36 slides from M.p. Evans's earnings presentation, Apr 14, 2015
Slide 1: 2014 preliminary results
2014 preliminary results 14 April 2015 Preliminary results April 2015
Slide 2: Agenda
Agenda 1 1. Overview 2. Corporate overview 3. Operational highlights Indonesian palm oil Australian beef cattle Malaysian property 4. Preliminary results 5. Outlook and investment case 6. Appendices Preliminary results April 2015
Slide 3: Corporate overview & financial highlights
Corporate overview & financial highlights Preliminary results April 2015
Slide 4: Corporate overview
Corporate overview 3 A UK, AIM-listed agri-business group producing palm oil in Indonesia and beef cattle in Australia, with residual Malaysian property assets in the course of disposal Geographical spread of Group assets Malaysia 10% Australia 15% Indonesia 75% Preliminary results April 2015
Slide 5: Financial highlights
Financial highlights 4 Profit for the year US$37.10 million (2013 US$22.87 million) Indonesian palm-oil profits substantially higher despite lower palm-oil prices Australian cattle operations profitable despite another challenging year as dry conditions prevailed Reduction in profit of Malaysian pro
Slide 6: Strategy
Strategy Preliminary results April 2015
Slide 7: Strategy – Indonesian palm oil
Strategy – Indonesian palm oil 6 To invest further in a fast-growing, low-cost food commodity To expand the Group’s oil-palm areas in Indonesia in an environmentally-sustainable World vegetable-oil consumption manner and composition (Million tonnes) 200.0 Continually to maintain and, 180.0 Other veg
Slide 8: Strategy – Australian beef cattle
Strategy – Australian beef cattle 7 To maximise productivity on Woodlands and NAPCo To capitalise on any future strategic opportunities re NAPCo To dispose of Woodlands in due course Preliminary results April 2015
Slide 9: Strategy – Malaysian property
Strategy – Malaysian property 8 To continue to benefit from property-development and raw- land-sale profits at Bertam Properties To dispose of the small Bertam Estate and the 40% interest in Bertam Properties at appropriate time to reinvest in Indonesian palm oil Preliminary results April 2015
Slide 10: Operational overview – Indonesian palm oil
Operational overview – Indonesian palm oil Preliminary results April 2015
Slide 11: Operational overview – palm oil
Operational overview – palm oil 10 Overall Group f.f.b. crop 385,400 tonnes, 12% higher than 2013 Associates’ f.f.b. crop 395,400 tonnes, identical to 2013 Palm-oil prices overall 4% lower than 2013 at US$821 per tonne, as abundant oil-seed crops harvested and mineral-oil prices fell Commendable imp
Slide 12: Operational overview – palm oil (continued)
Operational overview – palm oil (continued) 11 Planting programme on new projects started in 2005 – Group f.f.b. crops now increasing significantly Actual and projected fresh fruit bunch crop (Tonnes) 1,200,000 Co-operatives 1,000,000 Group 800,000 600,000 400,000 200,000 0 2009 2010 2011 2012 2013
Slide 13: Increasing oil-palm plantings – planted areas
Increasing oil-palm plantings – planted areas 12 Planted at 31 December 2014 Ha New projects: Kalimantan 9,800 Bangka 4,700 Musi Rawas 100 14,600 Established North Sumatran estates 9,500 Total majority owned areas 24,100 Effective share of established 8,000 associates planted area Total 32,100 Plant
Slide 14: Palm oil – opportunity for growth
Palm oil – opportunity for growth 13 Remaining plantable areas on new projects Group Smallholders Estimated still Total when Estimated still Total when to plant fully planted to plant fully planted (Ha) (Ha) (Ha) (Ha) Kalimantan 800 10,600 300 4,400 Bangka 1,300 6,000 1,900 4,000 Musi Rawas 6,900 7,
Slide 15: Operational overview – Australian beef cattle
Operational overview – Australian beef cattle Preliminary results April 2015
Slide 16: Operational overview – Australian beef cattle: Woodlands
Operational overview – Australian beef cattle 15 Woodlands Negotiations still in progress re sale of property but back to “business as usual” until a sale concluded Dry conditions for much 2014 resulting in lower weight gains but improved cattle prices towards year end more than offset this “Agistme
Slide 17: Operational overview – Australian beef cattle (continued)
Operational overview – Australian beef cattle (continued) 16 NAPCo Another challenging season in 2014 due to dry weather Fewer brandings and lower weight gain due to seasonal conditions more than made up for by improved cattle prices Weakening Australian Dollar boosted export demand and prices Herd
Slide 18: Operational overview – Malaysian property
Operational overview – Malaysian property Preliminary results April 2015
Slide 19: Operational highlights – Malaysian property
Operational highlights – Malaysian property 18 Operational highlights Sales of developed properties completed in 2014 increased but at lower end of the market with smaller profit margin No sales of raw land in 2014 but some in pipeline Preliminary results April 2015
Slide 20: Preliminary results
Preliminary results Preliminary results April 2015
Slide 21: Preliminary results – overall results and financial position
Preliminary results – overall results and financial position 20 Strong increase in profit despite lower CPO price Revenue 11% higher than 2013 though CPO price down 4% to US$821 (but mill gate price down only US$8 to US$687) Profit for the year up 62.2% EPS up 25.1 US cents to 61.0 US cents Results
Slide 22: Preliminary results – profit growth
Preliminary results – profit growth 21 Gross profit of US$ 35.9 million: a 45% increase (49% before IAS 41) Strong increase in plantation gross profit margin to 39% from 33% due to falling unit cost: now at US$ 370 per tonne of palm product Increase of US$2.7 million (23%) in share of associates’ pr
Slide 23: Preliminary results – funding
Preliminary results – funding 22 Ambitious capital programme continues on new projects: could amount to US$65 million over 2015-2016 Continuing planting programme Bangka mill due to be commissioned mid-2016 Permanent housing programme and amenities in Kalimantan Land taxes payable on grant of final
Slide 24: Outlook and investment case
Outlook and investment case Preliminary results April 2015
Slide 25: Outlook for palm oil
Outlook for palm oil 24 World annual vegetable-oil Expected new US$50 CPO levy consumption per capita (Kg / head, 2013) when export tax falls to zero 70.0 60.0 CPO price fell in Q4 2014 and have 50.0 been US$650-700 in Q1 2015 40.0 30.0 20.0 Crop growth expected to continue: 10.0 0.0 Musi Rawas cont
Slide 26: Outlook for beef
Outlook for beef 25 Welcome rain in early 2015 in Queensland and Northern Territory; conditions generally dry since but Woodlands received substantial recent rain Australian beef-cattle prices extremely strong in early 2015 Weakening Australian Dollar is assisting competitiveness of Australian beef
Slide 27: Investment case
Investment case 26 M. P. Evans well positioned to benefit from sharply-increasing f.f.b. crops Young age profile of plantations will generate increasing crop for years to come Good cash flow provides a strong platform for continued expansion Good long-term price prospects for Indonesian palm oil des
Slide 28: Appendices
Appendices Preliminary results April 2015
Slide 29: Appendix: Area of operations
Appendix: Area of operations 28 Preliminary results April 2015
Slide 30: Appendix: Strategic disposal of Malaysian assets
Appendix: Strategic disposal of Malaysian assets 29 2005 strategy envisaged disposing of more than half of the Group’s assets for re-investment in new projects 140.0 120.0 100.0 US$ million 80.0 60.0 40.0 20.0 0.0 Sold to date To be sold Malaysian Estates Thai and other Bertam Properties Bertam Prop
Slide 31: Appendix: Consolidated income statement
Appendix: Consolidated income statement 30 Year ended Year ended 31 December 31 December 2014 2013 US$’000 US$’000 Revenue 90,922 82,186 ———— ———— Gross profit 35,894 24,735 Biological-asset adjustment 8,830 2,794 Exchange differences (2,379) (8,322) Administrative expenses, etc. (5,422) (4,436) ———
Slide 32: Appendix: Consolidated balance sheet
Appendix: Consolidated balance sheet 31 Year ended Year ended 31 December 31 December 2014 2013 US$’000 US$’000 Non-current assets Goodwill 1,157 1,157 Biological assets, property, plant and equipment 275,521 257,713 Investments 120,713 122,958 Deferred-tax asset and non-current debtor 14,137 14,996
Slide 33: Appendix: Consolidated cash flow
Appendix: Consolidated cash flow 32 Year ended Year ended 31 December 31 December 2014 2013 US$’000 US$’000 Net cash generated by operating activities 28,351 19,494 ———— ———— Investing activities Interest received 1,650 972 Sale of shares to minority 926 498 Proceeds on disposal of assets 415 358 Pu
Slide 34: Appendix: CPO price
Appendix: CPO price 33 Crude palm-oil price, c.i.f. Rotterdam (US$) 1,400 1,300 1,200 1,100 1,000 900 800 700 600 500 400 Jul 10 Jul 11 Jul 12 Jul 13 Jul 14 Jan 10 Apr 10 Oct 10 Jan 11 Apr 11 Oct 11 Jan 12 Apr 12 Oct 12 Jan 13 Apr 13 Oct 13 Jan 14 Apr 14 Oct 14 Jan 15 Preliminary results April 2015
Slide 35: Appendix: Cattle prices
Appendix: Cattle prices 34 Eastern Young Cattle Indicator and 100-day short fed cattle prices (A$ / Kg) 5.00 4.50 4.00 3.50 3.00 2.50 EYCI (Woodlands) 100-day short fed (NAPCo) 2.00 Jul 10 Jul 11 Jul 12 Jul 13 Jul 14 Jan 10 Apr 10 Oct 10 Jan 11 Apr 11 Oct 11 Jan 12 Apr 12 Oct 12 Jan 13 Apr 13 Oct 13
Slide 36: Appendix: World vegetable oil consumption
Appendix: World vegetable oil consumption 35 World vegetable-oil consumption 2014: 166 million tonnes 2004: 101 million tonnes 2% 2% 3% 4% 2014 36% 10% 2004 16% 27% Palm oil Soybean oil Rapeseed oil Sunflower oil Palm kernel oil Cotton oil Groundnut oil Coconut oil Source: Oil World Preliminary resu