Q4 and Full year 2018 Results Presentation · IDR against USD during Q4 2018, which has resulted in...
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Q4 and Full year 2018 Results Presentation 28 February 2019
Transcript of Q4 and Full year 2018 Results Presentation · IDR against USD during Q4 2018, which has resulted in...
Q4 and Full year 2018 Results Presentation28 February 2019
This presentation has been prepared by Halcyon Agri Corporation Limited (“Company”) for informationalpurposes, and may contain projections and forward-looking statements that reflect the Company’s current viewswith respect to future events and financial performance. These views are based on current assumptions whichare subject to various risks and which may change over time. No assurance can be given that future events willoccur, that projections will be achieved, or that the Company’s assumptions are correct.
The information is current only as of the date of this presentation and shall not, under any circumstances, createany implication that the information is correct as of any time subsequent to the date of this presentation or thatthere has been no change in the financial condition or affairs of the Company since such date. Opinionsexpressed in this presentation reflect the judgement of the Company as of the date of this presentation and maybe subject to change. This presentation may be updated from time to time and there is no undertaking by theCompany to post any such amendments or supplements on this presentation.
The Company will not be responsible for any consequences resulting from the use of this presentation as well asthe reliance upon any opinion or statement contained within this presentation or for any omission.
Throughout the presentation, HRC, SINRIO and Corrie MacColl will be used to abbreviate our Global Tyre Majors,PRC Tyre Majors and Global Non-Tyre & Specialty Tyre segment respectively.
Important Notice
Q4 2018 Financial Highlights
1 Includes intersegment revenue and volume of US$17.5 million and 13,048 MT respectively.
Q4 2018 Group performance overviewRevenue (US$m)1 Sales Volume (mT)1
Gross Profit (US$m) Op. (Loss)/Profit (US$m)2
Balance sheet overview
Q4 2018 FY 2018
US$538.3m US$2,141.0m
Q4 2018 FY 2018
377,239 mT 1,432,335 mT
Q4 2018 FY 2018
US$16.9m US$118.4m
Q4 2018 FY 2018
(US$10.1m) US$4.5m
HRC124,851
32%
SINRIO165,134
42%
Corrie MacColl100,303
26%
HRC167.8 30%
SINRIO230.8 42%
Corrie MacColl
157.2 28%
HRC(1.0)
SINRIO8.2
Corrie MacColl
9.7
HRC(10.0)
SINRIO(3.2)
Corrie MacColl
(0.4)
Corporate3.6
US$ in millions Dec-18 Sep-18 Jun-18 Mar-18
Assets partially funded by debt
WC employed 539.4 513.8 536.0 550.4
Working capital loans 520.4 507.4 515.1 422.1
% WC efficiency 96.5% 98.8% 96.1% 76.7%
Operational long term assets
938.7 923.6 861.3 785.6
Term loans 391.6 394.2 394.0 402.2
% Fixed asset gearing 41.7% 42.7% 45.7% 51.2%
Assets fully funded by equity
Cash and cash equivalents
122.9 122.5 132.3 168.4
Non-core assets 46.8 93.2 149.3 148.6
Total equity3 735.9 751.4 769.9 828.8
NAV per share (US cents) 46.1 47.1 48.3 52.0
NAV per share (SG cents)2 63.0 64.4 65.8 68.3
Note 2: Translated at the closing exchange rates for each respective period.
Note 1: Please refer announcement for the definition of working capital employed, operational long term assets, cash and cash equivalents and non-core assets.
Note 3: Inclusive of perpetual securities of US$148.7m.
2 Included within Corporate is management fee income of US$7.2m, in which US$4.9m is allocated to HRC and US$2.3m is absorbed by SINRIO.
Market Prices Movement (SGX SICOM TSR20 First Position – in US$ per mT)
Headline Financials
US$ in millions Q4 2018 FY 2018
Revenue 538.3 2,141.0
Gross profit 16.9 118.4
Operating (loss)/profit (10.1) 4.5
EBITDA (0.1) 36.2
Loss before tax (13.5) (17.0)
Headline Commentary• Market prices dropped to new lows in Q4 2018 due to overall
macroeconomic environment especially concerns surroundingthe trade disputes between US and China.
• The low rubber prices has resulted in margin compression dueto raw materials sourcing challenges. We were required topay more in order to secure the raw materials so as to fulfilthe delivery committed volume to customers.
• Meanwhile, Corrie MacColl’s results had deteriorated in thecurrent quarter due to reduced margins, adverse movementof forex as well as the accruals of major expenses in year end.
Q4 2018 Group performance overview (Contd.)
900
1,100
1,300
1,500
1,700
1,900
2,100
2,300
2,500
Jan-18 Feb-18 Mar-18 Apr-18 May-18 Jun-18 Jul-18 Aug-18 Sep-18 Oct-18 Nov-18 Dec-18 Jan-19 Feb-19
FY 2018
FY 2017
Q1 2017 average: US$2,010;Q1 2018 average: US$1,468
Q2 2017 average: US$1,489;Q2 2018 average: US$1,400
Q3 2017 average: US$1,537;Q3 2018 average: US$1,329
Q4 2017 average: US$1,435;Q4 2018 average: US$1,268
36.9%
6.4%15.7%
11.6%
Note: Please refer announcement for details of the restatement of Q4 2017 and FY 2017 financials.n.m.: Not meaningful
Income Statement Highlights
US$mQ4 ended 31 December Full year ended 31 December
20182017
(Restated) ▲% 20182017
(Restated) ▲%
Revenue 538.3 512.4 5% 2,141.0 2,158.4 -1%
Gross profit 16.9 29.3 -42% 118.4 150.6 -21%
Operating (loss)/profit (10.1) 17.6 n.m. 4.5 59.2 -92%
Operating (loss)/profit after working capital interest (11.3) 15.5 n.m. (9.1) 50.5 n.m.
EBITDA (0.1) 25.2 n.m. 36.2 86.4 -58%
EBITDA after working capital interest (1.3) 23.1 n.m. 22.6 77.7 -71%
Net (loss)/income (8.7) 13.4 n.m. (13.4) 34.5 n.m.
Sales volume (mT) 377,239 326,665 15% 1,432,335 1,227,027 17%
Average selling price (US$) 1,427 1,569 -9% 1,495 1,759 -15%
Gross profit per mT (US$) 45 90 -50% 83 123 -33%
Operating (loss)/profit per mT (US$) (27) 54 n.m. 3 48 -94%
Operating (loss)/profit after working capital interest per mT(US$)
(30) 47 n.m. (6) 41 n.m.
EBITDA per mT (US$) (0) 77 n.m. 25 70 -64%
EBITDA after working capital interest per mT (US$) (3) 71 n.m. 16 63 -75%
Segmental Performance
Revenue (US$m)1
Gross Profit (US$m) Op. Profit/(Loss)2 (US$m)
Sales Volume (mT)1
Halcyon Rubber Company (HRC)
1 Includes intersegment figures2 Adjusted for management fees
• The continued deterioration ofmarket prices in Q4 2018 have ledto further margin compressiondue to raw materials sourcingchallenges. We were obliged topay more in order to secure theraw material supplies needed toensure delivery of committedvolume to customers.
• The losses are furthercompounded by the recovery ofIDR against USD during Q4 2018,which has resulted in higher USDoperating costs.
251.5
179.0 189.5
206.6
167.8
-
200
400
600
800
1,000
1,200
1,400
1,600
-
50.0
100.0
150.0
200.0
250.0
300.0
Q4 2017 Q1 2018 Q2 2018 Q3 2018 Q4 2018
US$
in m
illio
ns
Revenue (US$ per MT)167,148
121,382 129,209
148,339
124,851
Q4 2017 Q1 2018 Q2 2018 Q3 2018 Q4 2018
13.0
6.4 6.0
7.5
(1.0)
Q4 2017 Q1 2018 Q2 2018 Q3 2018 Q4 2018
4.9
(0.1)
(4.4)
(1.6)
(5.1)
Q4 2017 Q1 2018 Q2 2018 Q3 2018 Q4 2018
Revenue (US$m)1
Gross Profit (US$m) Op. Profit/(Loss)2 (US$m)
Sales Volume (mT)1
SINRIO
1 Includes intersegment figures2 Adjusted for management fees
• The increase in the sales volumeis due to stronger demand fromin-land sourced rubber in China.However, this has been offset bythe reduction in the averageselling prices.
• Weaker prices had a direct impacton the gross and operatingmargins of the segment.
253.8
180.2
229.8
196.6
230.8
-
200
400
600
800
1,000
1,200
1,400
1,600
1,800
-
50.0
100.0
150.0
200.0
250.0
300.0
Q4 2017 Q1 2018 Q2 2018 Q3 2018 Q4 2018
US$
in m
illio
ns
Revenue (US$ per MT)158,748
115,526
152,180 137,876
165,134
Q4 2017 Q1 2018 Q2 2018 Q3 2018 Q4 2018
10.4
15.7
19.9
9.6 8.2
Q4 2017 Q1 2018 Q2 2018 Q3 2018 Q4 2018
(2.3)
6.9
8.8
(1.2) (1.0)
Q4 2017 Q1 2018 Q2 2018 Q3 2018 Q4 2018
Revenue (US$m)1
Gross Profit (US$m) Op. Profit/(Loss)2 (US$m)
Sales Volume (mT)1
Corrie MacColl
1 Includes intersegment figures2 Adjusted for management fees
• Sales volume remained above100,000 mT for the thirdconsecutive quarter.
• Gross profits lower in Q4 vs Q3due to decrease in price.
• Operating profits were adverselyimpacted by the unfavourablemovement of Euro against USD.
• Additional accruals of retirementbenefits in Cameroonianoperations in line with ourincrease our headcount for theplantation.
93.8
139.2
168.7 166.2 157.2
-
200
400
600
800
1,000
1,200
1,400
1,600
1,800
-
20.0
40.0
60.0
80.0
100.0
120.0
140.0
160.0
180.0
Q4 2017 Q1 2018 Q2 2018 Q3 2018 Q4 2018
US$
in m
illio
ns
Revenue(US$ per MT)
61,356
85,991
102,597 100,021 100,303
Q4 2017 Q1 2018 Q2 2018 Q3 2018 Q4 2018
5.8 6.5
14.7 15.4
9.7
Q4 2017 Q1 2018 Q2 2018 Q3 2018 Q4 2018
(0.4)
2.9 2.0
9.9
(0.4)
Q4 2017 Q1 2018 Q2 2018 Q3 2018 Q4 2018
Cash Flows
Cash Flows
US$mQ4 ended 31 Dec Full year ended 31 Dec
2018 2017 2018 2017
Operating cash flows before working capital changes 3.4 (8.4) 41.4 58.4
Changes in working capital 26.6 42.8 (67.2) (84.6)
Payment of taxes and net interests of working capital loans (10.5) (7.6) (27.1) (16.5)
Cash flow generated from/(used in) operating activities 19.5 26.8 (52.9) (42.7)
Cash flow (used in)/generated from investing activities (23.2) 150.1 (201.2) 113.4
Cash flow generated from/(used in) financing activities 5.9 (132.7) 228.4 11.2
Net changes in cash and cash equivalents 2.2 44.2 (25.8) 81.9
Thank you
