R.e.a. Holdings Plc · LSE:RE.
R.e.a — FY2015 Earnings Presentation
16 slides from R.e.a's earnings presentation, April 2016
Slide 1: REA Holdings FY2015 Results - Analyst Presentation
REA Holdings FY2015 Results - Analyst Presentation April 2016
Slide 2: Topics
TOPICS FY2015 Highlights Palm Oil Consumption Operations & Development Agricultural Overview Workforce Sustainability Infrastructure Progress Land Development Financial Overview (P&L; Balance Sheet; Capital Structure) Strategy & Outlook 2
Slide 3: FY2015 Highlights
FY2015 HIGHLIGHTS Operational Crop of fresh fruit bunches (FFB): 609,389 tonnes (2014: 631,728 tonnes) Crude palm oil (CPO): 163,880 tonnes (2014: 169,466 tonnes) CPO extraction rates continue to improve; now running consistently at 24% Financial Revenues: $90.5 million (2014: $125.9 million); lower
Slide 4: FY2015 Highlights
FY2015 HIGHLIGHTS Corporate 4.2 million preference shares issued raising $7.8 million* 1.8 million ordinary shares issued raising $6.8 million* Sterling note redemption date extended to 2020 by exchange offer/placing to raising $4.1 million* 2 new bank facilities arranged in Indonesia totalling $22.
Slide 5: Palm Oil Consumption
PALM OIL CONSUMPTION Market Dynamics Worldwide consumption of major vegetable/animal oils/fats increased 3.3% Total vegetable oil production to rise 1.3% in 2016(1) Biofuel increasingly important: 13% of global vegetable oil consumption in 2015 Weakness in CPO prices in 2015 Downturn in petroleum pr
Slide 6: Palm Oil Consumption: CPO Price
PALM OIL CONSUMPTION CPO Price Average 2015 CPO price, CIF Rotterdam, $612 (2014: $828) Majority of CPO and CPKO sold in local market REA achieved average CPO price per tonne, FOB, Samarinda: $485 (2014: $665) REA achieved average CPKO price per tonne, FOB, Samarinda: $744 (2014: $951) Indonesian ex
Slide 7: Operations & Development: Agricultural Overview
OPERATIONS & DEVELOPMENT Agricultural Overview Group and smallholder FFB lower than 2014 Driven in part by El Nino effect New MIS identifying areas for additional fertiliser Poor soils or zones with run off issues Higher dosages to be applied in some areas Improving extraction rates Mill upgrades an
Slide 8: Operations & Development: Workforce
OPERATIONS & DEVELOPMENT Workforce Group workforce cut back to 7,400 (2014: 9,800) 25% reduction to improve productivity and achieve costs savings Roll out of RKPMS: key contributor to increased efficiency Operational data managed centrally: facilitates near real-time decision making Employees rewar
Slide 9: Operations & Development: Sustainability
OPERATIONS & DEVELOPMENT Sustainability REA ranked 7th out of 50 palm oil companies by Zoological Society of London’s Sustainable Palm Oil Transparency Toolkit June 2015: second biennial sustainability report published New policy framework adopted covering sustainability standard and applicable regu
Slide 10: Infrastructure and logistics progress
OPERATIONS & DEVELOPMENT Infrastructure and logistics progress Implementation of first phase of new information system integrating recording/reporting of operational/accounting information Refurbishment of 3 boilers and installation of 2nd boiler in 3rd mill for greater resilience Major part of mill
Slide 11: Land Development
OPERATIONS & DEVELOPMENT Land Development 40000 35000 30000 25000 20000 15000 10000 5000 0 1994 1995 1996 1997 1998 1999 2000 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 Mature Immature 37,097 hectares of planted land - 29,367 now mature 4,243 hectares cleared and 2,245 hectares plan
Slide 12: Financial Overview
FINANCIAL OVERVIEW 12 2015 2014 $'000 $000 Net loss arising from changes in fair value of agricultural produce inventory Cost of sales 90,515 125,865 (4,147) (1,692) (72,408) (77,914) Gross profit Net gain arising from changes in fair value of biological assets Other operating income 16,962 46,259 1
Slide 13: Financial Overview
FINANCIAL OVERVIEW 2015 2014 Non-current assets ‘Goodwill 12,578 12578 Biological assats 339,091 310,175 Property, plant and equipment 155,642 181,172 Indonesian stone and coal interests 35,338 8=— 31,834 Deferred tax assets 15,787 8909 Non-current receivables 1,395 2,749 Total non-current assets 59
Slide 14: Financial Overview: Capital Structure
FINANCIAL OVERVIEW Capital Structure 4.2m new preference shares placed in July 2015 for cash at a price of 120p, raising $7.8m net of expenses 1.8m new ordinary shares placed in October 2015 for cash at a price of 260p per shares, raising $6.8m net of expenses Sterling note exchange offer and cash p
Slide 15: Strategy & Outlook
STRATEGY & OUTLOOK Strategy Continue commitment to sustainable operation and development Improve productivity and efficiency of established agricultural operations Minimise unit production costs Greater resilience in any downturn in prices than competitors Develop land bank, capitalising on availabl
Slide 16: Strategy & Outlook: Outlook
STRATEGY & OUTLOOK Outlook Continued growth in demand for vegetable oils CPO price outlook encouraging Improvement in crop levels More rigorous harvesting routine; fertiliser regime Improving yields and extraction rates Tight cost management to continue Benefits of new information system and ‘real t