Mega First Corp. Bhd. · MYX:MFCB
Mega First Corp. Bhd — Q2 2021 Earnings Presentation
42 slides from Mega First Corp. Bhd's earnings presentation, Aug 20, 2021
Slide 1: Mega First Corporation Berhad 2Q 2021 Results Briefing
MEGA FIRST CORPORATION BERHAD 2Q 2021 RESULTS BRIEFING 20 AUGUST 2021 Yeow See Yuen
Slide 2: Agenda
AGENDA 1. Results Overview 2. Interim Dividend 3. Results review and Prospects by Division A. Renewable Energy Division B. Resources Division C. Packaging Division 4. Balance Sheet Analysis 5. Cash Flow Analysis 6. Gearing Position 7. Plantation update 8. Investment in Edenor Technology Sdn Bhd and
Slide 3: Results Overview
RESULTS OVERVIEW Revenue - 2Q2021 (RM207.8 million) Revenue - 1H2021 (RM401.6 million) Investment Holding Investment Holding 2% 2% Packaging Packaging 14% 15% Resources 17% Resources 20% Renewable Energy Renewable Energy 63% 67% MEGA FIRST CORPORATION BERHAD - AUG 2021 2
Slide 4: Results Overview (Cont'd)
RESULTS OVERVIEW (CONT’D) PBT - 2Q2021 (RM103.7 million) PBT - 1H2021 (RM190.6 million) Investment Holding Investment Holding Resources Packaging -1% Packaging 0% 4% 1% Resources 2% 6% Renewable Energy Renewable Energy 94% 92% MEGA FIRST CORPORATION BERHAD - AUG 2021 3
Slide 5: Results Overview (Cont'd)
RESULTS OVERVIEW (CONT’D) 2Q2021 2Q2020 % change 1H2021 1H2020 % change RM'000 RM'000 RM'000 RM'000 Continuing Operations Revenue Renewable Energy 138,153 130,425 6% 252,388 233,688 8% Resources 35,478 26,624 33% 80,042 61,093 31% Packaging 30,014 21,615 39% 60,694 40,857 49% Investment holding & ot
Slide 6: Interim Dividend
INTERIM DIVIDEND • The Board has declared an interim single-tier dividend of 3.25 sen per ordinary share for the financial year ending 31 December 2021 (FY2020: 3 sen, after adjusting for stock-split). • The entitlement and payment dates will be announced soon. MEGA FIRST CORPORATION BERHAD - AUG 20
Slide 7: Renewable Energy Division
RENEWABLE ENERGY DIVISION Renewable Energy Division 2021 2020 YoY Change (RM million) 1Q 2Q 1H 1Q 2Q 1H 1Q 2Q 1H Revenue 114.2 138.2 252.4 103.3 130.4 233.7 10.6% 5.9% 8.0% PBT 78.2 98.7 176.8 64.7 93.7 158.4 20.9% 5.3% 11.7% EAF (%) 81.2 95.2 88.2 70.7 86.7 78.7 14.9% 9.8% 12.1% Average RM/USD Rate
Slide 8: Renewable Energy Division (Cont'd)
RENEWABLE ENERGY DIVISION (CONT’D) 1H2021 vs 1H2020 • Revenue +8.0% to RM252.4 million due to 12.1% increase in EAF to 88.2%, partially offset by 3.6% appreciation of RM against the USD. • Solar revenue was RM1.3 million (1H2020: Nil). Marginal PBT contribution. • Higher water level during this year
Slide 9: Renewable Energy Division (Cont'd)
RENEWABLE ENERGY DIVISION (CONT’D) Pakse Water Level - 2021 vs 2020 Capacity factor/EAF - 2021 vs 2020 105% 5.00 4.50 100% 4.00 95% 3.50 90% 3.00 85% 2.50 80% 2.00 75% 1.50 1.00 70% 0.50 65% 0.00 60% 1-Jan 16-Jan 31-Jan 15-Feb 2-Mar 17-Mar 1-Apr 16-Apr 1-May 16-May 31-May 15-Jun 30-Jun 1-Jan 16-Jan
Slide 10: Renewable Energy Division (Cont'd)
RENEWABLE ENERGY DIVISION (CONT’D) Commissioned 12MWp solar C&I Solar photovoltaic plant, including 9MW solar Investment carport which is the largest under Net Received LOA from a local university for the Achievements Energy Metering Scheme in Malaysia installation of a 3.7MWp solar system. in 1H 20
Slide 11: Renewable Energy Division (Cont'd) - Prospects
RENEWABLE ENERGY DIVISION (CONT’D) Prospects • Wet season will continue until November. • 3Q EAF expected to decline sequentially and YoY due to a longer maintenance this year. • 4Q EAF to normalise to 4Q levels last year. • Overall 2021 EAF will be higher than 86.4% in 2020. • Management remains ho
Slide 12: Renewable Energy Division (Cont'd)
RENEWABLE ENERGY DIVISION (CONT’D) MEGA FIRST CORPORATION BERHAD - AUG 2021 11
Slide 13: Renewable Energy Division (Cont'd)
RENEWABLE ENERGY DIVISION (CONT’D) MEGA FIRST CORPORATION BERHAD - AUG 2021 12
Slide 14: Resources Division
RESOURCES DIVISION Resource Division 2021 2020 YoY Change (RM million) 1Q 2Q 1H 1Q 2Q 1H 1Q 2Q 1H Revenue 44.6 35.5 80.0 34.5 26.6 61.1 29.3% 33.3% 31.0% PBT 6.0 4.4 10.4 4.3 2.0 6.3 39.6% 122% 65.5% 2Q2021 vs 2Q2020 • Covid-19 related measures in Malaysia and the export countries had a less severe
Slide 15: Resources Division (Cont'd)
RESOURCES DIVISION (CONT’D) 1H2021 vs 1H2020 • As explained earlier, Covid-19 related measures in Malaysia and the export countries had a less severe impact on demand in 1H this year when compared to the same period last year. • Consequently, revenue rose 31% to RM80.0 million, led by 26.8% increase
Slide 16: Resources Division (Cont'd) - Prospects
RESOURCES DIVISION (CONT’D) Prospects • Export demand to soften: (a) Price competitiveness eroded by escalating freight charges; and, (b) Scheduled maintenance plant shutdown by a major customer in 3Q. • Domestic demand generally stable, but occasionally interrupted by customer plant shut down due t
Slide 17: Resources Division (Cont'd)
RESOURCES DIVISION (CONT’D) MEGA FIRST CORPORATION BERHAD - AUG 2021 16
Slide 18: Packaging Division
PACKAGING DIVISION Packaging Division 2021 2020 YoY Change (RM million) 1Q 2Q 1H 1Q 2Q 1H 1Q 2Q 1H Revenue 30.7 30.0 60.7 19.2 21.6 40.9 59.4% 38.9% 48.6% PBT 2.6 1.4 4.0 0.5 1.7 2.1 442.2% -15.6% 87% 2Q2021 vs 2Q2020 • Revenue +38.9% to RM30.0 million on higher overseas demand for paper products an
Slide 19: Packaging Division (Cont'd) - Prospects
PACKAGING DIVISION (CONT’D) Prospects • Consolidation of Stenta from 1 August 2021 to significantly lift divisional earnings. For reference, Stenta’s revenue was RM190.4 million and PBT was RM22.8 million in FY2020. • Hexachase Group revenue continue to grow on new customer orders and increased pene
Slide 20: Packaging Division (Cont'd)
PACKAGING DIVISION (CONT’D) MEGA FIRST CORPORATION BERHAD - AUG 2021 19
Slide 21: Packaging Division (Cont'd)
PACKAGING DIVISION (CONT’D) MEGA FIRST CORPORATION BERHAD - AUG 2021 20
Slide 22: Packaging Division (Cont'd)
PACKAGING DIVISION (CONT’D) MEGA FIRST CORPORATION BERHAD - AUG 2021 21
Slide 23: Packaging Division (Cont'd)
PACKAGING DIVISION (CONT’D) MEGA FIRST CORPORATION BERHAD - AUG 2021 22
Slide 24: Balance Sheet Review
BALANCE SHEET REVIEW Changes in Key Balance Sheet Items As at 30.6.2021 As at 31.12.2020 Change Explanation (RM million) (RM million) RM'000 Intangible asset 1,957 1,932 25 RM64.4 MIL translation gain, less RM39.8 MIL amortisation PPE & ROU assets 413 355 58 Capex RM68.1 MIL(see below), less depreci
Slide 25: Cash Flow Analysis
CASH FLOW ANALYSIS Cash Flow Analysis 6-month ended 6-month ended Change 30-Jun-21 30-Jun-20 (RM million) (RM million) (RM million) After-tax cash from Operating Activities 274.4 123.0 151.4 New capital raised - ESOS and Warrants conversion - 84.1 (84.1) -Share Issued to minority of subsidiaries 3.5
Slide 26: Gearing Position
GEARING POSITION MFCB Group Net Gearing As at 30.6.2021 As at 31.12.2020 Change (RM million) (RM million) (RM million) Total Cash 254.9 93.6 161.3 Total Debt (674.3) (657.9) (16.4) Net Debt (419.4) (564.3) 144.8 Equity 2,449.2 2,165.6 283.6 Net Debt / Equity Ratio 17.1% 26.1% MEGA FIRST CORPORATION
Slide 27: Plantation Update
PLANTATION UPDATE 1) Background 2) Land 3) Plans • Main crops: coconuts & • 50-year concession on • Planned planting in 2021: macadamia 6,420 hectares 600 hectares • Est. plantable area: 4,500 • Target to complete planting • Cumulative investment hectares by end of 2024. as at 31 Mar 2021: RM78.5 mi
Slide 28: Plantation Update
PLANTATION UPDATE MFCB obtained approval from the Royal Government of Cambodia for the concession of a plot of land measuring 6,420 hectares situated in the Namlear Wildlife Sanctuary Zone, Mondulkiri Province, Kingdom of Cambodia for agricultural development. The term of the concession is 50 years,
Slide 29: Plantation Update
PLANTATION UPDATE MEGA FIRST CORPORATION BERHAD – AUG 2021 28
Slide 30: Plantation Update
PLANTATION UPDATE MEGA FIRST CORPORATION BERHAD – AUG 2021 29
Slide 31: Plantation Update
PLANTATION UPDATE MEGA FIRST CORPORATION BERHAD – AUG 2021 30
Slide 32: Plantation Update
PLANTATION UPDATE MEGA FIRST CORPORATION BERHAD – AUG 2021 31
Slide 33: Plantation Update
PLANTATION UPDATE MEGA FIRST CORPORATION BERHAD – AUG 2021 32
Slide 34: Investment in Edenor Technology Sdn Bhd
INVESTMENT IN EDENOR TECHNOLOGY SDN BHD PROPOSED ACQUISITION OF EMERY OLEOCHEMICALS (M) SDN BHD AND EMERY SPECIALTY CHEMICALS SDN BHD BY EDENOR TECHNOLOGY SDN BHD Introduction 1. On 19 August 2021, MFCB announced that Edenor Technology, a 50:50 JV between MFCB and 9M Technologies (“Purchaser”), has
Slide 35: Post-Restructuring Group Structure
INVESTMENT IN EDENOR TECHNOLOGY SDN BHD PROPOSED ACQUISITION OF EMERY OLEOCHEMICALS (M) SDN BHD AND EMERY SPECIALTY CHEMICALS SDN BHD BY EDENOR TECHNOLOGY SDN BHD 4. Post-Restructuring group structure of EOM and ESC (Group Companies): MEGA FIRST CORPORATION BERHAD – AUG 2021 34
Slide 36: About the Group Companies
INVESTMENT IN EDENOR TECHNOLOGY SDN BHD About the Group Companies 1. The Group Companies is principally involved in the production and sale of basic oleo and specialty chemical made from palm and palm kernel oils. These natural-based chemicals, offer renewable and sustainable solution towards the de
Slide 37: Basis of Purchase Consideration
INVESTMENT IN EDENOR TECHNOLOGY SDN BHD Basis of purchase consideration RM38 million Target Equity is based on Enterprise Value of RM243 million, comprising: 1. Fixed Assets and Technical/Business Know-How at RM73 million (83% discount to BV); and 2. Target Net Working Capital of RM170 million (see
Slide 38: Rationale of the Proposed Acquisition
INVESTMENT IN EDENOR TECHNOLOGY SDN BHD Rationale of the Proposed Acquisition 1. Consistent with MFCB’s SDG policy and long-term objective of talent recruitment; 2. Helps strengthen the core technical capabilities of Plantation Division when it expands downstream into agricultural produce processing
Slide 39: Proforma Financial Effects of the Proposed Acquisition
INVESTMENT IN EDENOR TECHNOLOGY SDN BHD Proforma Financial Effects of the Proposed Acquisition and Investment in Edenor Technology 1. Proforma financial effects illustration are based on the effects on MFCB’s audited consolidated financial statements for FY2020, assuming the following transactions a
Slide 40: Investment in Edenor Technology Sdn Bhd
INVESTMENT IN EDENOR TECHNOLOGY SDN BHD MEGA FIRST CORPORATION BERHAD – AUG 2021 39
Slide 41: Plant Overview and Capacity
INVESTMENT IN EDENOR TECHNOLOGY SDN BHD Plant Key Performance Indicators Overview Products Capacity (MT per year) Fatty Acid 80,000 Fatty Alcohol 80,000 Basics Glycerin 15,000 Methyl Ester 12,000 Methyl Ester 73,000 Hydrogenation & Fractionation Home & Personal Wellness 12,000 (Sodium Lauryl Sulfate
Slide 42: Thank You
THANK YOU MEGA FIRST CORPORATION BERHAD – AUG 2021 41
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