Company Overview Chairman's Address The Chairman reviewed a challenging 2020, highlighting the company's resilience through cost reduction and expressing confidence in future diversification - In 2020, the company faced three major challenges: the COVID-19 pandemic, a cyclical downturn in the coal market, and trade disruptions in Asia; despite weak coal prices, the company responded by improving operational efficiency31602 - The company's contributions to community groups and organizations reached AUD 2.2 million in 2020, a 38% year-on-year increase31602 - The company's future strategy includes seeking expansion and potential diversification beyond coal into other mineral, energy, or renewable energy projects32603 CEO's Address The CEO reported achieving all operating targets in a challenging 2020 through cost reduction and market diversification, despite a 26% drop in coal prices 2020 Key Operating and Financial Indicators | Indicator | 2020 | 2019 | | :--- | :--- | :--- | | Average Coal Realized Price | AUD 82/tonne | AUD 111/tonne (-26%) | | Operating Cash Cost | AUD 59/tonne | AUD 64/tonne | | Attributable Marketable Coal Production | 39.3 million tonnes | - | | Operating Cash Flow | AUD 605 million | - | | Year-end Cash Balance | AUD 637 million | - | | EBITDA | AUD 748 million | AUD 1.72 billion | | EBITDA Margin | 21% | 14% (2016) | - To counter Asian coal trade disruptions, the company successfully redirected sales to emerging markets, exporting to 19 countries in 202036607 - Significant investments in 2020 included acquiring an additional 10% stake in Moolarben and a USD 775 million financing arrangement with Yankuang Group for Watagan restructuring37608 Management Team The report introduces key management team members, including the Executive Director, CEO, and CFO, highlighting their extensive industry experience - Management changes in 2020 included the appointment of Mr. Zhang Ning as Executive Director, Vice Chairman, and Chairman of the Executive Committee, Mr. David Moult as CEO, and Mr. Su Ning as CFO414243 Business and Asset Portfolio The company holds a diversified portfolio of low-cost coal mining assets across Australia, detailing each mine's economic interest, production, and reserves 2020 Overview of Major Mine Assets (100% Basis) | Mine Name | Economic Interest | 2020 Marketable Production (million tonnes) | Marketable Reserves (million tonnes) | Implied Mine Life (years) | | :--- | :--- | :--- | :--- | :--- | | Moolarben | 95% | 19.7 | 201 | 10 | | Mount Thorley Warkworth | 82.9% | 11.9 | 188 | 16 | | Hunter Valley Operations | 51% | 12.0 | 640 | 53 | | Yarrabee | 100% | 3.0 | 37 | 12 | | Watagan (Ashton) | 100% | 1.8 | 11 | 6 | Financial and Operational Highlights The report highlights 2020's key financial and operational metrics, showing maintained operating margins through cost reduction despite lower coal prices, and a prudent dividend policy - In 2020, the company successfully reduced cash operating costs to counter declining average coal selling prices, aiming to maintain operating margins66 - 2020 operating EBITDA and margins were significantly higher than in 2016, reflecting five years of efficiency improvements despite similar coal prices3670 - After distributing over AUD 900 million in dividends in the prior two years, the company adopted a prudent dividend policy in 2020 due to market challenges70 Business Strategy The core strategy focuses on leveraging tier-one assets for robust cash flow, strict capital allocation for growth and debt reduction, and potential diversification beyond coal - The core strategy is to generate robust cash flow through efficient operations and strict capital allocation to support growth, debt reduction, and shareholder returns75 - The company is open to future growth, potentially diversifying into other mineral, energy, or renewable energy projects beyond coal75 Environmental, Social, and Governance (ESG) The company views ESG as fundamental to its success, outlining 2020 initiatives on climate change, mental health, and Indigenous heritage, and detailing its economic contributions to Australia - The company considers ESG crucial for business success, developing strategic ESG issues in 2020 including climate change, mental health, and Indigenous cultural heritage81 2020 Economic Contributions to Australia | Contribution Type | Direct Impact | Indirect & Total Impact | | :--- | :--- | :--- | | Value-Added Impact | AUD 2.9 billion | AUD 7.4 billion | | Employment Provided | ~4,300 | ~38,200 | | Wages & Salaries | AUD 656 million | AUD 2.9 billion | | Government Tax Contribution | AUD 506 million | - | - In 2020, the company donated AUD 2.2 million to 135 community groups through its support program, primarily for social and community (58%) and education and training (21%) initiatives8688 Board of Directors' Report Operating Review The operating review covers 2020's key activities, focusing on safety performance, community investment, and greenhouse gas emissions, which totaled 1.89 million tonnes CO2e - At 2020 year-end, the company's Total Recordable Injury Frequency Rate (TRIFR) was 7.4, outperforming the industry weighted average of 8.493 - Total Scope 1 and 2 greenhouse gas emissions for the period ended June 30, 2020, were 1.89 million tonnes of CO2 equivalent, a 3% change from the prior year95 Operations The company operates nine coal mines, exporting to Asia with ample port capacity, and holds brownfield expansion projects while remaining open to diversification into other energy projects - The company has ample infrastructure support, holding 30.0% and 27.0% stakes in PWCS and NCIG at Port of Newcastle, respectively, with a combined port allocation capacity exceeding 54 million tonnes per annum97 - Potential growth projects include a Warkworth underground mine with a potential annual production of 5 million tonnes, and Moolarben expansion approvals to increase run-of-mine annual production to 24 million tonnes98 Corporate Activities and Dividends In 2020, the company acquired an additional 10% stake in Moolarben for AUD 300 million, regained control of Watagan, and paid a 2019 final dividend of AUD 280 million, but declared no 2020 dividends due to market conditions - The company paid a final dividend of AUD 280 million in April 2020 but declared no interim or final dividends for 2020 due to challenging market conditions99 - A significant acquisition involved an additional 10% equity in Moolarben for AUD 300 million, increasing total ownership to 95% and generating an accounting gain of AUD 653 million100 - On December 16, 2020, the company regained accounting control of Watagan, with its financial results to be re-consolidated into the group's statements101 Directors' and Management Information This section details the background, qualifications, and committee roles of current directors and management, including their 2020 meeting attendance records - The report details each director's membership and chairmanship in the Audit and Risk Management, Nomination and Remuneration, Health Safety Environment Community, and Strategic Development committees as of December 31, 2020120 - The report discloses 2020 Board and committee meeting attendance, with 17 full Board meetings held during the year122 Remuneration Report Remuneration Report Overview The Remuneration Report reviews 2020's challenges, noting reduced executive pay due to market impacts on profit, and outlines 2021 framework adjustments to enhance individual accountability - Executive remuneration decreased from 2019 due to challenging market conditions and unmet pre-tax profit targets, resulting in reduced Short-Term Incentive (STI) payouts136 - The 2021 remuneration framework will introduce individual performance weighting for Short-Term Incentive outcomes to enhance individual accountability137 - The executive leadership team underwent structural changes in 2020, with new appointments to key positions including CEO, Chairman of the Executive Committee, and CFO135140 Remuneration Framework and Structure The executive remuneration framework, comprising FAR, STI, and LTI, aims for market competitiveness and shareholder alignment, with STI based on a balanced scorecard and LTI on long-term performance targets Executive Remuneration Structure | Remuneration Component | Form | Purpose and Assessment Basis | | :--- | :--- | :--- | | Fixed Annual Remuneration (FAR) | Cash salary, superannuation, etc. | Attract and retain talent, reflect role responsibilities | | Short-Term Incentive (STI) | 50% Cash + 50% Deferred Equity | Reward achievement of annual financial, operational, and strategic objectives, based on a balanced scorecard | | Long-Term Incentive (LTI) | Performance Share Rights | Reward and retain talent influencing long-term company performance, based on 3-year relative EPS and cost targets | 2020 Short-Term Incentive (STI) Scorecard Weightings | Key Performance Indicator (KPI) | Weight | | :--- | :--- | | Profitability | 60% | | (PBT 30%, Cash Cost 20%, ROM Tonnes 10%) | | | Health & Safety | 15% | | Strategic Objectives | 15% | | Environment | 10% | Remuneration and Company Performance Link This section details the link between remuneration and performance, noting that despite unmet profit targets, strong performance in other areas led to a 58.9% STI payout and partial LTI vesting - 2020 Short-Term Incentive (STI) results: Despite unmet pre-tax profit targets, strong performance in cost control, safety, and strategic objectives led to an overall scorecard achievement of 117.8%, with key management personnel receiving 58.9% of their maximum incentive opportunity167168 - 2018 Long-Term Incentive (LTI) vesting forecast: The 60% of awards linked to EPS are not expected to vest, while the 40% linked to cost targets are expected to vest 100%170 Statutory Remuneration Disclosure This section provides statutory disclosure of executive and non-executive director remuneration, detailing compensation components, fee structures, and changes in equity holdings 2020 Total Remuneration for Key Management Personnel | Name | Position | 2020 Total Remuneration (AUD) | | :--- | :--- | :--- | | Zhang Ning | Chairman of Executive Committee | 957,470 | | David James Moult | Chief Executive Officer | 3,468,786 | | Su Ning | Chief Financial Officer | 894,992 | - The total fee cap for non-executive directors is AUD 3.5 million per annum, with AUD 894,209 actually paid in 2020; non-executive directors nominated by major shareholders do not receive fees179180182 Management Discussion and Analysis (MD&A) Business Review The 2020 business review highlights a 26% drop in average coal selling prices due to global economic conditions, offset by a 7% increase in marketable production and reduced operating costs 2020 vs 2019 Production Comparison (Attributable Basis) | Coal Type | 2020 (million tonnes) | 2019 (million tonnes) | Change | | :--- | :--- | :--- | :--- | | Thermal Coal | 33.6 | 30.2 | +11% | | Metallurgical Coal | 5.7 | 6.7 | -15% | | Total | 39.3 | 36.9 | +7% | - The company's overall average mine-gate selling price decreased by 26% to AUD 82/tonne due to global coal price declines, with thermal coal at AUD 76/tonne and metallurgical coal at AUD 124/tonne192 - The COVID-19 pandemic significantly impacted coal prices, leading to a substantial decline in financial performance and cash flow, with mine-gate coal sales revenue decreasing by AUD 881 million (-26%)199 Financial Performance Review In 2020, the company reported a post-tax loss of AUD 1.04 billion, driven by reduced coal sales revenue and a AUD 1.383 billion non-cash loss from Watagan's re-consolidation, despite effective cost management 2020 Consolidated Statement of Profit or Loss Summary (million AUD) | Indicator | 2020 | 2019 | Change | | :--- | :--- | :--- | :--- | | Revenue | 3,473 | 4,459 | -22% | | Operating EBITDA | 748 | 1,654 | -55% | | Loss/Profit Before Income Tax | (1,143) | 767 | -249% | | Loss/Profit After Income Tax | (1,040) | 719 | -249% | | Basic Loss/Earnings Per Share (AUD cents) | (78.8) | 54.5 | -245% | - The significant performance decline was primarily due to reduced revenue from falling coal prices and a one-time non-cash loss of AUD 1.383 billion from Watagan's re-consolidation202 - The company achieved effective cost control, reducing cash operating costs per tonne of marketable coal (excluding royalties) from AUD 64 in 2019 to AUD 59215 Cash Flow Analysis In 2020, net operating cash inflow decreased by 61% to AUD 605 million, with net investing outflow of AUD 591 million and financing outflow of AUD 314 million, resulting in a net decrease of AUD 300 million in cash 2020 Cash Flow Summary (million AUD) | Cash Flow Type | 2020 (million AUD) | 2019 (million AUD) | | :--- | :--- | :--- | | Net Cash from Operating Activities | 605 | 1,548 | | Net Cash from Investing Activities | (591) | (392) | | Net Cash from Financing Activities | (314) | (1,209) | | Net Increase/(Decrease) in Cash | (300) | (53) | Financial Position and Liquidity As of year-end 2020, total assets were AUD 11.055 billion, with net debt increasing to AUD 3.568 billion and gearing to 41% due to Watagan's re-consolidation 2020 Year-End Financial Position (million AUD) | Indicator | December 31, 2020 (million AUD) | December 31, 2019 (million AUD) | | :--- | :--- | :--- | | Total Assets | 11,055 | 11,093 | | Total Liabilities | 5,862 | 4,930 | | Total Equity | 5,193 | 6,163 | | Net Debt | 3,568 | 2,536 | | Gearing Ratio | 41% | 29% | - The gearing ratio increased from 29% to 41%, primarily due to Watagan's re-consolidation leading to increased interest-bearing debt234 Significant Investments and Capital Expenditures In 2020, capital expenditure was AUD 279 million, with a significant investment of AUD 300 million to acquire an additional 10% interest in Moolarben, while pursuing internal growth and external acquisitions - 2020 capital expenditure cash flow was AUD 279 million, primarily for investments in property, plant, and equipment237 - The company completed the acquisition of a 10% interest in the Moolarben joint venture for AUD 300 million, funded by operating cash flow and Hong Kong listing proceeds237 Financial Statements Auditor's Independence Declaration The auditor, ShineWing Australia, declared no contraventions of independence requirements or professional ethical standards during the 2020 audit - Auditor ShineWing Australia confirmed its independence in the 2020 financial year audit, adhering to relevant regulations and professional ethical standards190761 Consolidated Statement of Profit or Loss and Other Comprehensive Income The statement shows a swing from profit to a AUD 1.04 billion post-tax loss in 2020, driven by falling coal prices and a one-time non-cash loss 2020 Consolidated Statement of Profit or Loss Key Data (million AUD) | Indicator | 2020 | 2019 | | :--- | :--- | :--- | | Revenue | 3,473 | 4,459 | | Loss/Profit Before Income Tax | (1,143) | 767 | | Loss/Profit After Income Tax | (1,040) | 719 | | Total Comprehensive (Expense)/Income | (688) | 841 | Consolidated Statement of Financial Position The statement shows total assets of AUD 11.055 billion and total liabilities of AUD 5.862 billion as of December 31, 2020, with total equity decreasing to AUD 5.193 billion 2020 Year-End Consolidated Statement of Financial Position Key Data (million AUD) | Indicator | December 31, 2020 (million AUD) | December 31, 2019 (million AUD) | | :--- | :--- | :--- | | Total Assets | 11,055 | 11,093 | | Total Liabilities | 5,862 | 4,930 | | Net Assets | 5,193 | 6,163 | Consolidated Statement of Changes in Equity The statement details changes in shareholders' equity, which decreased from AUD 6.163 billion to AUD 5.193 billion due to comprehensive expenses and dividends - Shareholders' equity decreased from AUD 6.163 billion at year-start to AUD 5.193 billion at year-end, primarily due to AUD 688 million in total comprehensive expense and AUD 280 million in dividends paid243814 Consolidated Statement of Cash Flows The statement summarizes 2020 cash flows, with net operating inflow of AUD 605 million, net investing outflow of AUD 591 million, and net financing outflow of AUD 314 million, resulting in a net cash decrease of AUD 300 million 2020 Consolidated Statement of Cash Flows Summary (million AUD) | Item | 2020 (million AUD) | | :--- | :--- | | Net Cash Inflow from Operating Activities | 605 | | Net Cash Outflow from Investing Activities | (591) | | Net Cash Outflow from Financing Activities | (314) | | Net Decrease in Cash and Cash Equivalents | (300) | | Year-End Cash and Cash Equivalents | 637 | Notes to the Consolidated Financial Statements The notes provide detailed explanations and supplementary information on the basis of preparation, accounting policies, estimates, performance, assets, liabilities, capital structure, and group structure B. Performance This section details performance, including segmental data, revenue composition by market and product, expenses, and remuneration for key management and highest-paid employees 2020 Coal Sales Revenue by Region (million AUD) | Major Regional Market | 2020 Revenue (million AUD) | 2019 Revenue (million AUD) | | :--- | :--- | :--- | | Japan | 683 | 1,139 | | Singapore | 610 | 465 | | China | 455 | 683 | | South Korea | 413 | 546 | | Taiwan | 385 | 533 | | Australia | 338 | 453 | C. Operating Assets and Liabilities This section details major operating assets and liabilities, including property, plant, and equipment, mining rights, and intangible assets, with a focus on impairment testing assumptions for future coal prices and exchange rates - Key assumptions for long-term asset impairment testing include: long-term thermal coal prices of USD 57-103/tonne, metallurgical coal prices of USD 103-177/tonne, an AUD/USD exchange rate of 0.75, and a 10.5% post-tax discount rate300302 D. Capital Structure and Financing This section details capital structure, financing activities, and financial risk management, covering interest-bearing debt, equity, dividends, and analysis of market, credit, and liquidity risks 2020 Year-End Interest-Bearing Debt Composition (million AUD) | Debt Type | Amount (million AUD) | | :--- | :--- | | Bank Loans | 2,019 | | Bonds | 1,006 | | Unsecured Loans from Related Parties | 1,059 | | Lease Liabilities | 121 | | Total | 4,205 | E. Group Structure This section outlines the group structure and significant 2020 changes, including acquiring an additional 10% Moolarben interest and re-consolidating Watagan, which resulted in a AUD 1.383 billion non-cash loss - After acquiring an additional 10% interest in Moolarben, the company gained accounting control and recognized a bargain purchase gain of AUD 653 million414416 - The re-consolidation of the Watagan Group on December 16, 2020, resulted in a one-time non-cash loss of AUD 1.383 billion from this business combination419420 Directors' Declaration The Board declares the 2020 financial statements comply with regulations, fairly reflect the Group's position, and confirms the company's ability to pay debts, supported by CEO and CFO declarations - The Board confirms the financial statements are true and fair, and the company has the ability to continue as a going concern483 Audit and Governance Independent Auditor's Report Independent auditor ShineWing Australia issued an unmodified opinion on the 2020 financial statements, identifying key audit matters including Watagan's re-consolidation, Moolarben acquisition, and long-term asset recoverability - The auditor issued an unmodified audit opinion on the 2020 financial statements485 - Key audit matters include Watagan re-consolidation, acquisition of additional Moolarben equity, long-term asset recoverability, valuation of interest in Zhongshan Coal Mine, and tax treatments486487488 Corporate Governance Report This report outlines the corporate governance framework, detailing Board structure, independence, committee roles, risk management, and other key practices, noting non-compliance with ASX independence recommendations - The Board comprises 9 directors, including 3 independent non-executive directors; the Chairman and most members are not considered independent due to controlling shareholder nominations, not fully complying with ASX Recommendations 2.4 and 2.5493501 - The company has four standing Board committees: Audit and Risk Management, Health Safety Environment Community, Nomination and Remuneration, and Strategic Development, to assist the Board504 - The company has a comprehensive risk management framework, overseen by the Audit and Risk Management Committee, identifying significant operational, regulatory, environmental, geopolitical, and financial risks516518 Other Disclosures Related Party Transactions This section details 2020's ongoing related party transactions with controlling shareholders and associates, covering coal sales, purchases, and financing, confirming adherence to normal commercial terms 2020 Overview of Major Related Party Transactions | Transaction Type | Counterparty | Annual Cap (USD) | Actual Transaction Amount (USD) | | :--- | :--- | :--- | :--- | | Coal Sales | Yankuang Group | 250 million | Approx. 53.2 million | | Coal Sales | Yankuang International Trade | 93 million | Approx. 13.7 million | | Coal Sales | Glencore | 350 million | Approx. 142.2 million | | Coal Sales | POSCO | 600 million | Approx. 163 million | | Coal Purchases | Yankuang Group | 65 million | Approx. 3.5 million | | Coal Purchases | Glencore | 350 million | Approx. 62.5 million | Coal Reserves and Resources The report discloses 2020 JORC-compliant coal resources and reserves, showing attributable total resources of 6.884 billion tonnes and marketable reserves of 833 million tonnes, with slight decreases from the prior year Coal Reserves and Resources Changes (Attributable Basis) | Item | 2020 (million tonnes) | 2019 (million tonnes) | Change | | :--- | :--- | :--- | :--- | | Coal Resources | 6,884 | 6,911 | -0.4% | | Recoverable Reserves | 1,154 | 1,196 | -3.5% | | Marketable Reserves | 833 | 872 | -4.5% | Shareholding Data This section provides shareholding structure information as of March 3, 2020, showing controlling shareholder Yankuang Energy holding 62.26% and the top three shareholders collectively holding over 84% - As of March 3, 2020, the major shareholder was Yankuang Energy Group Co., Ltd., with a 62.26% stake; the top 20 shareholders collectively held approximately 99.32% of the shares561
兖煤澳大利亚(03668) - 2020 - 年度财报