OM : FY2021 NET PROFIT AFTER TAX $81.9 million Dividend 2cps

OM HOLDINGS LIMITED

(ARBN 081 028 337)

(Malaysian Registration No. 202002000012 (995782-P))

Incorporated in Bermuda

For personal use only

No. of Pages Lodged: 9	Covering letter
13	ASX Appendix 4E - Preliminary Final Report
28 February 2022
ASX Market Announcements
ASX Limited
4th Floor
20 Bridge Street
SYDNEY NSW 2000
Dear Sir/Madam

The Board of OM Holdings Limited ("OMH", or the "Company", and together with its subsidiaries (the "Group"), is pleased to provide the financial results of the Group for the year ended 31 December 2021. A copy of the Group's Appendix 4E for the financial year ended 31 December 2021 is attached to this announcement.

HIGHLIGHTS

• Net profit after tax attributable to owners of the Company for the year ended 31 December 2021 ("FY2021") of A$81.9 million as compared to A$5.4 million for the year ended 31 December 2020 ("FY2020").
• Earnings Before Interest, Tax, Depreciation and Amortisation ("EBITDA") of A$204.0 million for FY2021 compared with A$78.0 million for FY2020.
• Basic and diluted earnings per ordinary share of the Group of 11.11 cents for FY2021 as compared to 0.73 cents FY2020.
• Revenue from operating activities for FY2021 was A$1.04 billion, representing a 33% increase over FY2020. This increase was primarily attributed to higher total manganese ore and manganese alloys (mainly silicomanganese ("SiMn")) volumes traded in FY2021, coupled with the increase in ferroalloy prices for the year.
• Gross profit margin doubled to 26.4% in FY2021, up from 12.3% in FY2020. This was predominantly attributed to stronger ferroalloy prices.
• The Group's share of results from its associates for FY2021 was A$5.4 million.
• Total borrowings decreased from A$415.0 million as at 31 December 2020 to A$409.0 million as at 31 December 2021 which included repayments against the Sarawak Project Finance Loan of US$19.2 million (approximately equal to A$25.8 million) partially offset by an increase in the utilisation of trade facilities of approximately A$23.6 million for the purchase of ores, alloys and raw material inventories. As a result, total borrowings to equity ratio decreased from 0.89 times as at 31 December 2020 to 0.67 times as at 31 December 2021.
• Consolidated cash position of A$112.3 million (included cash collateral of A$16.2 million) as at 31 December 2021 as compared to A$63.0 million (included cash collateral of A$17.1 million) as at 31 December 2020.
• Net cash generated from operating activities of A$94.2 million for FY2021.

10 Eunos Road 8, #09 - 03A,	1

Singapore Post Centre, 408600 Singapore

Tel: [phone] Fax: [phone]

Email address: [e-mail]

Website: www.omholdingsltd.com

ASX Code: OMH

OM HOLDINGS LIMITED

(ARBN 081 028 337)

(Malaysian Registration No. 202002000012 (995782-P))

Incorporated in Bermuda

For personal use only

HIGHLIGHTS (CONT'D)

• Net asset backing per ordinary share of the Group was 82.84 cents as at 31 December 2021 as compared to 63.56 cents per ordinary share as at 31 December 2020, representing a 30% (or 19.28 cents per ordinary share) year-on-year increase.
• With the Group having recorded a net profit after tax of A$109.3 million, the Board has resolved to declare a final dividend of A$0.02(1) per share for FY2021. The Record Date for the dividend will be 8 April 2022 and the Payment Date will be 6 May 2022.

1. For shareholders whose shares are held on Bursa Malaysia Securities Berhad ("Bursa Malaysia"), the final dividend of A$0.02 per share (approximately MYR 0.061 per share) will be paid on 6 May 2022. The exchange rate will be fixed at the Record Date of 8 April 2022. All other shareholders will be paid in AUD.

10 Eunos Road 8, #09 - 03A,	2

Singapore Post Centre, 408600 Singapore

Tel: [phone] Fax: [phone]

Email address: [e-mail]

Website: www.omholdingsltd.com

ASX Code: OMH

OM HOLDINGS LIMITED - GROUP KEY FINANCIAL RESULTS

only	KEY DRIVERS		Year ended		Year Ended	Variance
(Tonnes)		31 December		31 December	%
			2021		2020
	Sales volumes of Ores & Raw Materials		1,557,142		1,146,970	36
	Sales volumes of Alloys		419,689		415,708	1
	FINANCIAL RESULTS (A$' million)
	Total sales		1,040.8		784.6	33
use	Gross profit		274.5		96.3	>100
Gross profit margin (%)		26.4		12.3
Other income		14.3		6.8	>100
Distribution costs		(68.7)		(41.7)	65
Administrative expenses		(21.7)		(15.9)	36
Other operating expenses		(58.9)		(38.4)	53
Exchange (loss)/gain		(11.7)		0.6	NM
Impairment charge		(0.8)		-	100
personal	Finance costs		(19.8)		(28.8)	(31)
Depreciation/amortisation(2)		56.9		54.8	(67)
	Share of results of associates		5.4		16.5
	Profit/(Loss) before income tax		112.6		(4.7)	NM
	Income tax (expense)/credit		(3.3)		1.7	NM
	Profit/(Loss) for the year		109.3		(2.9)	NM
	Non-controlling interests		(27.4)		8.3	NM
	Profit after tax attributable to owners of the		81.9		5.4	>100
	Company
	OPERATING RESULTS ADJUSTED FOR NON-
	CASH ITEMS
	Net profit/(loss) after tax		109.3		(2.9)
	Adjust for non-cash items:
	Impairment charge		0.8		-
	Write off of property, plant and equipment		7.3		0.3
For
Unrealised exchange (gain)/losses		6.9		(0.6)
Finance costs (net of income)		19.5		28.1
	Income tax expense/(credit)		3.3		(1.7)
	Adjusted EBITDA(1)		204.0		78.0
	Less Depreciation/amortisation		(56.9)		(54.8)
	Adjusted EBIT		147.1		23.2

1. Adjusted EBITDA is defined as operating profit before depreciation and amortisation, impairment expense, write-off of property, plant and equipment, net finance costs, income tax and other non-cash items. Adjusted EBITDA is not a uniformly defined measure and other companies in the mining industry may calculate this measure differently. Consequently, the Group's presentation of Adjusted EBITDA may not be readily comparable to other companies' disclosures.
2. Inclusive of depreciation and amortisation charges recorded through cost of sales.

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FINANCIAL ANALYSIS

The Group recorded revenue of A$1.04 billion for the FY2021, which was a 33% increase from the A$784.6 million recorded for the FY2020. The increase in revenue was mainly attributed to higher total manganese ore and manganese alloys (mainly SiMn) volumes traded in FY2021, coupled with the increase in ferroalloy prices in FY2021. Despite the challenging global environment with the COVID-19 pandemic, there has been a strong global recovery since the beginning of 2021 with increased regional demand for manganese ores and ferroalloys. This has in turn translated to a corresponding increase in ferroalloy prices in FY2021, with rather significant increases recorded especially in the second half of FY 2021.

With the shut-down of 4 furnaces since the middle of FY2020 due to border closures and local restrictions imposed on the hiring of new foreign workers due to the COVID-19 pandemic leaving only 12 furnaces operating for the whole of FY2021, the Group's FeSi volumes traded from the Group's 75% owned smelter in Sarawak decreased by approximately 34% in FY2021. The temporary shut-down of the smelter in Sarawak for about 1 month (i.e from end May 2021 to end June 2021) as a result of COVID-19 also contributed to this decrease. FeSi volumes traded in FY2021 were 117,514 tonnes, with a total revenue contribution of A$272.7 million (FY2020: 171,502 tonnes with a revenue contribution of A$250.2 million). Despite a 34% decrease in FeSi volumes traded in FY2021, the average transacted prices of FeSi for FY 2021 increased by approximately 59% (from A$1,459 per tonne for FY 2020 to A$2,321 per tonne for FY2021).

The decrease in FeSi volumes traded was offset by an increase in manganese alloys (mainly SiMn) volumes traded in FY2021 of approximately 24%. A total of 302,175 tonnes of manganese alloys were traded in FY2021 (with a revenue contribution of approximately A$474.4 million) as compared to 244,206 tonnes of manganese alloys traded in FY2020 (with a revenue contribution of approximately A$316.2 million).

Total manganese ore volumes traded (including from the Group's wholly-owned Bootu Creek Manganese Mine (the "Mine") and other third party ores) increased in FY2021 due to stronger global demand. Total manganese volumes traded increased by 402,012 tonnes (approximately 36%) to 1,513,757 tonnes, with a total revenue contribution of A$279.6 million in FY2021 (as compared to 1,111,745 tonnes with a total revenue contribution of A$212.4 million in FY2020). Manganese ore volumes traded from the Mine in FY 2021 increased by approximately 28% (by 170,962 tonnes) to 777,177 tonnes, with a revenue contribution of A$129.4 million (an increase of approximately 27%, as compared to a revenue contribution in FY 2020 of A$101.5 million). The increase in volumes traded was mainly due to the Australian subsidiary, OM (Manganese) Ltd ("OMM") carried out mining and production activities for the whole of FY2021. However, for FY2020, mining and production efficiencies at the restart of mining activities in 2020, after the 4 months mining suspension following the Tourag accident, were slower with lower than budgeted yields. Other third party manganese ore volumes traded (including ores from South Africa) in FY2021 also increased by approximately 46% (by 231,050 tonnes) to 736,580 tonnes (as compared to 505,530 tonnes in FY2020). Revenue contributed from other third party manganese ores in FY2021 were A$150.2 million as compared to A$110.9 million in FY2020, an increase of 35%.

With an increase in both product volumes traded in FY2021 and price increases of FeSi and SiMn along with improved operational performance of OMM, the Group recorded an increased gross profit of approximately A$274.5 million in FY2021 (with a gross profit margin of approximately 26%) as compared to a gross profit of A$96.3 million in FY2020 (with a gross profit margin of approximately 12%).

Platts reported that prices of FeSi continued an upward trend since December 2020, closing at US$1,465 per metric tonne CIF Japan at the end of March 2021, and continued to rally to close at US$1,920 per metric tonne CIF Japan at the end of June 2021, and further surged by approximately 116.2% to close at US$4,150 per metric tonne CIF Japan at the end of September 2021. This escalation in FeSi prices was due in part to government policies in China in relation to the on-going power shortages. Power rationing was imposed on energy-intensive industries which resulted in significant cuts in FeSi production, which impacted global supply and demand balance. However, FeSi prices decreased from a high of US$4,150 to close at US$2,110 per metric tonne CIF Japan at the end of December 2021 mainly due to the easing of the energy crunch, as well as lower steel production in China during the quarter ended 31 December 2021.

The price of SiMn to Japan in FY2021 also followed the same trajectory as FeSi. SiMn prices closed at US$1,280 per metric tonne CIF Japan at the end of March 2021, continued to increase to close at US$1,545 and US$1,615 per metric tonne CIF Japan at the end of June 2021 and September 2021 respectively, before softening slightly to close at US$1,535 per metric tonne CIF Japan at the end of December 2021. In addition to the emissions policies in China which dampened ferroalloy production, the increase in both FeSi and SiMn

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prices were also supported by stronger regional demand amidst reduced supply due to temporary disruptions in India and at OM Sarawak with the temporary shut-down of the Plant in late May 2021 for one month.

As an indication, the index manganese ore prices (44% Mn published by Fastmarkets MB) also increased and closed at US$$5.60/dmtu CIF China at the end of December 2021, up from US$4.21/dmtu CIF China at the end of December 2020 and US$5.22/dmtu at the end of June 2021.

Total distribution costs increased by approximately 65% in FY2021, which was in line with the increase in the total volume of products traded and sold in FY2021. In addition, freight market rates increased significantly in FY2021 and remained elevated, and the heightened freight rate is expected to continue affecting sea borne trade globally into FY2022.

Administrative expenses for FY2021 increased by 36% to A$21.7 million. The increase was mainly due to:

• higher legal and professional fees associated with the Company's secondary listing on Bursa Malaysia Securities Berhad ("Bursa Malaysia");
• bonus and profit-sharing provisions for FY2021 performance (no bonus and profit-sharing provision in FY2020); and
• higher general administrative expenses to enforce COVID-19safe-distancing and management protocols and requirements throughout the Group.

Other operating expenses increased to A$58.9 million for FY2021 from A$38.4 million for FY2020 mainly due to:

• higher furnace shut-down expenses in FY 2021 as compared to FY 2020. In FY 2021, the Group recorded the furnace shut-down expenses of 4 FeSi furnaces in OM Sarawak for 12 months of A$18.9 million. (as compared to A$11.9 million for FY2020) as the FeSi furnaces were shut down in stages in FY2020 (ie. 2 furnaces in February 2020, 1 furnace in May 2020, and the 4th furnace only in July 2020) for maintenance and upgrading due to local restrictions imposed on the hiring of new foreign workers due to the COVID-19 pandemic;
• A$3.8 million write-down of inventories to net realisable value in FY 2021 (an increase of A$0.8 million over FY 2020);
• higher depreciation and amortisation mainly from the accelerated depreciation/amortisation of the Australian mining asset with the stoppage of mining activities in December 2021; and
• provisions and payments of employee entitlements/redundancies at OMM due to the cessation of mining activities at the Mine.

Foreign exchange losses of A$11.7 million were recorded in FY2021 as compared to foreign exchange gains in FY2020 of A$0.6 million. The foreign exchange losses in FY2021 were mainly due to the discontinuation in cash flow hedges (approximately A$2.9 million) and exchange losses from OM Sarawak and OMM. The foreign exchange gain in FY2020 was mainly attributed to hedging gains from forward foreign exchange contracts to sell USD for AUD.

Finance costs for FY2021 also decreased by approximately 31% to A$19.8 million (as compared to A$28.8 million for FY2020) mainly due to the reduction in bank borrowings with the scheduled repayments of the Project Finance loans by OM Sarawak and generally lower interest rates.

The Group's share of results from its associates of A$5.4 million related to the operating results of its 13% interest in Tshipi é Ntle Manganese Mining (Pty) Ltd.

Despite the global economy still being challenged by the COVID-19 pandemic, there has been a strong global recovery since the beginning of 2021 with increased regional demand for manganese ores and ferroalloys and a strong increase in ferroalloy prices in FY2021. The Group has benefited from this as evidenced by the increase in total product volumes traded in FY2021. The Group recorded a strong profit after tax of A$109.3 million for FY2021 (against a loss after tax of A$2.9 million for FY2020). The Group's basic and diluted profit per ordinary share for FY2021 was 11.11 cents as compared to the basic and diluted earnings per share of 0.73 cents for FY2020.

The Group also recorded a strong positive EBITDA of A$204.0 million in FY2021 as compared to A$78.0 million in FY2020, an increase of more than 100%, on the back of stronger ferroalloy prices and higher product volumes traded.

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