Mega First Corp. Bhd. · MYX:MFCB
Mega First Corp. Bhd — Q2 2023 Earnings Presentation
80 slides from Mega First Corp. Bhd's earnings presentation, Aug 25, 2023
Slide 1: 2Q2023 Results Briefing
2Q2023 RESULTS BRIEFING 25 August 2023
Slide 2: Agenda
AGENDA 1. 2Q2023 Financial Review For reference (updated) - Earnings Review 4. Renewable Energy Division - Balance Sheet Review 5. Packaging Division - Cash Flow Review - Capital Deployed 6. Resources Division - Gearing Position 7. Investment in Joint Venture - JV Edenor Technology Edenor Technology
Slide 3: 2Q2023 Earnings Review
2Q2023 EARNINGS REVIEW § Revenue -1.9% to RM325.7 mil due mainly to 4.4% decline in RE on lower water level during this dry season. § PBT before JV/associates +1.3% to RM122.5 mil on better Resources earnings, lower one-off accounting loss items and higher forex gain, partly offset by lower contribu
Slide 4: Renewable Energy Division
RENEWABLE ENERGY DIVISION
Slide 5: Earnings Review - Renewable Energy Division
EARNINGS REVIEW - RENEWABLE ENERGY DIVISION 2Q2023 vs 2Q2022 • Revenue -4.4% to RM144.8 mil: hydro energy sales volume -9.5%, partly offset by higher solar energy sales, 4.1% currency gain and 1% hydro tariff adjustment. • EAF -9.3%-point to 88.7%: sub-normal dry season this year versus exceptionall
Slide 6: Renewable Energy Division - Don Sahong
RENEWABLE ENERGY DIVISION - DON SAHONG Don Sahong : Jan – Jun Pakse Water Level and Capacity Factor/EAF
Slide 7: Resources Division
RESOURCES DIVISION
Slide 8: Earnings Review - Resources Division
EARNINGS REVIEW - RESOURCES DIVISION 2Q2023 vs 2Q2022 • Sales +5.0% to RM52.4 mil: currency gain partly offset by slight volume decline. • Demand for lime products softened in line with slower economic and mining activities. • PBT +52.6% to RM5.8 mil on higher revenue and a favourable change in the
Slide 9: Packaging Division
ye ee PACKAGING DIVISION
Slide 10: Earnings Review - Packaging Division
EARNINGS REVIEW - PACKAGING DIVISION 2Q2023 vs 2Q2022 • Revenue was flat at RM100.4 mil, despite a softening consumer spending. • PBT -12.9% to RM8.1 mil on intensified price competition amid a weak market.
Slide 11: Balance Sheet Review
BALANCE SHEET REVIEW At 30.6.2023 At 31.12.2022 Chany (RM milli Explanation Service concession asset 1,940.8 IRM119.6 million transtation gain, partially offset by RM43.3 million amortisation charge. PPE 510.7 4817 29.0 |RM47 million CAPEX (see below}, partially offset by RM17.1 million depreciation
Slide 12: Cash Flow Review
CASH FLOW REVIEW After tax cash from operating activities 293.4 337.0 Net cash inflow from non-operating investment activities 11.1 1.6 New capital from minority of subsidiary - 2.0 Total Cash Made Available to the Group 304.5 340.6 Investing Activities Investment in joint ventures and associates (5
Slide 13: Expansionary Investment Capital Deployed
EXPANSIONARY INVESTMENT CAPITAL DEPLOYED Total: RM119.7 mil Total: RM105.3 mil
Slide 14: Gearing Position
70.0 60 sooo 400.0 3000 200 100.0 00 GEARING POSITION 3212.2019 34122020 32.32.2021 3112202 306.2023 fm Net Debt (RM mil) meet Debt/Equity 1K) 450% 400% 350% 300% 25.0% 200% 150% 100% 93.6) Total Cash 91.0) 257.7 492.3 581.6 Total Debt -746.1 -657.9 -777.9 -712.9 -670.0 Net Debt -655.1 -564.3 -520.2
Slide 15: JV Edenor Technology
JV EDENOR TECHNOLOGY 1Q 2Q 3Q 4Q Total 1Q 2Q Total (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 1,264.9 265.0 220.7 485.7 EBITDA 19.5 18.8 7.2 24 47.9 44 (1.5) 2.9 Depreciation 8.7 8.6 8.5 8.7 34.5 9.2 9.1 18.3 and amortisation PAT 8.7 9.9 (
Slide 16: Other Updates
OTHER UPDATES Ø Serudong Power operations - Recommenced operations in May 2022 to facilitate future sale of the subsidiary. - Earnings presented under “Investment Holding & Others”. - Minimal Profit and Loss contribution to Group. - Operational economic benefit/loss to accrue to 3rd party Preference
Slide 17: Prospects for Remaining Quarters of 2023
PROSPECTS FOR REMAINING QUARTERS OF 2023 Ø Strong headwinds from: • Economic challenges such as demand downturn, cost inflation, currency fluctuations and interest rate hikes; • Supply chain disruptions; and • Sustainability and environmental concerns. Ø We expect these challenges to continue in the
Slide 18: Capital Commitment as at 30 June 2023
PROSPECTS FOR REMAINING QUARTERS OF 2023 CAPITAL COMMITMENT AS AT 30 JUNE 2023
Slide 19: Prospects for Remaining Quarters of 2023: Renewable Energy
PROSPECTS FOR REMAINING QUARTERS OF 2023 Renewable Energy Division Ø Estimated EAF for 2023 about 3.6% lower to 91% (2022: 94.6%). Ø EAF abnormally high in 2022 due to: 1) near historical-high water level during last year’s dry season; 2) the deferment of 2022 annual turbine maintenance to February/
Slide 20: Portfolio Summary as at 30 June 2023
PROSPECTS FOR REMAINING QUARTERS OF 2023 PORTFOLIO SUMMARY AS AT 30 JUNE 2023
Slide 21: 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 3Q2024. Expect
Slide 22: 5th Turbine Construction Progress
RENEWABLE ENERGY DIVISION 5th TURBINE CONSTRUCTION PROGRESS
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: Prospects: Resources Division
PROSPECTS FOR REMAINING QUARTERS OF 2023 Resources Division Ø Demand for lime products was soft in 2Q2023, in line with slowing economic and mining activities in the region. Ø With continued uncertainties surrounding global demand, geopolitical development and China’s domestic challenges, demand for
Slide 26: Prospects: Packaging Division
PROSPECTS FOR REMAINING QUARTERS OF 2023 Packaging Division Ø Weak consumer demand and intensified price competition are expected to persist in 2H2023. Ø Management will strive to expand its customer base to grow sales, raise production efficiency and reduce wastage to cushion their impact on margin
Slide 27: Prospects: Edenor Technology
PROSPECTS FOR REMAINING QUARTERS OF 2023 Edenor Technology Ø Management expects progressive margin improvement in 2H2023 following extensive upgrading works and new facility installation in 1H2023. Ø The process of fine-tunning of the upgraded plants and the commissioning of a new facility is expect
Slide 28: Key Sustainability Updates
KEY SUSTAINABILITY UPDATES Board ESG Q1 Officiation of MFCB’s update meeti Sustainability vision and mission at Stenta (Packaging Division) May Officiation of MFCB's Sustainability vision and mission at RCI (Resources Division) = @ io @) Employees Sustainability > Training Developed MFCB's Submitted
Slide 29: Our Sustainability Strategy
OUR SUSTAINABILITY STRATEGY
Slide 30: Our Sustainability Plan for 2023
OUR SUSTAINABILITY PLAN FOR 2023
Slide 31: Environment Dashboard - 1H2023
ENVIRONMENT DASHBOARD - 1H2023
Slide 32: Social Dashboard - 1H2023
SOCIAL DASHBOARD - 1H2023 SOCIAL eo fk UO a & 24@& Total = =Chinese «Malay «indian © Others Senior Management Ratio in Workforce Average Training hours Ethnicity Non-Executive Note: + All data are as at 30 June 2023 ma Ss Ge ae
Slide 33: Safety Dashboard - 1H2023
SAFETY DASHBOARD - 1H2023 SAFETY Work-Related Injuries Os Ag — i= AA 0 0 2 0 0 Fatalities High Cases Fatalities Cases Consequence Injuries Notes: + Data are for all three main Divisions except Hexachase Group under the Packaging Division * All data are as at 30 June 2023
Slide 34: Governance Dashboard - 1H2023
GOVERNANCE DASHBOARD - 1H2023
Slide 35: Remaining Slides for Reference (Updated)
Remaining Slides for Reference (Updated)
Slide 36: Renewable Energy Don Sahong
RENEWABLE ENERGY DON SAHONG
Slide 37: Renewable Energy Division Don Sahong
RENEWABLE ENERGY DIVISION DON SAHONG
Slide 38: 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% (2022: 94.6%) compared to other large hydro of between 40-70%. • Projected average energy gen
Slide 39: Renewable Energy Division Don Sahong
RENEWABLE ENERGY DIVISION DON SAHONG
Slide 40: Renewable Energy Division Don Sahong
RENEWABLE ENERGY DIVISION DON SAHONG
Slide 41: Don Sahong: 2020-2023 Pakse Water Level and Capacity Factor
RENEWABLE ENERGY DIVISION DON SAHONG Don Sahong : 2020-2023 Pakse Water Level and Capacity Factor/EAF
Slide 42: Renewable Energy C&I Solar
RENEWABLE ENERGY C&I SOLAR
Slide 43: Renewable Energy Division C&I Solar
RENEWABLE ENERGY DIVISION C&I SOLAR
Slide 44: Renewable Energy Division Financial Highlights
RENEWABLE ENERGY DIVISION FINANCIAL HIGHLIGHTS
Slide 45: 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 46: 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 47: Packaging
PACKAGING
Slide 48: 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 49: 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 50: Packaging Division State-of-Art Machinery
PACKAGING DIVISION STATE-OF-ART MACHINERY Fuji Kikai Printing Machine Fuji Kikai 14 colours Rotogravure Printing Machine
Slide 51: Packaging Division State-of-Art Machinery
PACKAGING DIVISION STATE-OF-ART MACHINERY Super Combi 5000 Super Combi 5000 Lamination Machine
Slide 52: Packaging Division State-of-Art Machinery
PACKAGING DIVISION STATE-OF-ART MACHINERY Flat Handle Paper Bag Machine Twisted Handle Paper Bag Machine
Slide 53: Packaging Division State-of-Art Machinery
PACKAGING DIVISION STATE-OF-ART MACHINERY SOS Machine Flat & Satchel Bag Machine
Slide 54: Packaging Division State-of-Art Machinery
PACKAGING DIVISION STATE-OF-ART MACHINERY Reifenhauser LLDPE Line Vacuum Metallizer Slitter for Metallized Film
Slide 55: Packaging Division State-of-Art Machinery
PACKAGING DIVISION STATE-OF-ART MACHINERY Reifenhauser LLDPE Line Vacuum Metallizer
Slide 56: Packaging Division State-of-Art Machinery
PACKAGING DIVISION STATE-OF-ART MACHINERY Bruckner OPP Line High Capacity Roll Slitting and Winding Machine
Slide 57: Packaging Division Product Range
PACKAGING DIVISION PRODUCT RANGE
Slide 58: Packaging Division Product Range
PACKAGING DIVISION PRODUCT RANGE
Slide 59: Packaging Division Product Range
PACKAGING DIVISION PRODUCT RANGE
Slide 60: Packaging Division Customer Base
PACKAGING DIVISION CUSTOMER BASE
Slide 61: Packaging Division Financial Highlights
PACKAGING DIVISION FINANCIAL HIGHLIGHTS
Slide 62: Resources
RESOURCES
Slide 63: 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 64: 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 65: 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. 80% Financial Highlights
Slide 66: Investment in Joint Venture Edenor Technology
INVESTMENT IN JOINT VENTURE EDENOR TECHNOLOGY
Slide 67: 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 68: Investment in Joint Venture Edenor Technology
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 69: Edenor Technology Plant Site
EDENOR TECHNOLOGY PLANT SITE
Slide 70: Edenor Technology Plant Layout
EDENOR TECHNOLOGY PLANT LAYOUT
Slide 71: Edenor Technology TPG Plant
EDENOR TECHNOLOGY TPG PLANT
Slide 72: 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 73: Plantation
“a Z. N NTATIO
Slide 74: Plantation Update
PLANTATION 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 of
Slide 75: Plantation Update
PLANTATION 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 76: Plantation Update
PLANTATION UPDATE 1) Background 2) Land 3) Plans • Main crops: coconuts & • 50-year concession on 6,428 • Planned planting in 2023: 350- macadamia. hectares. 400 hectares. • Cumulative investment as at • Estimated plantable area: • Target to complete planting by 30 June 2023: RM127 mil 4,000 - 4,500
Slide 77: Plantation Update
PLANTATION UPDATE
Slide 78: Plantation Update
PLANTATION UPDATE
Slide 79: Plantation Update
PLANTATION UPDATE
Slide 80: Thank You!
THANK YOU!
Mega First Corporation Berhad — Q2 2023 Earnings Presentation on 6ix