36 slides from M.p. Evans's earnings presentation, Apr 14, 2014
Slide 1: 2013 preliminary results
2013 preliminary results 14 April 2014 Preliminary results April 2014
Slide 2: Agenda
Agenda 1 1. Overview 2. Corporate overview 3. Operational highlights Indonesian palm oil Australian beef cattle Malaysian property 4. Preliminary results 5. Outlook and investment case 6. Appendices Preliminary results April 2014
Slide 3: Corporate overview & financial highlights
Corporate overview & financial highlights Preliminary results April 2014
Slide 4: Corporate overview
Corporate overview 3 A UK, AIM-listed agri-business group producing palm oil in Indonesia and beef cattle in Australia, with residual Malaysian property assets in the course of disposal Geographical spread of Group assets Malyasia - property 9% Australia - beef cattle 16% Indonesia - palm oil 75% Pr
Slide 5: Financial highlights
Financial highlights 4 Profit for the year US$22.87 million (2012 US$21.55 million) Indonesian palm-oil profits maintained despite lower palm-oil prices Another challenging year for the Australian cattle operations as dry conditions prevailed Improved results from Malaysian property development Divi
Slide 6: Strategy
Strategy Preliminary results April 2014
Slide 7: Strategy – Indonesian palm oil
Strategy– Indonesian palm oil 6 To invest further in a fast-growing, World vegetable-oil consumption 2013: 157 million tonnes low-cost food commodity 2003: 96 million tonnes 3% 2% To expand the Group’s oil-palm areas 3% 2013 4% in Indonesia in an environmentally- 36% sustainable manner 9% Continuall
Slide 8: Strategy – Australian beef cattle
Strategy – Australian beef cattle 7 To maximise productivity on Woodlands and NAPCo To capitalise on any future strategic opportunities re NAPCo To dispose of Woodlands in due course Preliminary results April 2014
Slide 9: Strategy – Malaysian property
Strategy – Malaysian property 8 To continue to benefit from property-development and raw- land-sale profits at Bertam Properties To dispose of the small Bertam Estate and the 40% interest in Bertam Properties at appropriate time to reinvest in Indonesian palm oil Preliminary results April 2014
Slide 10: Operational overview – Indonesian palm oil
Operational overview – Indonesian palm oil Preliminary results April 2014
Slide 11: Operational overview – palm oil
Operational overview – palm oil 10 Overall Group f.f.b. crop 344,200 tonnes, 9% higher than 2012 Associates’ f.f.b. crop 6% lower at 395,600 as enhanced replanting programme begins Palm-oil prices overall 14% lower than 2012 due to high world stocks in first half but improvement in last quarter Comm
Slide 12: Operational overview – palm oil (continued)
Operational overview – palm oil (continued) 11 Planting programme on new projects started in 2005 – Group f.f.b. crops now increasing significantly Actual and projected fresh fruit bunch crop (Tonnes) Preliminary results April 2014
Slide 13: Increasing oil-palm plantings – planted areas
Increasing oil-palm plantings – planted areas 12 Planting programme on new projects started in 2005 – f.f.b. crops now increasing significantly At 31 December 2013 Ha Established North Sumatran estates 9,500 New project: Kalimantan 9,800 New project: Bangka 4,100 Total majority owned areas 23,400 Ef
Slide 14: Palm oil – opportunity for growth
Palm oil – opportunity for growth 13 Remaining plantable areas on new projects Group Smallholders Estimated Total when Estimated Total when still to plant fully planted still to plant fully planted (Ha) (Ha) (Ha) (Ha) Kalimantan 800 10,600 400 4,400 Bangka 1,900 6,000 2,000 4,000 Musi Rawas 7,000 7,
Slide 15: Operational overview – Australian beef cattle
Operational overview – Australian beef cattle Preliminary results April 2014
Slide 16: Operational overview – Australian beef cattle
Operational overview – Australian beef cattle 15 Woodlands Promising start to 2013 season with beneficial rainfall resulting in good pastures but drought in second half Weight gain increased by 45% from own and third-party (“agisted”) cattle Downward pressure on prices of lighter-weight cattle (as p
Slide 17: Operational overview – Australian beef cattle (continued)
Operational overview – Australian beef cattle (continued) 16 NAPCo 2013 a poor, dry season on majority of properties Loss for 2013 similar to that for 2012 Prices for grain-finished cattle (as produced by NAPCo) weakened in first half but improved in second as Australian Dollar weakened Year-end cat
Slide 18: Operational overview – Malaysian property
Operational overview – Malaysian property Preliminary results April 2014
Slide 19: Operational highlights – Malaysian property
Operational highlights – Malaysian property 18 Operational highlights Significant increase in number of completed developed-property sales in 2013 Raw-land sales very small but others in pipeline Group share of profit for 2013 US$4.40 million compared with loss of US$0.35 million in 2012 Preliminary
Slide 20: Preliminary results
Preliminary results Preliminary results April 2014
Slide 21: Preliminary results – overall results and financial position
Preliminary results – overall results and financial position 20 Increase in profit despite lower CPO price Revenue similar to 2012 though mill gate price down US$ 79 to US$ 695 Profit for the year up 6.1% EPS up 3.5 US cents to 36.0 US cents Significant foreign exchange loss Continuing good operatin
Slide 22: Preliminary results – profit growth
Preliminary results – profit growth 21 Gross profit of US$ 24.7 million 7.4% increase in gross profit (after IAS41) Measured before IAS 41: a 5.5% increase in gross profit Break-even in cattle ‘farm’ result Plantation gross profit margin stable at 33% Modest increase of US$ 0.7 million in share of a
Slide 23: Preliminary results – other operating flows
Preliminary results – other operating flows 22 Biological gain and planting expenditure both lower than in 2012 but combined effect similar at gain of US$ 2.8 million Main effect of biological-asset adjustment now through elimination of depreciation charge on plantings: a benefit of US$ 3.3 million
Slide 24: Preliminary results – funding
Preliminary results – funding 23 Ambitious capital programme continues on new projects US$ 19.8 million term loan tied to plantation project in Kalimantan reaches maturity in 2014; finalising terms to refinance US$ 10.0 million of this Also finalising terms to convert existing US$ 10 million revolvi
Slide 25: Outlook and investment case
Outlook and investment case Preliminary results April 2014
Slide 26: Outlook for palm oil
Outlook for palm oil 25 World annual vegetable-oil Prices strengthened in early 2014 – consumption per capita (Kg / head) currently around US$ 900/tonne 70.0 60.0 50.0 Crop growth expected to continue: 40.0 planned plantings on Musi Rawas 30.0 20.0 contributing to growth from 2018 10.0 0.0 Revenue i
Slide 27: Outlook for beef
Outlook for beef 26 Welcome rain in early 2014 in Queensland and Northern Territory Australian beef-cattle prices rising in early 2014 Weakening Australian Dollar is assisting competitiveness of Australian beef Source: Oil World Preliminary results April 2014
Slide 28: Investment case
Investment case 27 M. P. Evans well positioned to benefit from sharply-increasing f.f.b. crops Young age profile of plantations will generate increasing crop for years to come Good cash flow provides a strong platform for continued expansion Good long-term price prospects for both Indonesian palm oi
Slide 29: Appendices
Appendices Preliminary results April 2014
Slide 30: Appendix: Area of operations
Appendix: Area of operations 29 Preliminary results April 2014
Slide 31: Appendix: Strategic disposal of Malaysian assets
Appendix: Strategic disposal of Malaysian assets 30 2005 strategy envisaged disposing of more than half of the Group’s assets for re-investment in new projects 140 120 100 US$ million 80 60 40 20 0 Sold to date To be sold Malaysian Estates Thai and other Bertam Properties Bertam Properties and Estat
Slide 32: Appendix: Consolidated income statement
Appendix: Consolidated income statement 31 Year ended Year ended 31 December 31 December 2013 2012 US$’000 US$’000 Revenue 82,186 83,213 ———— ———— Gross profit 24,735 23,035 Biological-asset adjustment 2,794 2,123 Exchange differences (8,322) (1,761) Administrative expenses, etc. (4,436) (4,275) ———
Slide 33: Appendix: Consolidated balance sheet
Appendix: Consolidated balance sheet 32 Year ended Year ended 31 December 31 December 2013 2012 US$’000 US$’000 Non-current assets Goodwill 1,157 1,157 Biological assets, property, plant and equipment 257,713 246,696 Investments 122,958 130,852 Deferred-tax asset and non-current debtor 14,996 6,454
Slide 34: Appendix: Consolidated cash flow
Appendix: Consolidated cash flow 33 Year ended Year ended 31 December 31 December 2013 2012 US$’000 US$’000 Net cash generated by operating activities 19,494 33,897 ———— ———— Investing activities Interest received 972 1,338 Sale of shares to minority 498 — Proceeds on disposal of assets 358 239 Purc
Slide 35: Appendix: CPO price
Appendix: CPO price 34 Crude palm-oil price, c.i.f. Rotterdam (US$) 1,400 1,300 1,200 1,100 1,000 900 800 700 600 500 400 May 09 May 10 May 11 May 12 May 13 Sep 09 Sep 10 Sep 11 Sep 12 Sep 13 Jan 09 Jan 10 Jan 11 Jan 12 Jan 13 Jan 14 Preliminary results April 2014
Slide 36: Appendix: Cattle prices
Appendix: Cattle prices 35 Eastern Young Cattle Indicator and 100-day short fed cattle prices (A$ / Kg) 4.50 4.00 3.50 3.00 2.50 EYCI (Woodlands) 100-day short fed (NAPCo) 2.00 May 09 May 10 May 11 May 12 May 13 Sep 09 Sep 10 Sep 11 Sep 12 Sep 13 Jan 09 Jan 10 Jan 11 Jan 12 Jan 13 Jan 14 Preliminary