Faran Sugar Mills Ltd · PSX:FRSM
Faran Sugar Mills — Investor Presentation (2019)
28 slides from Faran Sugar Mills's investor presentation, 2019
Slide 1: Corporate Briefing Session 2019
CORPORATE BRIEFING SESSION 2019
Slide 2: Sugar Industry Overview
Sugar Industry Overview •About 110 countries produce sugar from either cane or beet, and 8 countries produce sugar from both cane and beet. •World Sugar Production is around 180 million tons, whereas Production Pakistan's sugar production is around 6 million tons. •largest sugar producer by far is B
Slide 3: Key Attributes: Dynamics of Sugar Industry 2018-19
KEY ATTRIBUTES DYNAMICS OF SUGAR INDUSTRY 2018-19 Province Mills Operated Number of Mills: 89 Listed Sugar Punjab 45 40 Operated: 78 Companies: 23 Sindh 38 32 KPK 6 6 Sugar Cane Area Sugar Cane Sugar Cane (In Hectares Avg.): Production: Crushing: 1,180,000 66.960 million tons 49.768 million tons Sug
Slide 4: Sugarcane Area and Production by Province
SUGARCANE AREA AND PRODUCTION BY PROVINCE Area (‘000' Hectares) Production (‘000' Tons) Province 2016-2017 2017-2018 2018-2019 2016-2017 2017-2018 2018-2019 Punjab 777 860 735 49,613 55,070 43,896 Sindh 320 332 334 20,208 20,610 17,670 KPK 119 148 111 5,629 7,610 5,394 Baluchistan - - - - - - Total
Slide 5: Cane Crushing, Production and Recovery & Molasses Production in Pakistan
CANE CRUSHING, PRODUCTION AND RECOVERY & MOLASSES PRODUCTION IN PAKISTAN: Sugar Molasses Period Cane Crushing Production Production Recovery (%) (M.T) (M.T) (M.T) 2018-19 49,768,113 5,210,744 10.47 2,239,565 2017-18 65,615,550 6,576,534 10.16 2,954,622 2016-17 70,989,948 7,005,678 9.87 3,077,962 201
Slide 6: Sugar Cane Indicative Price in Comparison with Season's Avg. Retail Price
SUGAR CANE INDICATIVE PRICE PER 40 KG IN COMPARISON WITH SEASON’S AVG. RETAIL PRICE PER KG: Sugar price (Rs.) Season Avg. Period retail / kg Sindh Punjab KPK (Rs.) 2019-2020 192 190 190 N/A 2018-2019 182 180 180 58.80 2017-2018 182 180 180 53.57 2016-2017 182 180 180 61.43 2015-2016 172 180 180 63.7
Slide 7: Production Share of Top Players
PRODUCTION SHARE OF TOP PLAYERS Production Productio Sr. Sugar Mill Region in 2019 Ranking n in 2018 Ranking No. (M.T.) (M.T.) Punjab & 1 JDW 640,278 1 888,711 1 Sindh 2 Tandlianwala Punjab 255,375 2 220,698 3 3 Hamza Punjab 231,006 3 382,495 2 4 Etihad Punjab 183,332 4 170,855 7 5 Chasma KPK 166,25
Slide 8: Sugar Export
SUGAR EXPORT Allocation Exports Period of Quota Subsidy M.T (‘000’) Federal government: Nil Punjab province: Rs. 5.35/kg on a sliding scale of $ 383.80 - 2018-2019 1,100 *127 435.00 per metric tons subject to maximum limit of Rs. 3 billion. Federal government: Rs. 10.70/kg on a sliding scale o
Slide 9: Top Ten Sugar Exporter as per Approved Quota from SBP
TOP TEN SUGAR EXPORTER AS PER APPROVED QUOTA FROM SBP *Sugar Export in Sugar Export in S.No. Sugar Mill Ranking Ranking 2019 (M.T.) 2018 (M.T.) 1 JDW 116,413 1 192,744 1 2 Hunza 91,041 2 162,350 2 3 Fatima 64,567 3 123,815 3 4 Al-Moiz 62,306 4 N/A N/A 5 Etihad 58,786 5 N/A N/A 6 Indus 53,821 6 N/A N
Slide 10: 10 Largest Sugar Producers & Consumers in the World
10 Largest Sugar Producers & Consumers in the World based on 2017-18 10 LARGEST SUGAR PRODUCERS 10 LARGEST SUGAR CONSUMERS Sr. No. Production (in Consumption Name Million M.T) Name (in Million M.T) 1 Brazil 38.10 India 24.52 2 India 22.45 European Union 18.00 3 European Union 17.52 China 16.09 4 Tha
Slide 11: Sugar Industry – Outlook for Season 2019-20
SUGAR INDUSTRY – OUTLOOK FOR SEASON 2019-20 Since last year, Area planted and harvested Consumption continues sugarcane area and is estimated around 1,120,000 to grow modestly and is production are on a hectares and production of forecast at 5.6 million declining trend and is sugarcane 63,610,000 to
Slide 12: Supply Chain
SUPPLY CHAIN Distributor / Retail End Farmer Sugar Mill Industrial Stores Consumers Consumers
Slide 13: Major Sugar Mills Comparison – Sindh Zone
MAJOR SUGAR MILLS COMPARISON – SINDH ZONE
Slide 14: Sindh Zone Mills Production and Profitability Analysis
MIRPURKHAS SHAHMURAD AL-ABBAS HABIB FARAN SUGAR MEHRAN SUGAR SUGAR SUGAR SUGAR SUGAR PRODUCTION ANALYSIS Cane Crushing MT 670,581 577,396 702,259 500,270 467,828 771,864 Cane Crushing Maund 16,764,525 14,434,900 17,556,475 12,506,750 11,695,700 19,296,600 Sugar Recovery % 11.01% 11.25% 11.44% 11.08%
Slide 15: Sugar & Molasses Production - Recovery
Sugar & Molasses Production - Recovery Cane Crushing & Duration of Season Sugar Production Molasses Production Molasses Recovery Sugar Recovery Cane Crushing Duration of Season 90 14% 900 135 144 80 132 800 12% 120 70 700 98 108 10% 94 Metric Tons in '000 60 89 Metric Tons In '000 600 88 96 91 8% 84
Slide 16: Profitability Analysis
Profitability Analysis Gross Profit / (Loss) Profit / (Loss) Before Interest & Tax Profit / (Loss) After Tax Earning / (Loss) per Share 1,400 80 64.05 1,200 57.08 60 1,000 40 800 Rs. in Millions 24.60 600 20 15.21 9.95 7.97 400 0 200 1,206 1,112 1,196 283 832 380 608 817 302 820 896 403 194 331 44 6
Slide 17: Faran Sugar Mills Limited
FARAN SUGAR ~ MILLS LIMITED
Slide 18: Financial Performance
FINANCIAL PERFORMANCE 2019 2018 Rs. '000 Rs. '000 Local Sales 4,653,414 1,885,998 Export Sales 492,288 3,440,935 Export Subsidy - 1,120,910 Gross sales 5,145,702 6,447,843 Profit before taxation 293,650 328,850 Share in profit from equity accounted 227,579 295,537 investments-Net 521,229 624,387 Les
Slide 19: Contraction in sales revenue due to fall in sales volume
Finance cost almost The contraction in sales doubled mainly due to Huge financing revenue mainly due to massive short-term obtained during the year steep fall in sales volume borrowing as well as due to sluggish sales and of refined sugar. increase in financing rate to stuck up export subsidy. doubl
Slide 20: Operational Performance Season 2019-20
OPERATIONAL PERFORMANCE SEASON 2019-20 FSML started its mills on November 25, 2019, but majority of mills in Sindh Zone had to shut down due to non-supply/ insufficient quantum of sugarcane. FSML also stopped cane crushing on December 21, 2019 due to inadequate supplies and high rate of sugarcane. F
Slide 21: Certifications During the Year
CERTIFICATIONS DURING THE YEAR • Awarded ‘HALAL CERTIFICATION’ by SANHA Halal Associates Pakistan Pvt Limited. • It ensures the features and quality of our product is according HALAL to the rules established by the Islamic Council CERTIFICATION • JCR-VIS Credit Rating Company Limited performed credi
Slide 22: Long Term Investment and Future Projects
LONG TERM INVESTMENT AND FUTURE PROJECTS • DISTILLERY PROJECT in colaboration with two other sugar mills. • It is one of Pakistan largest ENA Ethanol producer and leading food grade CO2 UNICOL supplier and is ranked amongst the top 100 exporters of Pakistan for 2018. • It has designed production cap
Slide 23: Shariah Compliant Financing
FSML manage its financial requirements only through SHARIAH COMPLIANT PRODUCTS from prominent Islamic banks, and is a RIBA / INTEREST FREE COPORATE ENTITY, providing HALAL earnings to its stakeholders
Slide 24: Performance Analysis
PERFORMANCE ANALYSIS Description Unit 2014 2015 2016 2017 2018 2019 OPERATIONAL |Cane Crushing M.tons 897,803 764,025 789,657 993,389 959,378 670,581 IProcessing-Raw Sugar M.tons - - - - - - sugar Production M.tons 92,824 85,052 86,785 106,318 105,633 73,696 IMolasses Production M.tons. 45,797 38,23
Slide 25: Performance Analysis
PERFORMANCE ANALYSIS [Description Unit 2014 2015 2016 2017 2018 2019 BALANCE SHEET Share Capital Rs. ‘000 250.07| 250.07| 250.07| 250.07| 250.07| 250.07 Reserves Rs. ‘000 1,054.01 1,295.38} 1,654.24 1,345.25 1,787.43, 2,070.06 Shareholders’ Equity Rs. ‘000. 1,304.08) 1,545.45} 1,904.33) 1,595.32 2,0
Slide 26: Cane Crushing and Sugar & Molasses Production
1000 8 Metric Tons (in Thousands) 8 200 CANE CRUSHING AND SUGAR & MOLASSES PRODUCTION Crushing © Sugar Produced A. Molasses Produced 73.696 52.081 ry A A 45,797 49.347 38.235 r. A 35.825 a 31.459 3 aq 5 3 Rg 3 8 S 8 * 9 4 ing a on a i=] 8 2 2 3 g & 2014 2015 2016 2017 2018 2019 120 11% 5% 7 3% SUGAR
Slide 27: Dividend Per Share, Payout & Yield
DIVIDEND PER SHARE, PAYOUT & YIELD Dividend Per Share Dividend payout Dividend yeild 8 60% 54% 6.75 7 50% 6 5.00 40% 5 3.75 4 30% 25% 3 21% 20% 2 16% - 1.00 1.00 10% 8.4% 1 7% 5.0% 2.7% 3.5% 1.4% - 0.0% 0% 0% 2014 2015 2016 2017 2018 2019
Slide 28: Market Value & Breakup Value Per Share
MARKET VALUE & BREAKUP VALUE PER SHARE lm EPS Market value per share Break-Up Value 2014 2016 160 120 100 40 20 ~40 20 18 16 14 12 + 10 Ratios (2) PROFITABILITY RATIOS Current Ratio t= Quick Ratio = Interest Cover 17.56 [\ I \