Mega First Corp. Bhd. · MYX:MFCB
Mega First Corp. Bhd — Q4 2023 Earnings Presentation
85 slides from Mega First Corp. Bhd's earnings presentation, Feb 29, 2024
Slide 1: 4Q2023 Results Briefing
4Q2023 RESULTS BRIEFING 29 February 2024
Slide 2: Agenda
AGENDA 1. Financial Review For reference (updated) - 4Q Earnings Review 4. Renewable Energy Division - 2023 vs 2022 Net Profit Attributable to Shareholders Reconciliation 5. Packaging Division - Balance Sheet Review 6. Resources Division - Cash Flow Review 7. Investment in Joint Venture - Capital De
Slide 3: 4Q Earnings Review
4Q EARNINGS REVIEW § Exclude SPSB (disposed in May 2023), revenue +1.8% to RM324.2 mil. § Core PBT +8.6% to RM135.0 mil. § Investment holding & others swung from RM2.2 mil loss to RM7.7 mil profit due mainly to: i. Forex gain; ii. FV gain on put option liability; iii. FV gain on investment property;
Slide 4: Renewable Energy Division
RENEWABLE ENERGY DIVISION
Slide 5: Earnings Review - Renewable Energy Division
EARNINGS REVIEW - RENEWABLE ENERGY DIVISION 4Q2023 vs 4Q2022 • Revenue +4.3% to RM168.6 mil: 2.7% currency gain, 1% hydro tariff adjustment and higher solar energy sales (+62.5%). • EAF was flat at 97.4%. • Solar revenue +62.5% to RM2.5 mil: installed capacity 17.9 MW 27.0 MW. • PBT +5.6% to RM120.7
Slide 6: Renewable Energy Division - Don Sahong
RENEWABLE ENERGY DIVISION - DON SAHONG Don Sahong : January - December Pakse Water Level and Capacity Factor/EAF
Slide 7: Resources Division
RESOURCES DIVISION
Slide 8: Earnings Review - Resources Division
EARNINGS REVIEW - RESOURCES DIVISION 4Q2023 vs 4Q2022 • Revenue -7.4% to RM46.4 mil: lower sales volume of lime products on weaker mining activities. • PBT +82.4% to RM6.2 mil on a favourable change in the sales mix and improved production efficiency.
Slide 9: Packaging Division
ne | \\ PACKAGING DIVISION
Slide 10: Earnings Review - Packaging Division
EARNINGS REVIEW - PACKAGING DIVISION 4Q2023 vs 4Q2022 • Revenue +1.4% to RM100.3 mil: broader customer base, despite challenging operating environment and fire incident. • PBT +22.7% to RM8.1 mil on a favourable change in the sales mix, lower production cost and lower operating expenses.
Slide 11: 2023 vs 2022 Net Profit Attributable to Shareholders Reconciliation
2023 vs 2022 NET PROFIT ATTRIBUTABLE TO SHAREHOLDERS RECONCILIATION
Slide 12: Balance Sheet Review
BALANCE SHEET REVIEW At 31. (RM million) 2023 At 31. 2022 (RM million) Cc ges (RM million) Explanation Service concession asset 1,940.0 1,940.8 (0.8)|RM88.6 million amortisation charge, largely offset by RM87.8 million translation gain. PPE 531.9 481.7 50.2 |RM120.5 million CAPEX (see below), partia
Slide 13: Cash Flow Review
CASH FLOW REVIEW Operating profit before working capital changes posted 6.5% increase from RM642.7 mil to RM684.5 mil.
Slide 14: Expansionary Investment Capital Deployed
EXPANSIONARY INVESTMENT CAPITAL DEPLOYED 2023: RM695.8 mil 2022: RM192.1 mil
Slide 15: Gearing Position
700.0 600.0 500.0 400.0 300.0 200.0 100.0 00 GEARING POSITION 31122019 31.12.2020 mmm Net Debt (RIM mil) 31.12.2021 31122022 Net Debt/Equity (6) 45.0% 400% 35.0% 300% 25.0% 200% 15.0% 10.0% 5.0% 0.0% 31.12.2023 At 31.12.2019 | At 31.12.2020 | At 31.12.2021 | At 31.12.2022 | At 31.12.2023 (RM mil) (R
Slide 16: JV Edenor Technology
JV EDENOR TECHNOLOGY 2022 2023 1Q 2Q 3Q 4Q Total 1Q 2Q 3Q 4Q Total (RM mil) (RM mil) (RM mil) (RM mil) (RM mil) (RM mil) (RM mil) (RM mil) (RM mil) (RM mil) Revenue 305.0 375.3 360.6 224.0 1,264.9 265.0 220.7 207.8 198.3 891.8 EBITDA 19.5 18.8 7.2 2.4 47.9 44 (1.5) 3.1 3.2 9.2 Depreciation 87 8.6 85
Slide 17: Other Updates
OTHER UPDATES Ø Acquisition of additional 20% (effective 15%) in DSPC • Total consideration: USD95.0 million. • Effective interest: 80% 95% • Completed in December 2023 • Bank borrowing: US$55 million. Ø Concession Agreement (“CA”) for DSPC 5th turbine expansion • Terms finalised awaiting formal app
Slide 18: Prospects for 2024
PROSPECTS FOR 2024 Ø Challenges and uncertainties • Operating environment in 2024 expected to present ongoing challenges. • Demand recovery outlook uncertain, adding unpredictability to the economy. • Inflation subdued in some areas but persistently high in others, complicating economic dynamics. •
Slide 19: Prospects for 2024 - Capital Commitment
PROSPECTS FOR 2024 CAPITAL COMMITMENT AS AT 31 DECEMBER 2023 Factory construction: RM56.8 mil Hydro: RM138.2 mil Production machinery: Solar: RM180.3 mil RM90.0 mil
Slide 20: Prospects for 2024 - Renewable Energy Division
PROSPECTS FOR 2024 Renewable Energy Division Ø 2023 Average EAF: 91.4% (2022: 94.6%) – higher than the estimated long-term simulation average of 89%. Ø We expect PBT to grow significantly in 2024. Management’s optimism is premised on: - Expected further currency gain, assuming the RM:USD exchange ra
Slide 21: Prospects for 2024 - Portfolio Summary
PROSPECTS FOR 2024 PORTFOLIO SUMMARY AS AT 31 DECEMBER 2023
Slide 22: Renewable Energy Division - Expansion
RENEWABLE ENERGY DIVISION - EXPANSION Renewable Energy Projects on Hand Ø 65 MW 5th turbine expansion of Don Sahong costing approx. US$70-75 million or approx. US$1.1- 1.2mil/MW (vs US$1.4 mil/MW for the first 4 turbines). Construction commenced in December 2021. Expected completion in July 2024. Ex
Slide 23: 5th Turbine Construction Progress
RENEWABLE ENERGY DIVISION 5th TURBINE CONSTRUCTION PROGRESS
Slide 24: 5th Turbine Construction Progress
RENEWABLE ENERGY DIVISION 5th TURBINE CONSTRUCTION PROGRESS
Slide 25: 5th Turbine Construction Progress
RENEWABLE ENERGY DIVISION 5th TURBINE CONSTRUCTION PROGRESS
Slide 26: Prospects for 2024 - Resources Division
PROSPECTS FOR 2024 Resources Division Ø Operating environment in 2024 expected to be challenging due to subdued mining activities and weaker domestic industrial demand. Ø Management actively working on expanding regional customer base to counter soft demand. Ø We expect total lime product sales volu
Slide 27: Prospects for 2024 - Packaging Division
PROSPECTS FOR 2024 Packaging Division Ø Operating environment expected to remain challenging in 2024, similar to previous year. Ø Management remains optimistic about sustaining earnings growth. Optimism grounded in initiatives to broaden customer base and increase penetration. Ø Progress being made
Slide 28: Packaging Division - Bangi (Stenta)
PACKAGING DIVISION BANGI (STENTA)
Slide 29: Packaging Division - Bangi (Stenta)
PACKAGING DIVISION BANGI (STENTA)
Slide 30: Packaging Division - Melaka (Hexachase)
PACKAGING DIVISION MELAKA (HEXACHASE)
Slide 31: Packaging Division - Melaka (Hexachase)
PACKAGING DIVISION MELAKA (HEXACHASE)
Slide 32: Prospects for 2024 - Edenor Technology
PROSPECTS FOR 2024 Edenor Technology Ø The operating environment of the oleochemical industry will likely remain challenging in 2024: - Overcapacity. - Intense price competition. Ø We are optimistic the management team will be able to turnaround the business in 2024 as production reliability stabili
Slide 33: Key Sustainability Updates
KEY SUSTAINABILITY UPDATES FTSE4Good — Developed Submitted MFCB's first Collected | Employees Sustainabil ' Board ESG | Officiation of MFCB's MFCB's Carbon Disclosure Tier 1 meyer aining Submitted MFOB's Course on Qt update | Sustainability vision —_—_Sustainabilit Project (CDP) updates for leting T
Slide 34: Key Sustainability Updates
Investor Engagement Key topics discussed: KEY SUSTAINABILITY UPDATES KWSP EPF ISS ESG> Amundi ASSET MANAGEMENT ft VOB ies MFCB’s ESG goals and strategy, Management of ESG risks, Sustainable investments (involvement in any coal-related power industry), Environment and Human Rights issues. Rating Agen
Slide 35: Our Sustainability Strategy
OUR SUSTAINABILITY STRATEGY
Slide 36: Our Sustainability Plan for 2024
OUR SUSTAINABILITY PLAN FOR 2024
Slide 37: Environment Dashboard - Jan-Dec 2023
ENVIRONMENT DASHBOARD - JAN-DEC 2023
Slide 38: Social Dashboard - Jan-Dec 2023
SOCIAL DASHBOARD - JAN-DEC 2023
Slide 39: Safety Dashboard - Jan-Dec 2023
SAFETY DASHBOARD - JAN-DEC 2023
Slide 40: Governance Dashboard - Jan-Dec 2023
GOVERNANCE DASHBOARD - JAN-DEC 2023
Slide 41: Remaining Slides for Reference (Updated)
Remaining Slides for Reference (Updated)
Slide 42: Renewable Energy - Don Sahong
RENEWABLE ENERGY DON SAHONG
Slide 43: Renewable Energy Division - Don Sahong
RENEWABLE ENERGY DIVISION DON SAHONG
Slide 44: Renewable Energy Division - Don Sahong
RENEWABLE ENERGY DIVISION DON SAHONG • 260 MW run-of-river hydropower project located on the mainstream of the Mekong River in Southern Laos. • High projected average Energy Availability Factor (EAF) of 89% (2023: 91.4%) compared to other large hydro of between 40-70%. • Projected average energy gen
Slide 45: Renewable Energy Division - Don Sahong
RENEWABLE ENERGY DIVISION DON SAHONG
Slide 46: Renewable Energy Division - Don Sahong
RENEWABLE ENERGY DIVISION DON SAHONG
Slide 47: Renewable Energy Division - Don Sahong
RENEWABLE ENERGY DIVISION DON SAHONG Don Sahong : 2020-2023 Pakse Water Level and Capacity Factor/EAF
Slide 48: Renewable Energy - C&I Solar
RENEWABLE ENERGY C&I SOLAR
Slide 49: Renewable Energy Division - C&I Solar
RENEWABLE ENERGY DIVISION C&I SOLAR
Slide 50: Renewable Energy Division - Financial Highlights
RENEWABLE ENERGY DIVISION FINANCIAL HIGHLIGHTS
Slide 51: Renewable Energy Division - Strategy & Strength
RENEWABLE ENERGY DIVISION STRATEGY & STRENGTH Strategy • Leveraging current strong and stable cashflow of approx. RM500 mil per annum from existing RE portfolio to pursue selective RE opportunities in the region. Strength • Strong project management/execution track record → Don Sahong completed sign
Slide 52: Renewable Energy Division - Investment Approach
RENEWABLE ENERGY DIVISION INVESTMENT APPROACH • New investments must fulfil the following criteria: 1) Attractive project IRR (varies between markets) 2) Project manageability 3) Project bankability 4) Project risk acceptability • Avoid herd instinct. • Strict investment discipline.
Slide 53: Packaging
PACKAGING
Slide 54: Packaging Division
PACKAGING DIVISION Mission statement “To become a leading provider of innovative, environmentally sustainable, safe and competitive packaging solutions” The division currently manufactures and sells paper bags, flexible packaging products, and stickers and labels. Global trends • Consumers and our c
Slide 55: Packaging Division - Differentiating Strategy
PACKAGING DIVISION DIFFERENTIATING STRATEGY • We develop packaging solutions that promote the use of ONLY fully recyclable materials (e.g. paper and mono-family plastic materials). • Malaysia’s first and only manufacturer that only uses 100% toluene-free print ink and solvent-free lamination process
Slide 56: Packaging Division - State-of-Art Machinery
PACKAGING DIVISION STATE-OF-ART MACHINERY Fuji Kikai Printing Machine Fuji Kikai 14 colours Rotogravure Printing Machine
Slide 57: Packaging Division - State-of-Art Machinery
PACKAGING DIVISION STATE-OF-ART MACHINERY Super Combi 5000 Super Combi 5000 Lamination Machine
Slide 58: Packaging Division - State-of-Art Machinery
PACKAGING DIVISION STATE-OF-ART MACHINERY Flat Handle Paper Bag Machine Twisted Handle Paper Bag Machine
Slide 59: Packaging Division - State-of-Art Machinery
PACKAGING DIVISION STATE-OF-ART MACHINERY SOS Machine Flat & Satchel Bag Machine
Slide 60: Packaging Division - State-of-Art Machinery
PACKAGING DIVISION STATE-OF-ART MACHINERY Reifenhauser LLDPE Line Vacuum Metallizer Slitter for Metallized Film
Slide 61: Packaging Division - State-of-Art Machinery
PACKAGING DIVISION STATE-OF-ART MACHINERY Reifenhauser LLDPE Line Vacuum Metallizer
Slide 62: Packaging Division - State-of-Art Machinery
PACKAGING DIVISION STATE-OF-ART MACHINERY Bruckner OPP Line High Capacity Roll Slitting and Winding Machine
Slide 63: Packaging Division - Product Range
PACKAGING DIVISION PRODUCT RANGE
Slide 64: Packaging Division - Product Range
PACKAGING DIVISION PRODUCT RANGE
Slide 65: Packaging Division - Product Range
PACKAGING DIVISION PRODUCT RANGE
Slide 66: Packaging Division - Financial Highlights
PACKAGING DIVISION FINANCIAL HIGHLIGHTS
Slide 67: Resources
RESOURCES
Slide 68: Resources Division Profile
RESOURCES DIVISION PROFILE • Largest quicklime producer in Malaysia with 1,960 tonne per day installed kiln capacity. • Owned one of the largest limestone reserves, sufficient for more than 100 years supply. • Wide industrial applications: steel, mining, pulp and paper, agriculture, construction mat
Slide 69: Resources Division Success Factors
RESOURCES DIVISION SUCCESS FACTORS • Fully integrated facilities • Own high purity limestone reserves, on-site and at vicinity • High and consistent lime quality • Cost leadership • Diversified customer base
Slide 70: Resources Division Mission & Financial Highlights
RESOURCES DIVISION MISSION & FINANCIAL HIGHLIGHTS Mission • To be the leading lime producer in the region • 2015-2018: Completed massive expansion plan. +160% increase in kiln capacity 760 tonnes 1,960 tonnes per day • Current plant utilisation rate approx. 70% Financial Highlights
Slide 71: Investment in Joint Venture - Edenor Technology
INVESTMENT IN JOINT VENTURE EDENOR TECHNOLOGY
Slide 72: Investment in Joint Venture - Edenor Technology
INVESTMENT IN JOINT VENTURE EDENOR TECHNOLOGY • A 50:50 JV between MFCB and 9M Technology Sdn Bhd (RM40 million paid up capital). • Set up to acquire Emery’s Asia Pacific oleochemical business from Sime Darby Plantation Berhad and PTT GC International Limited (“Acquisition”). • The Acquisition was c
Slide 73: Emery's Asia Pacific Business
INVESTMENT IN JOINT VENTURE EDENOR TECHNOLOGY Emery’s Asia Pacific business • Integrated 300,000-tonne per annum capacity oleochemical complex on a 34-acre site at Telok Panglima Garang. • Original plant cost: > RM1.1 billion • Plant book value @ 31 Oct 2021: approx. RM430 million • Plant Acquisitio
Slide 74: Edenor Technology Plant Site
EDENOR TECHNOLOGY PLANT SITE
Slide 75: Edenor Technology Plant Layout
EDENOR TECHNOLOGY PLANT LAYOUT
Slide 76: Edenor Technology TPG Plant
EDENOR TECHNOLOGY TPG PLANT
Slide 77: Investment in Joint Venture - Turnaround Strategy
INVESTMENT IN JOINT VENTURE TURNAROUND STRATEGY • Full set of new management team in place. • Major cultural and operational transformation underway. Key turnaround strategies • Simplify management processes: leaner, and more responsive and effective. • Revamp purchasing, lower cost of goods/service
Slide 78: Food Security
FOOD SECURITY
Slide 79: Food Security Update
FOOD SECURITY UPDATE “RESPECT NATURE, WORK WITH NATURE” • Water and irrigation key to sustainable cultivation: 1) Protect and improve O’plai River catchment areas to collect and store rainwater; 2) Development wetland pockets, creation of mini lakes along extensive riparian corridors. • Development
Slide 80: Food Security Update
FOOD SECURITY UPDATE • MFCB obtained approval from the Royal Government of Cambodia for the concession of a plot of land measuring 6,428 hectares situated in Mondulkiri Province, Kingdom of Cambodia for agricultural development. • The term of the concession is 50 years, commencing from 29 April 2013
Slide 81: Food Security Update
FOOD SECURITY UPDATE 1) Background 2) Land 3) Plans • Main crops: coconuts & • 50-year concession on 6,428 • Target to complete planting by macadamia. hectares. end of 2025/2026. • Cumulative investment as at • Estimated plantable area: • Evaluating various 31 December 2023: RM140 4,000 - 4,500 hect
Slide 82: Food Security Update
FOOD SECURITY UPDATE
Slide 83: Food Security Update
FOOD SECURITY UPDATE
Slide 84: Food Security Update
FOOD SECURITY UPDATE
Slide 85: Thank You!
THANK YOU!
Mega First Corporation Berhad — Q4 2023 Earnings Presentation on 6ix