Company Presentation Golden Agri-Resources Ltd - November 2018 11
←
→
Page content transcription
If your browser does not render page correctly, please read the page content below
Company Presentation
Golden Agri-Resources Ltd
November 2018
11
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.
22
CONTENTS
1 Corporate Overview 4
2 Key Competitive Strengths 7
3 Growth Strategy 16
4 Financial Performance 19
33
CORPORATE OVERVIEW
4
OVERVIEW OF GAR
• Listed on SGX since 1999
• A leading Indonesian plantation group with integrated
operations for the production of palm oil‐based edible
oil and fat products
• It also has operations in China and India including a
deep sea port, soybean crushing plant, and production
of refined edible oil products as well as other food
products such as noodles
Plantation Profile Financial Statistics (in US$ million)
Planted Area (as of 30 Sep 2018)1 : 499,047 ha YTD Sep 2018 FY 2017
Output of Palm Products (CPO and PK) Revenue : 5,515 7,508
YTD Sep 2018 : 2,235,000 MT EBITDA2 : 370 665
FY 2017 : 2,724,000 MT Underlying Profit3 : 79 254
Key Products Equity4 : 3,851 4,007
Notes:
• Crude palm oil (CPO) • Cooking oil 1. Including plasma
• Palm kernel (PK) • Margarine 2. Earnings before tax, non‐controlling interests, interest on borrowings,
depreciation and amortisation, net gain/loss from changes in fair value of
• Palm kernel oil (PKO) • Shortening biological assets, foreign exchange gain/loss and exceptional items
• Palm kernel meal • Specialty fats 3. Net profit/loss attributable to owners of the Company, excluding net effect of net
gain/loss from changes in fair value of biological assets, depreciation of bearer
• Soybean oil and meal • Stearin plants and other non‐operating items (foreign exchange loss, net tax impact from
tax‐based asset revaluations, and other deferred tax income/expenses)
• Biodiesel • Oleo‐chemicals
4. Attributable to owners of the Company
55
LEADING INDONESIAN PLANTATION GROUP
WITH INTEGRATED OPERATIONS
Research & Plantation & CPO Milling Basic Processing Processed
Development Harvesting Products Products
Collaborate Planted area1,2 No of mills
with CIRAD
CPO Refining Branded &
Total 499k ha 46
• Nucleus 396k ha Production No of plants Unbranded
Seedling • Plasma 103k ha Capacity1 1.79mn MT 6 Cooking Oil
13.27mn MT (YTD Sep 2018) Capacity1 Margarine
Mature area2 FFB p.a. 2.18mn MT 4.68mn tpa Specialty Fats
474k ha
(FY 2017)
FFB production2 Biodiesel
Palm Kernel Biodiesel
7.73mn MT (PK) Capacity1
(YTD Sep 2018) 600k tpa
Dami Mas Production
9.61mn MT
Seed Garden & 450k MT Kernel
(FY 2017) PK Oil
SMART (YTD Sep 2018) Crushing
Biotechnology 545k MT No of plants PK Meal
Center (FY 2017) 10
Capacity1
1.76mn tpa Fatty Acids
Oleochemical
Fatty Alcohol
Notes:
1. Data as of 30 Sep 2018 Glycerine
2. Including plasma Capacity1,3
3. Including operations under JV Soap Noodles 6
440k tpa
KEY COMPETITIVE STRENGTHS
7
LEADING IN SCALE WITH VERTICALLY
INTEGRATED OPERATONS
Largest plantation group in Indonesia and second largest globally in terms of
planted area
‘000 ha Indonesia Malaysia
600
400
603
499
200
334 341
291 264
210 175 211
136
0
GAR Astra Agro Wilmar Indo Agri First SampoernaSime Darby IOI KLK Felda
(incl Resources
Lonsum)
Planted
Note: Based on latest publicly available information (including plasma, except Wilmar and Felda)
Largest plantation group in Indonesia and third largest globally in terms of CPO
production 1,2
‘000 MT Indonesia Malaysia
3,000
2,959
2,000
2,535
1,000 2,179
1,737 1,743 702 697 788
842
351
0
GAR Astra Agro Wilmar Indo Agri First Sampoerna Sime Darby IOI KLK Felda
Notes: Resources CPO
1. Based on latest full fiscal year data
2. Felda is the largest CPO producer with about 68% of its FFB processed sourced from plasma farmers and other parties 8
MANAGEMENT EXPERTISE DELIVERS HIGH
PRODUCTION YIELDS
GAR is one of the lowest cost producers with industry‐leading efficiencies
FFB yield per hectare 1 CPO yield per hectare 1,2
4.6
22 4.6
20.5 4.4
(MT/ha)
20 19.7 4.2
3.9
(MT/ha)
4.0 3.9 3.9
18.3 3.8
18 17.5 3.6
3.4 3.2
16 3.2
14.8 3.0
GAR Astra Agro First Wilmar Indo Agri
14 Notes: Resources
GAR Astra Agro First Wilmar Indo Agri
Resources 1. Based on latest full fiscal year data
Note: 2. CPO yield/ha is derived from FFB yield/ha multiply by extraction
1. Based on latest full fiscal year data rate
GAR Age Profile 1 Palm is the highest yielding vegetable oil
5%
14% 5 4.6
6%
25,097
67,768 4 3.6
30,851
3
(MT/ha)
Immature (0‐3 years)
Young (4‐6 years) 2
171,052
204,279 Prime 1 (7‐18 years)
1
0.8 0.8
0.5
Prime 2 (19‐25 years)
34% 0
Old (> 25 years)
41% Palm Oil Palm Oil Rape Oil Sun Oil Soy Oil
(GAR) (Industry)
Note:
1. Data as of 30 Sep 2018, include plasma. Average age is 16 years Source: Oil World and Company; Data as per 2017 9
UNRIVALLED TECHNOLOGY PLATFORM ENHANCING
OPERATIONAL EFFICIENCY
To monitor and manage its widely spread operations efficiently, GAR utilises a state‐
of‐the‐art proprietary information technology system
• 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
Output of Palm Products
(‘000 MT)
2,966
3000 2,911 2,953
2,768 2,724
2,640
2,510
2500 2,347
2,273
2,073
2000 1,890 1,967
1,794
1,666
1,433
1500 1,343
1,201
1,039
1000
500
0
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
CPO PK
Note:
2010, 2013 and 2016 output declined due to unfavourable weather
conditions and biological tree stress
10UNRIVALLED TECHNOLOGY PLATFORM OPTIMISING
THE PRODUCTION YIELDS AND MINIMISING COST
Superior fertiliser cost management through operational control and R&D
• Fertiliser program developed with CIRAD1
• Accurate fertiliser plan to optimize benefit especially
with more volatile climate conditions
• Application and dosage based on cost/benefit
analysis using leaf sampling (“blood test”), analysing
condition of each plantation
• GAR utilises GPS‐guided aerial manuring to cover
expansive plantation hectarage
• With this advanced aerial manuring, fertilisers are
applied more effectively compared to manual
application
Note:
1 CIRAD = Centre de cooperation Internationale en Recherche Agronomique pour le Développement
(French Agricultural Research Centre for International Development)
11STRONG POSITION ACROSS THE DOWNSTREAM
VALUE CHAIN
Origination of Processing & Logistic Excellence Destination Market
Raw Materials Product Customisation Expertise
Sourcing with •Broad range of products •Golden Stena is the •Increasing presence in
increasing traceability: including Food, largest palm oil based destination markets
• Owned estates Industrial products and charter •On shore refining in
• Third parties Biodiesel •Broad global coverage China and India, and
•Increasing sales of palm including Middle East ex‐tank operations in
based refined products and India many countries
12STRONG COMMITMENT TO THE ENVIRONMENT AND
COMMUNITY FOR SUSTAINABLE PALM OIL
Sustainable Practices for Existing Plantations
Zero waste policy by recycling of mill wastes (Empty Fruit
Bunch and Palm Oil Mill Effluent)
Precise dosage in fertiliser application plan to minimise
risk of pollution
Integrated pest management by deploying biological
controls to minimise and mitigate the impact of chemical
pesticides
Enhanced Planting Procedures
No deforestation footprint in our palm oil operations by not developing on:
High carbon stock (HCS) forests
High conservation value (HCV) forest areas
Peat lands of any depth
Continuous yield improvement in nucleus and plasma plantations managed by the Company
Zero burning policy in land clearing
Ensure free, prior and informed consent for indigenous and local communities
Comply with all relevant laws and National Interpretation of RSPO Principles and Criteria
13TOWARDS RESPONSIBLE PALM OIL PRODUCTION
Progress on Traceability to the Plantation for third‐party suppliers
• Full TTP for 49% of the palm supply chain (GAR‐owned mills and third‐
party suppliers)
• 52 third‐party mills have been engaged by GAR on TTP with 17 reporting
100% TTP as of Q3 2018
• This helps us share responsible practices and build a more resilient supply
chain
GAR continues partnership to rehabilitate orangutans
• GAR has renewed partnership with Orangutan Foundation International
(OFI)
• Plan to release 60 orangutans back into the wild over the next 3 years
• Since 2011, OFI with support from GAR has released 100 orangutans in
Central Kalimantan
• Updated programme will include community education on maintaining
biodiversity
14
14EMPOWERING COMMUNITIES The palm oil industry is effective in creating jobs and alleviating poverty Employment and Infrastructure • GAR provides employment for about 170,700 people in Indonesia • 46,300 permanent employees, 55,800 fixed‐term employees and 68,600 smallholders • We promote small and micro enterprises near our operation areas • Builds and maintains public infrastructures and facilities • Roads, bridges, places of worship and sporting facilities Education and Healthcare Note: Data as per 2017 15
GROWTH STRATEGY
16STRATEGIC PRIORITIES
Build on core competitive strengths and leverage scale to maximise long‐term
shareholder returns
Breakthrough competitive edge with cutting edge technology
To strengthen our position as the world’s leading palm oil plantation
company
Operational Be the best,
Yield
Excellence –
Improvement –
Cost Efficiency – fully‐
best‐in‐class mechanisation integrated,
research and
plantation and automation
management
development global
agribusiness
and
Accelerate presence and optimise margins in every sector of the value consumer
chain product
Leading global World class company –
merchandiser for producer of Deliver value
the Partner
Indonesia palm oil diversified value added services
products while and solutions to of Choice
added, quality
focusing on higher and sustainable customers
margin customers
products
Continued strong commitment to be leading in sustainability
17
17GROWTH STRATEGY AND OUTLOOK
Capitalising on the robust fundamentals of the industry, GAR continues to enhance its
integrated operation capabilities to optimise profit opportunities across the value chain
Upstream
• Focus on replanting with higher‐yielding seeds to sustain production growth
• Continued efforts in yield improvement, cost efficiency and sustainability initiatives
• Projected 2018 capex US$110 million
Downstream
• Extending product portfolio, global market reach and logistic facilities to enhance our
integrated operations
• Evaluating strategic options and business model restructuring
• Projected 2018 capex US$110 million
Outlook
• GAR remains confident in the robust demand growth for palm oil in the long term
• We expect CPO price to remain supported by global demand growth including from
biodiesel
18
18FINANCIAL PERFORMANCE
19FINANCIAL PERFORMANCE
Ytd Sep Ytd Sep
(in US$ million) 2017 2016
2018 2017
Revenue 5,515 5,584 7,508 7,209
Gross Profit 745 836 1,097 1,014
Gross Profit Margin 14% 15% 15% 14%
Operating Profit 111 194 241 176
Tax (53) (41) (35) 263
Underlying Profit1 79 217 254 186
Net (Loss)/Profit attributable to owners of the Company (81) 103 74 400
EBITDA2 370 508 665 572
EBITDA margin 7% 9% 9% 8%
9M 2018 results continued to be impacted by weaker CPO prices
Notes:
1. Net profit or loss attributable to owners of the Company, excluding net effect of net gain or loss from changes in fair value of biological assets, depreciation of bearer plants,
exceptional items and other non‐operating items (foreign exchange gain or loss, net tax impact from tax‐based asset revaluations, and deferred tax income or expense)
2. Earnings before tax, non‐controlling interests, interest on borrowings, depreciation and amortisation, net gain or loss from changes in fair value of biological assets, foreign
exchange gain or loss and exceptional items 20
20SEGMENTAL RESULTS
YTD Sep YTD Sep
US$ million 2017 2016
2018 2017
Revenue
Plantations and palm oil mills 1,100 1,252 1,673 1,557
Palm and laurics 4,960 4,913 6,579 6,262
Oilseeds 362 471 661 753
Others1 147 147 193 187
Inter-segment eliminations (1,054) (1,199) (1,598) (1,549)
Consolidated Revenue 5,515 5,584 7,508 7,209
EBITDA
Plantations and palm oil mills 305 378 499 379
28% 30% 30% 24%
Palm and laurics 65 122 158 181
1.3% 2.5% 2.4% 2.9%
Oilseeds 0.4 8 8 10
0.1% 1.6% 1.2% 1.3%
Others1 (0.6) 2.0 2.2 1.8
-0.4% 1.3% 1.1% 1.0%
Eliminations 0.3 (1.1) (2.5) (0.4)
Consolidated EBITDA 370 508 665 572
Note:
1. Include other consumer products in China and Indonesia mainly in food and beverages 21
21FINANCIAL POSITION
Strong balance sheet amidst challenging environment
US$ million 30‐Sep‐18 31‐Dec‐17 Change
Total Assets 8,110 8,138 ‐0.3%
Cash and short‐term investments 373 394 ‐5%
Fixed Assets1 3,693 3,692 0.04%
Total Liabilities 4,157 4,029 3%
Adjusted Net Debt2 1,888 1,684 12%
Net Debt3 2,744 2,598 6%
Liquid Working Capital4 856 914 ‐6%
Total Equity Attributable to Owners of the Company 3,851 4,007 ‐4%
Adjusted Net Debt2/Equity5 Ratio 0.49x 0.42x
Adjusted Net Debt2/Total Assets 0.23x 0.21x
Adjusted Net Debt2/EBITDA6 3.83x 2.53x
EBITDA/Interest 3.12x 4.84x
Notes: 4. Trade receivables, inventories (excluding consumables), deposits and advances to suppliers
1. Includes Bearer Plants, Property, Plant and Equipment, and Investment Properties less trade payables and advances from customers
2. Interest bearing debt less cash, short‐term investments and liquid working capital 5. Equity attributable to owners of the Company
3. Interest bearing debt less cash and short‐term investments 6. 30 September 2018 figure is based on annualised EBITDA 22
22CONTACT US
If you need further information, please contact:
Golden Agri‐Resources Ltd
c/o 108 Pasir Panjang Road
#06‐00 Golden Agri Plaza
Singapore 118535
Telephone : +65 65900800
Facsimile : +65 65900887
www.goldenagri.com.sg
Contact Person : Richard Fung
richard@goldenagri.com.sg
23
23You can also read
