NRW Holdings Limited (ASX:NWH) FY2014 Full Year Results 20th August 2014 1
FINANCIAL OVERVIEW • Revenue of $1.1 billion • EBITDA – $123.0M, 10.8% of Revenue • EBIT of $65.5M; NPAT of $44.2M • Strong cash position of $155.5M • Net Debt – $34.0M a reduction of $54.6M • Order book maintained at $1.0 billion • Final fully franked dividend – 5 cents per share (9 cents for the full year) – Payout ratio 57.0% Roy Hill Rail Project Section 4 • Net Debt / Equity at 9.1% 2 2
OPERATIONAL OVERVIEW • Awarded largest ever civil contract by Samsung C&T at the Roy Hill Project ($620 million) – 50% complete as at June 14 • Awarded $200 million concrete and civil package for the Roy Hill minesite • Awarded Ore Car Repair Shop civil earthworks contract for BHP Billiton • Action Drill & Blast awarded three year contract for drill and blast operations at the Middlemount Coal Mine in Queensland • Awarded early works contract at Fortescue's Iron Bridge Project in joint venture with Njamal ICRG JV Pty Ltd • Continued Improvement of Group Safety performance: (TRIFR at 2.36 end June 14) 3 3 Footings for a conveyor at the Roy Hill Concrete Works Package .
SAFETY, HEALTH & ENVIRONMENT • Continued improvement and focus on safety performance across the business, sustaining a positive trend. • The “A Safe Day. Every Day” Program has been refreshed with increased focus on the quality of the leading indicators. • TRIFR currently at an industry leading 2.36 (June 14), a significant improvement from 5.47 at the same time last year. • LTIFR currently at 0.17 (June 14), an improvement from 0.55 at June 13. • Established The 5 Golden Rules determined by historical industry incidents which form the basis of a minimum standard of safety behaviour. 14 12 10 Frequency rates 8 6 4 2 0 FY11 FY12 FY13 FY14 LTIFR TRIFR 4 4
PEOPLE • As of the end of June 2014 NRW employed a workforce of 3,092 (compared to 2,283 end June 13) • Key achievements in the year include: – Successful mobilisation of workforce to Roy Hill Rail and Concrete Projects. – Improved mobilisation system and reduced training expenditure during pre-mobilisation – Maintained minimal labour hire/agency usage • Maintained an industry leading 8% Indigenous participation (almost double the industry average of 4.2%*) and high retention rates. – 4 Powerup Programs completed for Roy Hill Rail Project. 5 5 *CME Discovery Newsletter, 20 November 2013.
Business unit performance Financial Overview 6
SUMMARY FINANCIALS • Revenue in line with FY14 guidance • EBITDA margin at 10.8% compared to 12.1% reflects more competitive market • Impairment (AMS) relates to downturn in client Opex and lower product sales • Interest costs slightly lower – Debt mostly fixed over 4 to 5 years • Effective tax rate at 14% includes credits received in the first half. 7 7
CASHFLOW $m's 60 Nebt Debt Movement - FY14 • Improved Net debt from $88.6M to 40 $34.0M • Full conversion of EBITDA ($123.0M) into operating cashflow 20 (29.6) • Capex spend – $29.6M reflects 2.3 completion of current investment 0 (21.2) 123.0 cycle • Systems development (34.0) -20 (20.0) • Buy out of expensive operating leases -40 (88.6) • Business critical equipment -60 • Gearing ratio at 9.1% • Other movements include -80 equipment disposals ($5.1M) -100 Nebt debt EBITDA CAPEX Working Net Dividends Net debt FY13 capital interest & & Other FY14 Tax 8 8
BALANCE SHEET Net Tangible Assets - June 14 400.0 Strong balance sheet with increasing value of 350.0 18.9 cash and net owned equipment. • Net Tangible Assets per share of $1.22 300.0 cents 189.5 250.0 • Cash Balances provide risk mitigation and 155.5 allow fast response to changing market 200.0 • Funding access to support growth 354.8 339.6 • Available undrawn asset 150.0 financing – $71M • Undrawn bonding at circa 100.0 165.3 $72M 50.0 • Undrawn working capital $35M • Balance sheet and debt equity position - support dividend payout ratio increase to Property, Debt Cash at Working Net tangible 57% − Final Dividend declared at Plant & bank capital assets Equipment 5 cents per share fully franked Net value of owned equipment 9 9
Business unit performance Business Unit Performance 10
CIVIL DIVISION 11
CIVIL Highlights $m’s $m’s • Continued improvement in safety performance – 1,000.0 160 TRIFR to 2.1 (previously 2.5 at June 13) 842.3 860.6 900.0 140 • Revenue similar level to FY13, Margin at 7.1% 800.0 120 reflects more competitive market 700.0 92.0 100 • Secured a $620M contract for the Roy Hill Rail 600.0 Project to construct approximately 330 kilometres of 500.0 80 main line heavy haul rail formation and associated 59.8 400.0 60 works. 10.7% 300.0 9.8% 10.8% 7.1% 40 • Growth on existing contracts 200.0 20 Looking Forward 100.0 - 0 • Delivery of Roy Hill Concrete Package for the Iron ore FY 14 FY 13 FY 14 FY 13 processing facility – contract awarded in April Revenue EBIT ($200M) • Successful delivery of Roy Hill Rail Revenue Contribution • Build on relationships with Blue Chip Miners • Tendering NPI prospects • Bidding government infrastructure projects in JV 72% 12 12
MINING DIVISION 13
MINING Highlights $m’s $m’s 450.0 60 • 404.5 Revenue impacted by major client transitioning to 400.0 dry hire during 2013 and higher activity in the first 50 350.0 half of FY13 40 300.0 • Awarded contract for ERA at Ranger 250.0 30 186.9 200.0 • Awarded Iron Bridge bulk earthworks for Fortescue 17.9 150.0 20 13.1 100.0 Looking Forward 10 5.5% 4.4% 7.8% 50.0 7.0% • - 0 Market conditions expected to remain competitive FY 14 FY 13 FY 14 FY 13 during FY15 Revenue EBIT • Tendering opportunities in base metals for mid-tier Miners Revenue Contribution • Full utilisation of existing mining fleet capable of delivering an additional ~ $150M revenue pa 16% 14
ACTION DRILL & BLAST 15
ACTION DRILL & BLAST Highlights • Revenue at $110M reflects downturn in market and reduced civil drill & blast activity $m’s $m’s 150.5 160.0 30 • Margins impacted by lower revenues and asset 140.0 utilisation 25 120.0 110.0 • Awarded a three year contract valued at $60M for drill 20 100.0 16.8 and blast operations at the Middlemount Coal Mine in 80.0 15 Queensland. 60.0 • 11.2% Awarded a three year contract valued at $11M for 10 2.3% 7.0 40.0 Talison Lithium Greenbushes Mine in WA 15.3% 5 6.4% 20.0 - 0 Looking Forward FY 14 FY 13 FY 14 FY 13 • Current market remains very competitive Revenue EBIT • Opportunities under review include both Domestic and Revenue Contribution Overseas projects • Focus on smaller mining contracts for underutilised civil 9% drill fleet 16 16
ACTION MINING SERVICES 17
ACTION MINING SERVICES Highlights $m’s $m’s 45.0 45 41.8 • Revenue and results impacted by significant 40.0 40 maintenance expenditure cut-backs 35.0 35 • Restructure and reduction in overhead costs 28.0 30.0 30 25.0 25 20.0 20 Looking Forward 15.0 15 • Strategic review undertaken resulting in: 10.0 10 • Expanded business model approved to increase 3.3 5.0 5 (2.9)% revenue and profit opportunities 7.9% - 0 • Focus on employee and customer engagement to (0.8) (5.0) -5 drive strategic agenda FY 14 FY 13 FY 14 FY 13 Revenue EBIT • Market conditions are expected to remain subdued near term • In the medium term the equipment maintenance cycle is Revenue Contribution expected to recover 2% 18 18
Business unit performance Tender Pipeline & Summary 19
TENDER PIPELINE • Order book maintained at $1 billion following award of Roy Hill Rail and Roy Hill Concrete Package contracts and various contract extensions in FY14 • Secured work for delivery in FY15 circa $0.7 billion Work in Hand – Delivery Profile • $ billions Robust Tendering activity valued at $2.4 billion: 1.2 • Civil $0.9b • Mining $1.0b 1 • Drill & Blast $0.2b • 0.8 International $0.3b • 0.7 In addition $1b to $2b of new resource related rail 0.6 infrastructure works anticipated to be tendered 1.0 during FY15 0.4 0.2 0.3 0 Total WIH FY15 FY16 + 20 20
OUTLOOK • Although the industry continues to face some headwinds, NRW is well placed commencing FY15 with a strong balance sheet and solid order book of $1 billion. • The Group’s balance sheet, funding facilities and solid cash position provide a strong foundation for future organic growth and to continue to review potential acquisitions or to implement Capital Management program. • Continuing investigation of sectors that are not directly correlated to the mining industry (e.g. energy, infrastructure). • Ongoing focus on cost management programs, efficiencies and continuous improvement processes. • Revenues in FY15 which remain dependent on the timing of new work are expected to be between $1.0b to $1.2b of which circa $0.7b is currently in the order book. 21 21
FY14 PROJECT LOCATIONS 22
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