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Golden Agri-Resources LtdCompany Presentation
June 2009
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Disclaimer
This presentation has been prepared by Golden Agri-Resources Ltd. (“GAR” or “Company”) for informational purposes, and may contain projections and forward looking statements that reflect the Company’s current views with respect to future events and financial performance. These views are based on current assumptions which are subject to various risks and which may change over time. No assurance can be given that future events will occur, that projections will be achieved, or that the Company’s assumptions are correct. Actual results may differ materially from those projected. A prospective investor must make its own independent decision regarding investment in securities.
Opinions expressed herein reflect the judgement of the Company as of the date of this presentation and may be subject to change without notice if the Company becomes aware of any information, whether specific to the Company, its business, or in general, which may have a material impact on any such opinions.
The information is current only as of its date and shall not, under any circumstances, create any implication that the information contained therein is correct as of any time subsequent to the date thereof or that there has been no change in the financial condition or affairs of GAR since such date. This presentation may be updated from time to time and there is no undertaking by GAR 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 as the reliance upon any opinion or statement contained herein or for any omission.
© Golden Agri-Resources Ltd. All rights reserved.
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SECTION 1 Company Overview 3
SECTION 2 Key Competitive Strengths 6
SECTION 3 1Q 2009 Performance 14
SECTION 4 Growth Strategy 20
Presentation of Agenda
Section 1Company Overview
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Planted Area : Approx. 396,000 ha1
Palm Product Output 1Q 2009 : Approx. 447,000 tonFY 2008 : Approx. 2,073,000 ton
Overview of GAR
GAR is listed on SGX since 1999 The largest Indonesian plantation group with integrated operations for the production of palm oil-based and edible fat productsIntegrated operations in China including a deep sea port, soybean crushing plants, and production of other refined edible oil products
ProductsKey Statistics
Cooking Oil
Margarine
Shortening
Butter Oil Substitute (BOS)
Stearin
Cocoa Butter Substitute
Financial Statistics (in US$ million)
Crude palm oil (CPO)
Palm Kernel (PK)
Palm Kernel Oil
Palm Kernel Meal
Soybean Oil
Soybean Meal
Notes:1. As of 31 March 20092. Attributable to the equity holders3. FY 2007 and FY 2008 net profit includes gain from changes in fair value of biological assets
FY 2007 FY 2008 1Q 2009Revenue : 1,873 2,986 412EBITDA : 535 597 45Net Profit2,3 : 1,165 1,383 9Total Equity2 : 3,303 4,614 4,623
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Largest Indonesian Plantation Group with Integrated Operations
Plantations & Harvesting CPO mill
Basic product Processing Processed product
CPO Refining Branded & unbranded cooking oil
Fatty acid
Stearin
Palm kernel (PK)
Kernel crushing capacity
Palm kernel oil
Planted areaTotal 395,774 ha• Nucleus 311,331 ha• Plasma 84,443 ha
Mature area334,357 ha
FFB production6,923,503 tons (FY 2008)
1,476,770 tons (1Q 2009)
No of mills33
Capacity8,670,000 tons FFB/year
Palm kernel meal
Production1,689,982 tons (FY 2008)
363,958 tons (1Q 2009)
No of refineries3Capacity1,140,000 tons/year
Production382,721 tons (FY 2008)
82,623 tons (1Q 2009)
No of crushing mills5
Capacity369,000 tons/year
Note: Data as of March 2009, unless otherwise indicated
Research & Development
Seedling
Co-operate with CIRAD (France)
Partnership with DAMI of New Britain Palm Oil Ltd
Capacity 24,000,000 seeds/year
Bio-diesel
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Section 2Key Competitive Strengths
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GAR is a leader in the high growth palm oil industry in Indonesia
Key Competitive Strengths
Management expertise and unrivalled
technology platform underpin high
production yields
Well establishedrefinery business
in both domestic and export
markets
Largest Indonesian plantation group with
vertically integrated operations
Sustained growth through expansion in
upstream and downstream
Continuous strong
commitment to the environment
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Largest Indonesian Plantation Group with Vertically Integrated Operations
1,690
9821,505
342714
265
2,413
848581
383
214
350
550
199135
7181
166
0
500
1,000
1,500
2,000
2,500
3,000
GAR Astra Agro Wilmar Lonsum Indo Agri Sampoerna Sime Darby IOI KLK
('000
Ton
s)
CPO PKNotes: 1. Based on latest publicly available information, including annual and quarterly reports and presentations2. Based on full fiscal year data
Indonesia Malaysia
Largest plantation group in Indonesia and second largest globally in terms of planted area 1
334
195 19591
206
67
477
139 118
62
57 64
54
10 4317 23
56
050
100150200250300350400450500550
GAR Astra Agro Wilmar Lonsum Indo Agri (inclLonsum)
Sampoerna Sime Darby IOI KLK
('000
hec
tare
s)
Mature Immature
84.5%
77.3%
83.9%
75.1%
93.6% 73.3%74.7%
78.8%
Indonesia Malaysia89.7%
Largest plantation group in Indonesia and second largest globally in terms of production 1,2
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Palm is the highest yielding vegetable oil
Management Expertise Delivers High Production Yields
22.42
20.90 20.6820.10
17.80
16
18
20
22
24
GAR Wilmar Astra Agro Indo Agri Lonsum
(Ton
/ha)
GAR is one of the lowest cost producers with industry-leading efficiencies
Note:1. Based on full fiscal year data
5.18
4.674.54
4.39
4.18
3.5
4.0
4.5
5.0
5.5
GAR Astra Agro Indo Agri Wilmar Lonsum
(Ton
/ha)
CPO yield per hectare1 & 2
GAR Age Profile 1
FFB yield per hectare 1
Notes:1. Based on full fiscal year data2. CPO yield/ha is derived from FFB yield/ha multiply by extraction rate
Note:1. Data as of 31 March 2009. Average age is 12 years
5.2
3.5
0.7 0.5 0.4
0.0
1.0
2.0
3.0
4.0
5.0
6.0
Palm Oil (GAR)
Palm Oil(Industry)
Rape Oil Sun Oil Soy Oil
(Ton
/ha)
Source: Oil World and Company
Immature (1-3 yrs)16%
Young (4-6 yrs)12%
Prime 1 (7-12 yrs)19%
Prime 2 (13-18 yrs)40%
Old (>18 yrs)13%
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War Room utilises SAP, GIS and Google Earth applications
Block-by-block Performance Analysis (30 ha per block) is updated daily
Facilitates problem identification (e.g. low yielding areas), enhancing management’s ability to address issues early and prioritise improvements/changes
To monitor and manage its widely spread operations efficiently, GAR utilises a state-of-the-art proprietary information technology system
Unrivalled Technology Platform Enhancing Operational Efficiency
(‘000 Tons)
1,553 1,608 1,690
440 364
315 337 359
1,479
383
8399 4.45.8
21.4 22.1 23.1 22.4
-
500
1,000
1,500
2,000
2005 2006 2007 2008 1Q 2008 1Q 200903691215182124
CPO PK FFB Yield (Ton/ha)
Palm Products Production and FFB Yield/ha(Ton/ha)
Notes:FY 2008 & 1Q 2009 FFB yield declined due to:a. Second year impact of drought in 2006 and tree’s biological slowdown (“tree
stress”) after the bumper crop in 2H 2007b. Longer than usual periods of heavy rainfall in southern part of Sumatra and
South Kalimantanc. Larger newly matured area
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Superior fertiliser cost management through operational control and R&D
GAR utilises GPS-guided aerial manuring to cover expansive plantation hectarage
With this advanced aerial manuring, GAR can tighten its cost of production compared to manual application
Fertiliser program developed with CIRAD1
Accurate fertiliser plan to minimise risk of pollution
Application and dosage based on cost/benefit analysis using leaf sampling (“blood test”), analysing condition of each plantation
Note:1 CIRAD = Centre de cooperation Internationale en Recherche Agronomique pour le Développement
(French Agricultural Research Centre for International Development)
Unrivalled Technology Platform Optimising the Production Yields and Minimising Cost
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Zero burning policy in land clearing
Active involvement in the Roundtable on Sustainable Palm Oil (RSPO) and leading role in developing Indonesia National Interpretation of the Principles and Criteria
Recycling of mill wastes (Empty Fruit Bunch (EFB) and Palm Oil Mill Effluent (POME))
Accurate fertiliser plan to minimise risk of pollution
Conservation of High Value Forest – in collaboration with various local and international institutions
Our environmentally friendly practices in production has been selected as a best practice example in the 2009 International UN Global Compact Yearbook
Continuous Strong Commitment to the Environment
GAR is committed to environmentally friendly production of CPO
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Extensive product portfolio with strong brand awareness serving global clients
Key Products
PHILIPPINES
AFRICA
CHINA
VIETNAM
In-house Brands
Cooking Oil Golden Fiesta, Mitra
Margarine, Cooking Oil Menara
Cooking Oil, Shortening, Margarine Red Rose
BOS, Shortening Red Rose
INDONESIA Cooking Oil, Margarine Filma, Kunci Mas, Palmboom
Major Countries
Key downstream products & in-house brands
Leading global client base
Our vertically integrated business model creates flexibility to switch between crude and refined products, facilitates traceability of products and quality control, and capture value across the supply chain
Leading global client baseOur Key Brands
Well Established Downstream Business in both Domestic and Export Markets
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Section 31Q 2009 Performance
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1Q 2009 fruits and palm product production decreased by 17% owing to weather-related problems
FFB Production (tons) 6,923,503 1,476,770 1,782,897 -17%Nucleus 5,049,810 1,103,547 1,331,714 -17%Plasma 1,873,693 373,222 451,183 -17%
FFB Yield (ton/ha) 22.42 4.42 5.77 -23%
Palm Product Production (tons) 2,072,703 446,581 538,492 -17%CPO 1,689,982 363,958 439,977 -17%PK 382,721 82,623 98,515 -16%
Oil Extraction Rate 23.12% 23.29% 23.43% -0.14%Kernel Extraction Rate 5.24% 5.29% 5.25% 0.04%
CPO Yield (ton/ha) 5.18 1.03 1.35 -24%
FY 2008 1Q 2009 1Q 2008 1Q 2009vs 1Q 2008
Production Performance
Decline in 1Q 2009 FFB yield compared to that of 1Q 2008 is led by lower 1Q yield seasonal pattern exacerbatedwith:
Second year impact of drought in 2006 and trees’ biological slowdown after the bumper crop in 2H 2007Longer than usual periods of heavy rainfall in southern part of Sumatra and South KalimantanLarger newly-matured area (trees at low-FFB-yielding-age of 4 years increased from 23,000 ha in 1Q 2008 to 47,000 ha in 1Q 2009)
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Revenue 2,986 412 747 -45%
Gross Profit 876 63 265 -76%
EBITDA 597 45 202 -78%Interest on borrowings -40 -11 -9 16%
Depreciation and amortisation -58 -16 -13 17%
Foreign exchange (loss) gain, net -34 -3 5 n.m
Net Profit attributable to equity holders1,2 1,383 9 136 -94%
US$ million FY 2008 1Q 2009 1Q 2008 1Q 2009vs 1Q 2008
Notes:1. 1Q08 net profit was restated to conform to the current period’s practice and presentation whereas the fair value of biological assets is determined on an annual basis.2. FY 2008 net profit includes gain from changes in fair value of biological assets3. Plantation companies that operate in similar regions experiencing the same weakening in production
Financial Performance
Lower 1Q 2009 results vs 1Q 2008 was attributable to:Decrease in average selling price in line with the decrease in CPO market price (FOB Belawan) by 53% to US$511 per ton in 1Q2009 from US$1,077 per ton in 1Q2008Lower sales volume driven by lower CPO production (especially South and East Kalimantan and the Lampung region) by 17% to 364,000 tons from 440,000 tons in 1Q 20083
Higher fertiliser costs due to forward buying
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Revenue 288 585 -51% 124 163 -24%
Gross Profit 56 256 -78% 7 8 -12%
Gross Profit Margin 19% 44% -25% 6% 5% 1%
EBITDA 40 196 -80% 5 6 -5%
EBITDA Margin 14% 33% -19% 4% 4% -
Net Profit attributable toequity holders1 6 131 -96% 3 5 -40%
Segmental Results
US$ million Indonesia Operations China Operations1Q09 1Q08 %Change 1Q09 1Q08 %Change
Note:1. Indonesia Operations’ 1Q08 net profit was restated to conform to the current period’s practice and presentation whereas the fair value of biological assets is determined on an annual
basis.
Lower gross profit and EBITDA margins in Indonesia Operations due to:• Lower CPO market price (FOB Belawan) of US$ 511 per ton in 1Q2009 compared to US$1,077 per ton in 1Q2008 (decrease
by 53%)• Relatively fixed cost of sales despite lower revenue, i.e. fertilisers and overhead costs
Gross profit margin of China Operations improved slightly due to the lifting of the price control at the 2nd half of 2008, while EBITDA remained at US$5.4 million from US$5.7 million in the same period last year.
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Revenue By Product and Geographical Location
Others4%
CPO37%
Unbranded Palm
Products24%
Branded Products
13%
Soybean Meals14%
Soybean Oil7%
PK1%
1Q 2009 revenue of US$412 million mainly from CPO and refined palm oil based products
Revenue – By CountryRevenue - By Product
Indo Local27%China Local
30%
Indo Export43%
Notes: Data per 1Q 2009
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Financial Position
(in US$ million) 31 Mar 09 31 Dec 08 % Change
Total Assets 6,793 6,826 -0.5%
Cash and Short-Term Investments 138 138 0.4%
Receivables and Inventories 702 757 -7.2%
Fixed Assets (including Biological Assets) 5,785 5,766 0.3%
Total Liabilities 2,077 2,119 -2.0%
Interest Bearing Debts 557 554 0.6%
Total Equity Attributable to Equity Holders 4,623 4,614 0.2%
Net Debt1/Equity Ratio 0.09x 0.09x
Net Debt1/Total Assets 0.06x 0.06x
Note:1. Interest bearing debts less cash and short-term investments
Strong balance sheet with low debt to equity ratio
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Section 4Growth Strategy
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Build on core competitive strengths to maximise long-term shareholder returns
Strategic Priorities
• Long-term target additional planted area of 50,000 ha per annum• Split between green field vs acquisition to be assessed based on opportunities
• Increase downstream production capability in cooking oil, margarine, specialty fats and oleochemicals to shift product mix to higher value-added products according to market demands
• Extend distribution reach of value-added palm products in selected key countries, especially China
• Extending our leading position in R&D to support operational efficiencies and growth
• Continuous improvement of our elite seeds to enhance yield productivity
• Sustain cost leadership through relentless focus on efficiency• Leverage operating scale together with best-in-class technology and agronomical
practices
• Extend implementation of environmental, corporate and social responsibility initiatives
• Commit to obtain RSPO certification for several of our plantations by this year
Expand high-margin upstream business
Extend research and development capabilities
Increase profit marginsthrough operational excellence
Selectively expand downstream capabilities and distribution
Deepen commitment to environmental and social responsibility
Our commitment to sound business strategies, operational excellence, and continued environmental and social responsibility will enable us to sustain growth and profitability
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Growth Strategy for 2009
Expanding Oil Palm Plantations• Target additional planted area of 30,000 ha 4,100 ha achieved in 1Q 2009• Completing a mill in Kalimantan with annual processing capacity of 200,000 tons• Building two new mills in Kalimantan and a mill in Sumatra with total annual
processing capacity of 825,000 tons targeted for completion in 2010
Adding Downstream Processing/Refining Capacity• Completing a kernel crushing plant in South Kalimantan with annual capacity of
180,000 tons targeted for completion in 1H 2009• Completing a refinery in Jakarta with annual capacity of 240,000 tons expected to
be completed in 2H 2009
Projected capex for FY 2009 growth strategy: approximately US$ 225 million
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Contact Us
Golden Agri-Resources Ltdc/o 3 Shenton Way#17-03 Shenton HouseSingapore 068805
Telephone : +65 62207720Facsimile : +65 62207020
www.goldenagri.com.sg
Contact Person : Rafael B. Concepcion, Jr. (rafaelc@goldenagri.com.sg)Suwandy Chen (swd@goldenagri.com.sg)Richard Fung (richard@goldenagri.com.sg)
If you need further information, please contact:
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