1st Quarter 2013 - ChartNexusir2.chartnexus.com/thplantation/doc/presentation/THP-1Q13...Tabung Haji...
Transcript of 1st Quarter 2013 - ChartNexusir2.chartnexus.com/thplantation/doc/presentation/THP-1Q13...Tabung Haji...
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1 TH PLANTATIONS BERHAD(Company No: 12696-M)
1st Quarter 2013Analyst/Investor Briefing
TH PLANTATIONS BERHAD(Company No: 12696-M)
Dato’ Zainal Azwar Zainal AminuddinChief Executive Officer
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2 TH PLANTATIONS BERHAD(Company No: 12696-M)
Presentation Outline
Growth: Shaping up for future demand
Strengthening our core business
1Q13 financial results
2
3
1
Reaching for Greater
Heights
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3 TH PLANTATIONS BERHAD(Company No: 12696-M)
Overview of 1Q13 financial results
• From acquisitions of Hydroflow, THLSS, TH Bakti
Bigger landbank, higher matured area
• Driven by bigger land bank and matured areas
Higher production of FFB and CPO
• Prices lower by 34% to 42%, offsetting higher production
Significantly lower selling prices
• Amortisation of acquired lands and their PDE
Higher non-cash costs arising from acquisitions
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4 TH PLANTATIONS BERHAD(Company No: 12696-M)
0
20,000
40,000
60,000
80,000
100,000
2011 2012 Current
39,4
43
91,0
78
97,5
92
Land bank has more than doubled
§Acquisition of 70% equity interest from Sawit Green§Acquisition completed in
July 2012
Hydroflow
§Acquisition of 70% equity interest from LembagaTabung Haji §Acquisition completed in
November 2012
TH Bakti
§Acquisition of entire equity interest from LembagaTabung Haji §Acquisition completed in
November 2012
THLSS
§Acquisition of entire equity interest from a consortium of investors including WeidaBhd§Acquisition completed in
March 2013
MajuWarisanmas &
Bumi SuriaVentures
§Acquisition of 93% interest in PT PKP§Awaiting regulatory
approvals
PT PersadaKencana
Prima
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5 TH PLANTATIONS BERHAD(Company No: 12696-M)
Overview of Profit & Loss (RM ‘000) 1Q13 1Q12Revenue 89,453 95,046
Sales of CPO 67,024 67,841Sales of PK 9,173 13,501Sales of FFB 9,546 8,680Management fees 3,710 5,024Dividend - -
Cost of Sales (60,965) (59,463)Gross Profit before Amortisation 28,488 35,583Amortisation (13,479) (5,948)Gross Profit 15,009 29,635Other Expenses (10,751) (5,918)
Admin expenses (4,577) (2,759)Other operating expenses (1,248) (391)Depreciation (297) (245)Finance costs (4,630) (1,814)Zakat - (711)
Other Income 792 1,389Profit Before Tax 5,049 25,104Tax (1,200) (9,358)Profit After Tax 6,249 15,746PATAMI 3,209 13,066Earnings per share (sen) - Basic 0.44 2.53Earnings per share (sen) - Diluted 0.43 2.44
Revenue down by 6%, mainly due to lower selling prices
Cost of sales up by 2.5%, in line with enlarged land bank
Other expenses higher by 66%, due to higher finance costs and
expenses on corporate exercises
Amortisation 127% higher due to enlarged land bank
PAT hit by lower selling prices, exacerbated by higher non-cash
amortisation costs
Gross profit (excl amortisation) down by 20%, in line with industry
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6 TH PLANTATIONS BERHAD(Company No: 12696-M)
Higher production significantly offset by lower prices
1Q12 1Q13AmortisationLower Op ExpPriceOther
ExpProduction
25,105
+23,841 -47,482
+16,985 -7,531
-5,868
5,050
RM ‘000
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7 TH PLANTATIONS BERHAD(Company No: 12696-M)
A closer look at revenue
Mature Area (ha)23
,158
32,5
40
1Q12 1Q13
+41%
FFB Production (MT)
104,
391
159,
036
1Q12 1Q13
+52%
CPO Production (MT)
22,6
06
29,5
58
1Q12 1Q13
+31%
FFB Processed (MT)
111,
994
145,
362
1Q12 1Q13
+30%
CPO Sales (MT)
22,0
55 32,9
40
1Q12 1Q13
+49%
PK Production (MT)
6,74
2 7,3
83
1Q12 1Q13
+10%
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8 TH PLANTATIONS BERHAD(Company No: 12696-M)
A closer look at revenue
FFB Yield (MT/ha)
4.51
4.89
1Q12 1Q13
+8%
KER (%)
6.02
5.08
1Q12 1Q13
0.94 ppt
OER (%)
20.1
8
20.3
3
1Q12 1Q13
+0.15ppt
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9 TH PLANTATIONS BERHAD(Company No: 12696-M)
FFB contribution by region
34%
35%
31%
1Q 2013
48%
13%
39%
1Q 2012
Peninsular
Sabah
Sarawak
PeninsularSabah
Sarawak
Higher contribution from the Sarawak region following acquisitions made in 2012
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10 TH PLANTATIONS BERHAD(Company No: 12696-M)
Higher proportion of younger palms
16%
19%
26%
39% Old Mature(20 – 25 years)
Young Mature(4 – 9 years)
Prime Mature(10 – 19 years)
Old Mature( > 25 years)
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11 TH PLANTATIONS BERHAD(Company No: 12696-M)
Replanting Programme – Status Update
2013 Replanting Ha As at March13 Remarks
Sungai Tenegang 334 - Expected to start in July 2013Sungai Koyah 451 -
Total 785 -
2012 Replanting Ha As at March13 RemarksBukit Lawiang 267 267
Completed - December 2012Gunung Sumalayang 250 250Ulu Chukai 267 112 Expected to complete by June 2013Sungai Buan 274 274
Completed – March 2013Sungai Merchong 240 240Sungai Tenegang 350 350 Completed - November 2012Sungai Koyah 396 396
Total 2,044 1,889 (95%)
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12 TH PLANTATIONS BERHAD(Company No: 12696-M)
THP mills outperformed its peers
19.9
6
19.2
1
19.8
4
19.5
4
20.4
8
21.9
4
19.6
6
19.5
0*
19.3
3
20.0
0*
20.2
6
20.3
1
15
16
17
18
19
20
21
22
Kota Bahagia Bukit Lawiang Pasir Besar Sungai Tenegang Mamahat Gedong
THP Area Average
Oil
Extr
actio
n Ra
te (O
ER) (
%)
Bukit Lawiang and Sg Tenegang mills achieved lower OER compared to respective area average due to age profile of surrounding estates, which are in
the course of/due for replanting.
*Estimates
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13 TH PLANTATIONS BERHAD(Company No: 12696-M)
Lower revenues mainly driven by prices
1Q13 1Q12
CPO RM2,035 RM3,076
PK RM1,115 RM1,935
FFB RM346 RM579
-34%
-42%
-40%
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14 TH PLANTATIONS BERHAD(Company No: 12696-M)
A closer look at expenditure
• Estate production cost up by 5%• Mill manufacturing cost up by 40%• Depreciation costs up by 32%• Amortisation costs up by 127%
• Admin expenses up by 66%• Other operating expenses up by 223%• Finance costs up by 155%
Attributed to enlarged land bank and associated costs/charges of
those acquisitions
1,27
5
1,14
3
1Q12 1Q13
Production Cost (RM/MT)
-10%
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15 TH PLANTATIONS BERHAD(Company No: 12696-M)
How are our assets amortised? (FRS3)
Acquired Land Bank
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23
Yield Profile against Year of Maturity
Plantation Development Expenditure
Land
Fair Value
At Cost
Fair Value
At Cost
Straight line basis over lease period
Straight line basis overremaining lease period
Based on estimated yield production method
Based on estimated yield production method
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16 TH PLANTATIONS BERHAD(Company No: 12696-M)
Hence, amortisation will now be higher
4.35 5.21 4.59
24.15 23.61 23.2926.55
52.00*
304360
190
9991,047 1,016
815
1,300*
0
200
400
600
800
1,000
1,200
1,400
0
10
20
30
40
50
60
2006 2007 2008 2009 2010 2011 2012 2013
Amortisation Amortisation/Ha
Amor
tisat
ion
(RM
mil)
Amortisation/Ha (RM
)
*Estimates
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17 TH PLANTATIONS BERHAD(Company No: 12696-M)
So why grow at all?
Given the growing world population and per capita income, it has been projected that palm oil demand would continue to
increase from 45 million tonnes in 2010 to 60 million tonnes in 2015, and hitting a whopping 75 milllion tonnes in 2020.
-source: The Star (Commodities Talk) – 27th May 2013
Demand for palm oil expected to increase
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18 TH PLANTATIONS BERHAD(Company No: 12696-M)
Our land bank has grown significantly
15,746
28,730
39,059 39,159 39,113 39,372
91,078 97,592
2006 2007 2008 2009 2010 2011 2012 Current
Land bank (Ha)
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19 TH PLANTATIONS BERHAD(Company No: 12696-M)
Enlarged land bank to catalyse future FFB growth
321,233 286,723
347,547
519,290
463,949
513,276 524,665
823,825
1,014,477
1,191,174
1,326,855
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200,000
400,000
600,000
800,000
1,000,000
1,200,000
1,400,000
-
10,000
20,000
30,000
40,000
50,000
2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016
FFB production will grow at a CAGR* of 17.2% from 2013-2016
Mat
ured
are
as (H
a)FFB production (M
T)
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20 TH PLANTATIONS BERHAD(Company No: 12696-M)
We can now consider a full-fledged secondary crop
Key Considerations
Existing supply
Historical price trend
Demand forecast
Future price
forecast
Internal expertise
Soil suitability
With an enlarged land bank, we are better positioned to go full phase on dual-cropping
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21 TH PLANTATIONS BERHAD(Company No: 12696-M)
We can also explore mid/down-stream opportunities
UPS
TREA
MM
ID/
DOW
NST
REAM
THP is currently a pure upstream plantation player
Opportunities that are being explored:Ø Refinery Ø Kernel crushing Ø Manufacturing of food products,
oleochemicals and biodiesel
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22 TH PLANTATIONS BERHAD(Company No: 12696-M)
Strengthening our core businessDeriving maximum value from our assets
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23 TH PLANTATIONS BERHAD(Company No: 12696-M)
GROWTH
Strengthening our core business
Humanisingbusiness
operations
Development of plantable
reserves
Enhancing the value of
planted areas
Exploring prospective land banks
1 2
3 4
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24 TH PLANTATIONS BERHAD(Company No: 12696-M)
Improve replanting materials and methods
Enhancing the value of
planted areas
1
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25 TH PLANTATIONS BERHAD(Company No: 12696-M)
Optimise average age and mature/immature ratio
Accelerate replanting programme
Acquisition of new brownfields with young palms
2-pronged approach to optimising age profile
and mature/immature ratio
Enhancing the value of
planted areas
1
12 yrs
11 yrs
10 yrs 10 yrs
9
10
11
12
13
0
10,000
20,000
30,000
40,000
50,000
60,000
70,000
2013 2014 2015 2016
Immature Mature Age
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26 TH PLANTATIONS BERHAD(Company No: 12696-M)
Enhance use of innovation and technology
Morning Roll Call
Checker Bunch CountFFB Grading
Crop DispatchStore
Guard Patrolling for APs
Enhancing the value of
planted areas
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27 TH PLANTATIONS BERHAD(Company No: 12696-M)
Intensify mechanisation
(35) – 2x (272) (32) - 10x
(22) (78) (16)
Enhancing the value of
planted areas
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28 TH PLANTATIONS BERHAD(Company No: 12696-M)
Develop plantable reserves
Sizeable plantable reserves
• Newly-acquired greenfields• Pockets of undeveloped lands within
acquired brownfields• Pockets of lands within the Native
Customary Rights areas (to work hand-in-hand with the natives to develop those areas)
Our aim is to develop all of our plantable reserves within the next 5 years
Development of plantable
reserves
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29 TH PLANTATIONS BERHAD(Company No: 12696-M)
Explore prospective land banks
Medium-term:Opportunistic acquisitions forü Sizeable landsü Green fields or brown fieldsü In line with business strategies
Short-term:Acquisition of
PT Persada KencanaPrima
increases our landbank to ~110,000Ha
Longer-term:Expansion into similar climate, similar industry environment eg Indonesia and Papua New Guinea
OUR FOCUS:
Ø Consolidating our position Ø Streamlining our
operations, andØ Deriving maximum value
from existing land bank
Exploring prospective land banks3
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30 TH PLANTATIONS BERHAD(Company No: 12696-M)
Thank You
Our vision is to be an integrated and sustainable plantation player
with global recognition, promising premium quality products
For further information/queries, please email [email protected]
TH PLANTATIONS BERHAD(Company No: 12696-M)