales R/US$ R/US$ Price Volume Price Volume Price Volume Price Volume Iron Ore Manganese Ore Manganese Alloys Chrome Ore Exchange Rate Note: Market Prices & Sales Volumes per Slides

7 Headline Earnings - Dwarsrivier delivers again Rm FY14 FY15 FY16 FY17 FY18 Assmang Dwarsrivier Marketing & Shipping Other Assore 7

8 Headline Earnings - Manganese outperformed Iron Ore Rm * FY14 FY15 FY16 FY17 FY18 Iron Ore Manganese Chrome Other Assore * includes dividend received in Assmang upon its sale of Dwarsrivier to Assore (50% share) 8

9 Cash Flow - Net Cash increased by 56% y-o-y Rm Net Cash at end FY17 Operating CF (pre-wc) Working Capital Assmang Dividend Net Interest Net Additions/(Disposals) Tax Dividends Paid (net) Net Cash at end FY18 Net Cash at end FY17 Operating CF (pre-wc) Working Capital Assmang Dividend Net Interest Net Additions/ (Disposals) Tax Dividends Paid (Net) Net Cash at end FY18 9

10 Dividends - Payout ratio in line with the sector R/sh FY14 FY15 FY16 FY17 FY18 HEPS* DPS** *103m shares **140m shares 10

11 Assmang* - A strong production performance LTIFR down from 0.17 to 0.13 Headline Earnings down 5% y/y to R7.1bn (FY17: R7.4bn) Manganese 54% of earnings (FY17: 31%) Net Cash of R4.8bn (post-r6.0bn dividend) Iron Ore Khumani production of 14.7mt (+1% y/y) Beeshoek production of 3.9mt (+22% y/y) Unit production cost up 2% y/y (Khumani) Manganese Ore & Alloys Black Rock production up 21% y/y to 3.7mt Black Rock unit production cost up 16% y/y Contribution to Assmang Headline Earnings 100% 10% 90% 80% 70% 31% 54% 60% 50% 40% 30% 59% 20% 47% 10% Black Rock Expansion Project 90% complete; R2.7bn capex for Gloria Sakura produced 244kt (Nameplate: 216kt) 0% FY17 FY18 Iron Ore Manganese Chrome *All figures 100% Assmang basis 11

12 Dwarsrivier Chrome - Another record year LTIFR down from 0.20 to 0.19 Headline Earnings up 4% y/y to R875m (FY17: R843m) Record Chrome Ore production of 1.6mt (FY17: 1.4mt) Record Chrome Ore sales of 1.6mt (FY17: 1.3mt) Unit production cost down 1% y/y US$ market price (44%Cr) down 28% y/y, but less volatile Realised price only marginally down on mix and timing Capex of R300m (FY17: R141m) Free Cash Flow of over R1bn Dwarsrivier Chrome Ore Production (mt) FY14 FY15 FY16 FY17 FY18 12

13 Outlook US economy strong; but pressure on emerging markets Impact of potential trade war hard to quantify China increasing infrastructure spend to balance property weakness Positive impact of Chinese environmental restrictions expected to continue Demand for high quality raw materials expected to remain strong Stable prices so far in FY19; Chrome Ore under pressure Weakening R/US$ is a tailwind Draft Mining Charter 2018 discussions are ongoing Actively looking for appropriate, value-accretive, growth opportunities 13

14 Questions & Answers Beeshoek Mine

15 Production & Sales Volumes (100%) Units FY18 FY17 y/y Production Volumes Iron Ore Manganese Ore Manganese Alloys Chrome Ore mt mt mt mt % 21% 15% 16% Sales Volumes Iron Ore Manganese Ore* Manganese Alloys Chrome Ore mt mt mt mt % 7% 25% 22% *Excluding intergroup sales to Cato Ridge Works 15

16 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 Iron Ore Price (62%Fe CFR China) US$/t FY17 = US$69.53 FY18 = US$ Source: Platts 16

17 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 Iron Ore Lump Premium US$/t FY18 = US$ FY17 = US$ Source: Platts 17

18 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 Manganese Ore Price (44%Mn CIF China) US$/mtu FY18 = US$ FY17 = US$ Source: Metal Bulletin 18

19 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 Manganese Alloy Price (HCFeMn) US$/t FY18 = US$ FY17 = US$ Source: CRU 19

20 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 Chrome Ore Price (44%Cr Concentrate CFR China) US$/t FY17 = US$ FY18 = US$ Source: CRU 20

21 Other Segments Marketing & Shipping Profits in line with Assmang revenue Interest income Other Operations Zeerust & Rustenburg - sold for nominal value Wonderstone - improving product diversification IronRidge Resources Assore has a ~29% stake and 2 board seats Listed on AIM with ~GBP80 million current market cap Promising exploration drilling results at Cape Coast lithium project in Ghana 21