Microsoft PowerPoint - 20150824 Financial Results RevG
INDEPENDENCE GROUP NL
FULL YEAR RESULTS PRESENTATION
24 August 2015
Cautionary Notes and Disclaimer
This presentation has been prepared by Independence Group NL ('IGO') (ABN 46 092 786 304). It should not be considered as an offer or invitation to subscribe for or purchase any securities in IGO or as an inducement to make an offer or invitation with respect to those securities in any jurisdiction.
This presentation contains general summary information about IGO. The information, opinions or conclusions expressed in the course of this presentation should be read in conjunction with IGO's other periodic and continuous disclosure announcements lodged with the Australian Stock Exchange (ASX), which are available on the IGO website. No representation or warranty, express or implied, is made in relation to the fairness, accuracy or completeness of the information, opinions and conclusions expressed in this presentation.
This presentation includes forward looking information regarding future events, conditions, circumstances and the future financial performance of IGO. Often, but not always, forward looking statements can be identified by the use of forward looking words such as 'may', 'will', 'expect', 'intend', 'plan', 'estimate', 'anticipate', 'continue' and 'guidance', or other similar words and may include statements regarding plans, strategies and objectives of management, anticipated production or construction commencement dates and expected costs or production outputs. Such forecasts, projections and information are not a guarantee of future performance and involve unknown risks and uncertainties, many of which are beyond IGO's control, which may cause actual results and developments to differ materially from those expressed or implied. Further details of these risks are set out below. All references to future production and production guidance made in relation to IGO are subject to the completion of all necessary feasibility studies, permit applications and approvals, construction, financing arrangements and access to the necessary infrastructure. Where such a reference is made, it should be read subject to this paragraph and in conjunction with further information about the Mineral Resources and Ore Reserves, as well as any Competent Persons' Statements included in periodic and continuous disclosure announcements lodged with the ASX. Forward looking statements in this presentation only apply at the date of issue. Subject to any continuing obligations under applicable law or any relevant stock exchange listing rules, in providing this information IGO does not undertake any obligation to publically update or revise any of the forward looking statements or to advise of any change in events, conditions or circumstances on which any such statement is based.
There are a number of risks specific to IGO and of a general nature which may affect the future operating and financial performance of IGO and the value of an investment in IGO including and not limited to economic conditions, stock market fluctuations, commodity demand and price movements, access to infrastructure, timing of environmental approvals, regulatory risks, operational risks, reliance on key personnel, reserve and resource estimations, native title and title risks, foreign currency fluctuations and mining development, construction and commissioning risk. The production guidance in this presentation is subject to risks specific to IGO and of a general nature which may affect the future operating and financial performance of IGO.
Any references to Mineral Resource and Ore Reserve estimates should be read in conjunction with IGO's 2014 Mineral Resource and Ore Reserve announcement dated 28 August 2014 (excluding Stockman Ore Reserves) and Stockman Optimisation Study announcement dated 28 November 2014 (updated Stockman Ore Reserves), and lodged with the ASX, which are available on the IGO website.
Any references to Mineral Resource and Ore Reserve estimates for Sirius Resources NL ('Sirius' or 'SIR') should be read in conjunction with SIR's ASX
announcement dated 14 July 2014.
All currency amounts in Australian Dollars (AUD) unless otherwise noted.
Cash Costs are in AUD and reported inclusive of royalties and after by-product credits on per unit of payable metal basis.
IGO reports All-in Sustaining Costs (AISC) per ounce of gold in AUD for its 30% interest in the Tropicana Gold Mine using the World Gold Council guidelines for AISC. The World Gold Council guidelines publication was released via press release on 27th June 2013 and is available from the World Gold Council's website.
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Business Highlights
Record year in terms of revenue and operating cash flow
Significant growth in dividend reflecting the robustness of the diversified business
All operations succeeded in meeting or beating all production and cash cost guidance
Tropicana has performed, and will continue performing, as a tier one Global asset in terms of cost, grade and cash flow generation
Exploration success demonstrating ability to continue to replace reserves and grow mine life
Announcement of acquisition of Sirius Resources NL (SIR) with the endorsement of major shareholder, Mark Creasy
Aligns with stated strategy of growing a portfolio of tier one assets, leveraging dominant land positions and control of key infrastructure
Replacement financing package in place delivering savings relative to the original Nova package
3
Safety Highlights
Significant improvement over the past 1-2 years is a credit to our people
16 50
45
14
40
12
35
10
30
8 25
20
6
15
4
12 Mthly Rolling LTIFR 12 Mthly Rolling TRIFR 10
2
5
0 0
Jul 13 Oct 13 Jan 14 Apr 14 Jul 14 Oct 14 Jan 15 Apr 15 Jul 15
(1) LTIFR is lost time injury frequency rate expressed in number of injuries per million man-hours worked
(2) TRIFR is total recordable injury frequency rate expressed in number of injuries per million man-hours worked
4
Financial Highlights
Revenue increased by 25% to $499M, a record for IGO
Underlying EBITDA(1)increased by 44% to $213M
Net Profit After Tax increased by 58% to $77M
Net cash flows from operating activities increased by 57% to $202M, a record for IGO
Net cash (cash equivalents and debt) improved 332% to $121M as at
30 June 2015
Total fully franked dividends paid during FY15 were up 175% to 11 cents per share
Final Dividend pool of $13M established with a record date to be set to a date no later than 30 September 2015
In line with dividend policy = pay minimum 30% of NPAT
Combined FY15 interim payment of $14M and FY15 final pool of
$13M equates to 35% of FY15 NPAT
Minimum surplus franking balance of $42M available for distribution with future dividends
(1) Underlying EBITDA is a non-IFRS measure and comprises net profit or loss after tax, adjusted to exclude tax expense, finance costs, interest income, asset impairments, depreciation and amortisation.
5
Earnings Summary
Net Profit After Tax ($M)
90
80
70
60
50
40
30
20
10
0
600
500
400
300
200
100
0
250
200
150
100
50
Revenue ($M)
FY13 FY14 FY15
Underlying EBITDA ($M)
-10
FY13 FY14 FY15
0
FY13 FY14 FY15
6
Cash Flow Summary
150
Free Cash Flow ($M)
250
Operating Cash Flow ($M)
100
200
150
100
50
50
0 0
FY13 FY14 FY15
-50
-100
-150
-200
FY13 FY14 FY15
140
120
100
80
60
40
20
0
Net Cash ($M)
FY13 FY14 FY15
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Summary Income Statement ($M)
58% increase in Net Profit after tax
59% higher Tropicana and 16% higher Jaguar contribution offset by 6% lower nickel revenue
Consistent 50% gross profit margin ratio
Foreign exchange gains - more favourable
AUD in FY15
Full year D&A charge at Tropicana
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NPAT Analysis ($M)
Full year of production at Tropicana and better AUD metal prices underpinned higher NPAT
160
140
120
100
80
78.9
17.6 (37.4)
(32.6)
(0.6) 1.0 2.6 2.2
4.4 (11.1)
1.7 1.5
76.8
60
48.6
40
20
-
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Underlying EBITDA Components ($M)
Tropicana and Jaguar delivered higher underlying EBITDA
140
135.3
120
FY15 $212.7M FY14 $147.9M
100
80
60
84.9
55.1
61.4
67.5
52.5
40
20
-
(20)
(9.5)
(10.4) (6.9)
(40)
(31.4)
(33.5)
(60)
Tropicana Long Jaguar Exploration & Evaluation
Corporate Other
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Summary Balance Sheet ($M)
Balance sheet is strong with debt facilities undrawn
ASSETS
June 2015 June 2014
Cash growth of $64M after debt payments of
Cash and cash equivalents 121.3 57.0
Receivables 22.1 30.1
Inventories 65.3 49.2
Investments/exploration assets 125.5 112.4
Mine property plant & equipment 350.5 376.5
Deferred tax asset 130.5 152.4
Derivative financial Instruments 5.0 3.2
Total Assets 820.2 780.8
LIABILITIES
Creditors 45.1 46.9
Borrowings 0.5 28.3
Derivative financial instruments 3.1 6.4
Provisions 32.0 28.1
Deferred tax liability 74.0 61.6
Total Liabilities 154.7 171.3
NET ASSETS 665.5 609.5
$28M and Dividend payments of $26M
Growth in lower grade stockpiles at Tropicana
Includes 4.9% investment in Gold Road
Revolving credit facility paid off in FY15
11