DSO 6.6 ⇑

DIO 0.3 ⇑

DPO 6.6 ⇑

DWC 3.2 ⇑

Strong trading conditions for the sector but a deterioration in DWC driven by customers paying more slowly (increased DSO).

Despite the wider market disruptions caused by COVID, the Mining & Resources sector experienced another strong year in 2021, with average revenue growth of 16% across our sample. Gold, coal and iron ore producers all benefited from price and demand increases, which translated into 73% of our sample reporting an uplift in revenues in H2 2021. Notably, the iron ore price peaked in H2 (May 2021) at US$233/t, over US$150/t higher than its price 12-months earlier. The demand for coal resulted in coal futures and volumes both increasing by c.50% during 2021, showing that despite the push for green energy, coal continues to be a significant input for global energy generation in the near-term.

Whilst some operators reported that haulage and labour constraints impacted opex, the sampled companies were able to increase average earnings by 49% in 2021 (with close to half of sampled operators delivering double digit earnings growth).

From a working capital perspective, average DWC increased by 3.2 days (to 41.7 days) in 2021. This was driven by a lengthening of customer collection cycles, with 68% of our sampled companies taking longer to collect their debtors (relative to the prior year). Average DSO increased by 6.6 days (to 37.7 days). To offset the impact of higher average DSO, our sampled companies paid their suppliers more slowly.

Average DPO increased by 6.6 days (to 68.9 days). Significantly, 80% of those sampled companies that experienced increased DSO also increased DPO, a strategy that is not uncommon in the Mining & Resources sector. Some of the ‘majors’ have continued with this approach during H1 2022, with reports that payment terms for contractors have been reset (four to six weeks longer than previous arrangements in some cases).

After a significant reduction in DIO in 2020, inventory loads stabilised in 2021 (at 73.5 days, 0.3 days lower than 2020). However, there was a mix of outcomes with some significant reductions for a few companies.

Australian operators sit within the range of DWC achieved in Asia, the EU and US, noting the average DIO metrics were higher than the international counterparts in 2021 (clearly influenced by the favourable local production conditions).

Looking forward for the Mining & Resources sector, close attention will continue to be paid to decisions made in China. The slowdown in iron ore exports has already seen the price plummet to US$94/t in September 2021, as China’s Government reaffirmed its commitment to peak carbon emissions by 2030 and restrictions on steel output for 2021 (at 2020 levels).

“The increase in working capital was primarily driven by higher product and crude price impacting receivables, inventory and payables.”

Ampol Limited
Half Year Report 2021


COVID-19 Impact


Cash Impact ($'m)*

*A positive cash impact is a “release” of cash from working capital (improvement). A negative cash impact is additional cash invested or “locked up” in working capital (deterioration).

Mining & Resources - Financial Year
Days 2020 2021 Change
DSO 31.1 37.7 6.6
DIO 73.2 73.5 0.3
DPO 62.3 68.9 6.6
DWC 38.5 41.7 3.2
Mining & Resources - Half Year
Days H1 2021 H2 2021 Change
DSO 33.8 35.7 1.9
DIO 71.2 73.1 1.9
DPO 71.7 70.3 (1.4)
DWC 33.6 39.3 5.7
Best & Worst
Days Best Worst Spread
DSO - 100.9 100.9
DIO 4.0 181.3 177.3
DPO 265.9 5.3 (260.6)
DWC (1.5) 123.2 124.7
International Benchmarking
Days AU Asia EU US
DSO 37.7 35.8 51.9 41.6
DIO 73.5 63.0 66.5 52.2
DPO 68.9 46.3 84.5 73.0
DWC 41.7 53.3 38.8 30.9