Stanmore Resources (SMR) H2 2021 earnings summary

Executive summary

• 2021 was a transition year, with the shift to Isaac Downs progressing and an agreement reached to acquire an 80% interest in BMC; completion was targeted for mid-CY22.

• The combined business was positioned for annualised metallurgical coal production of 12.5Mt and 331Mt of coal reserves, on the stated 100% consolidated basis and excluding Millennium from reserves.

Financial highlights

• FY21 underlying EBITDA was A$54.4m vs A$24.0m in CY20; operating cash flow was A$127m vs negative A$28m in CY20.

• Profit for the period was A$10.4m vs a loss of A$8.1m; basic EPS was 3.9 cents vs negative 3.0 cents.

• Saleable coal production was 2,070kt; FY21 FOB cash cost was A$104/t sold excluding royalties, with H2 at A$87/t vs H1 at A$114/t.

Outlook and guidance

• FY22 priorities included reaching targeted Isaac Downs ROM capacity of 4.0Mtpa, supported by increased CHPP capacity, and ramping up Millennium and Mavis Downs toward 1Mtpa.

• Dragline transfer to Isaac Downs, lower strip ratios than Isaac Plains East, and completion of the highway underpass and flood levee were planned to support production growth.

• Millennium and Mavis Downs production was intended to provide baseload tonnage and cash flow ahead of a transition to underground mining in H2-2022.

• BMC integration priorities included establishing central functions and pursuing blending, Red Mountain CHPP access, and infrastructure synergies.