M.p. Evans Group Plc · LSE:MPE
M.p. Evans — H1 2016 Earnings Presentation
28 slides from M.p. Evans's earnings presentation, Sep 12, 2016
Slide 1: 2016 Interim report
2016 Interim report Monday 12 September 2016
Slide 2: Agenda
Slide 1. Corporate overview, financial highlights and strategy 1 2. Interim results 5 3. Operational overview 10 Indonesian palm oil Malaysian property 4. Outlook and investment case 16 Appendices 19 Interim results 2016
Slide 3: 1. Corporate overview, financial highlights and strategy
1 1. Corporate overview, financial highlights and strategy Interim results 2016
Slide 4: A strong track record of growth
A strong track record of growth … 2 A UK AIM-listed agri-business group producing palm oil in Indonesia 26,600 hectares of majority-owned oil-palm plantations 8,100 hectares of associated smallholder co-operative oil-palm plantations Strong crop and revenue growth expected due to young avera
Slide 5: With a new strategic focus on palm oil
… with a new strategic focus on palm oil 3 To realise and sustain revenue growth, by investing further in palm oil, a low-cost food commodity World vegetable oil consumption (Tonnes million) To maintain the Group’s position of operational excellence, productivity and low unit cost in oil palm
Slide 6: Profit increased due to disposal of cattle business
Profit increased due to disposal of cattle business 4 Profit for the period US$18.0 million (first half 2015 US$15.4 million) Interim dividend maintained at 2.25p per share, in addition to special dividend of 5p paid on 17 August Indonesian palm-oil profits lower due to weaker CPO price and lo
Slide 7: 2. Interim results
5 2. Interim results Interim results 2016
Slide 8: Gross profit down on lower crops and lower prices
Gross profit down on lower crops and lower prices … 6 Weaker gross profit at US$5.1 million (first half 2015 US$8.9 million) Revenue 20% lower than 2015 caused by lower crops following exceptional dry weather and lower prices Mill-gate price down to US$543 (first half 2015 US$582) Plantation
Slide 9: Increase in operating profit and continuing operating cash inflow
… but increase in operating profit and continuing operating cash inflow … 7 Increase in operating profit despite lower crops, revenue, and gross profit Unrealised foreign exchange translation gains on stronger Indonesian Rupiah Profit of US$11.7 million from NAPCo (first half 2015 US$7.6 milli
Slide 10: Strong trading and disposal profit from NAPCo
… and strong trading and disposal profit from NAPCo 8 Disposal of NAPCo concluded on 20 July but substantially complete at 30 June so profit therefore recognised Profit of US$11.7 million Share of trading profit largely due to upward revaluation of herd: US$4.3 million (2015: US$7.6 million)
Slide 11: 3. Operational overview – Indonesian palm oil
9 3. Operational overview – Indonesian palm oil Interim results 2016
Slide 12: Lower crops due to exceptional dry period
Lower crops due to exceptional dry period … 10 Group ffb crop 170,300 tonnes, 9% lower than first half 2015; crops from associated smallholder co-operatives down 15% Ffb crops in joint venture and minority held estates 3% higher at 177,000 tonnes Crop performance due to extended period of exce
Slide 13: Which will dampen crop growth in 2017
… which will dampen crop growth in 2017 11 Planting programme on new projects started in 2005 – Group ffb crops on an upward path interrupted by unusual and severe dry spell El Niño event has negatively affected crops in 2016 and will also impact 2017 Actual and projected crop 2010 – 2022 (Tonne
Slide 14: Planted areas are the engine of crop and revenue growth
Planted areas are the engine of crop and revenue growth … 12 Planting programme on new projects started in 2005 Current planting has reached nearly 35,000 hectares 30 June 2016 Ha New projects Kalimantan 10,250 Bangka 5,450 Musi Rawas 1,500 17,200 Established North Sumatran estates 9,350 Total m
Slide 15: Significant areas are still to plant
… and significant areas are still to plant 13 Remaining estimated plantable areas on new projects Group Smallholders Estimated still Total when Estimated Total when to plant fully planted still to plant fully planted Ha Ha Ha Ha Kalimantan 350 10,600 4,400 Bangka 550 6,000 1,800 4,000 Musi Rawas 5
Slide 16: 3. (cont'd) Operational overview – Malaysian properties
14 3. (cont’d) Operational overview – Malaysian properties Interim results 2016
Slide 17: Bertam Properties: development activity continues
Profit development activity continues 15 Bertam Properties Results reflect only sales fully completed 217 completed sales of developed properties in first half 2016; none in first half of 2015 Number of sales in process and likely to be recognised in second half 2016 Group share of profit fo
Slide 18: 4. Outlook and investment case
16 4. Outlook and investment case Interim results 2016
Slide 19: There are signs of an upswing in the sector
There are signs of an upswing in the sector … 17 Prices have strengthened since the half year – currently around US$750 per tonne Age profile of Group planting Better rainfall returning to Group’s areas (Hectares) Young age profile of plantings – approaching prime production Planting and cro
Slide 20: M.P. Evans well placed to benefit
… with M.P. Evans well placed to benefit 18 Increasing crop and revenue from existing, and new, plantations for years to come High extraction rates important in keeping unit costs low Good cash flow provides a strong platform for continued expansion Good long-term price prospects for Indones
Slide 21: Appendices
19 Appendices Interim results 2016
Slide 22: Appendix: Area of operations
Appendix: Area of operations 20 Palm oil Cattle Interim results 2016
Slide 23: Appendix: Strategic disposal of Malaysian assets
Appendix: Strategic disposal of Malaysian assets 21 Interim results 2016
Slide 24: Appendix: Consolidated income statement
Appendix: Consolidated income statement 22 6 months ended 6 months ended Year ended 30 June 2016 30 June 2015 31 December 2015 Restated* Restated* US$'000 US$'000 US$'000 Continuing operations Revenue 30,354 38,029 72,528 Gross profit 5,121 8,869 15,059 Foreign-exchange gain/(loss) 1,338 (3,997) (5,
Slide 25: Appendix: Consolidated balance statement
Appendix: Consolidated balance statement 23 At 30 June At 30 June At 31 December 2016 2015 2015 Restated* Restated* US$'000 US$'000 US$'000 Non-current assets Goodwill 1,157 1,157 1,157 Property, plant and equipment 196,571 197,014 185,902 Investments 48,219 96,508 97,664 Deferred-tax asset 15,983 1
Slide 26: Appendix: Consolidated cash flow
Appendix: Consolidated cash flow 24 6 months ended 6 months ended Year ended 30 June 2016 30 June 2015 31 December 2015 Restated* Restated* US$'000 US$'000 US$'000 Net cash generated by operating activities 3,815 7,876 20,231 Investing activities Interest received 349 505 894 Proceeds on disposal of
Slide 27: Appendix: CPO price
Appendix: CPO price 25 Price of crude palm oil (US$ per tonne, cif Rotterdam) Interim results 2016
Slide 28: Appendix: Cattle prices
Appendix: Cattle prices 26 Cattle prices, 100-day short fed (A$ per kilogram) Interim results 2016