Mega First Corp. Bhd. · MYX:MFCB
Mega First Corp. Bhd — Q3 2023 Earnings Presentation
84 slides from Mega First Corp. Bhd's earnings presentation, Dec 1, 2023
Slide 1: 3Q2023 Results Briefing
3Q2023 RESULTS BRIEFING 1 December 2023
Slide 2: Agenda
AGENDA 1. 3Q2023 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: Earnings Review
2Q2023 EARNINGS REVIEW § Exclude SPSB (disposed in May 2023), revenue - 3.3% to RM320.4 mil. § RE’s 3.7% revenue growth more than offset by lower contribution from Resources and Packaging. § PBT before JV/associates +1.0% to RM135.5 mil. All core divisions posted healthy PBT growth. § Excluding RM16
Slide 4: Renewable Energy Division
RENEWABLE ENERGY DIVISION
Slide 5: Earnings Review - Renewable Energy Division
EARNINGS REVIEW - RENEWABLE ENERGY DIVISION 3Q2023 vs 3Q2022 • Revenue +3.7% to RM164.3 mil: 3.9% USD/MYR appreciation, 1% hydro tariff adjustment and higher solar energy sales (+16.5%), partly offset by lower hydro energy sales volume (-0.6%). • EAF -0.6%-point to 97.6%. • Solar revenue +16.5% to R
Slide 6: Renewable Energy Division - Don Sahong
RENEWABLE ENERGY DIVISION - DON SAHONG Don Sahong : January - September Pakse Water Level and Capacity Factor/EAF
Slide 7: Resources Division
RESOURCES DIVISION
Slide 8: Earnings Review - Resources Division
EARNINGS REVIEW - RESOURCES DIVISION 3Q2023 vs 3Q2022 • Sales -20.8% to RM48.3 mil: sales of lime products -22.2% mainly due to lower exports (slower mining activities, high inventory level and maintenance shut down in one of key customers), partly offset by slight increase in sales of non-lime prod
Slide 9: Packaging Division
ne | \\ PACKAGING DIVISION
Slide 10: Earnings Review - Packaging Division
EARNINGS REVIEW - PACKAGING DIVISION 3Q2023 vs 3Q2022 • Revenue -6.2% to RM98.1 mil: slower sales demand for both paper bags and flexible plastic packaging films, in line with slower consumer demand. • PBT +14.8% to RM10.1 mil on production efficiency improvements and a favourable change in the sale
Slide 11: Balance Sheet Review
BALANCE SHEET REVIEW At 30.9.2023 At 31.12.; Changes (RM million) (RM million) (RM million) EpOnnesa Service concession asset 2,006.0 1,940.8 65.2 |RM130.9 million translation gain, partially offset by RM65.8 million amortisation charge. PPE 527.7 481.7 46.0 |RM67.5 million CAPEX (see below) and RM5
Slide 12: Cash Flow Review
CASH FLOW REVIEW Operating profit before working capital changes posted marginal 0.8% increase from RM456 mil to RM460.1 mil.
Slide 13: Expansionary Investment Capital Deployed
EXPANSIONARY INVESTMENT CAPITAL DEPLOYED 9M2023: RM154.8 mil 9M2022: RM150.8 mil
Slide 14: Gearing Position
700.0 600.0 500.0 400.0 300.0 200.0 100.0 rr) GEARING POSITION 31.12.2019 31.12.2020 31.12.2021 31.12.2022 309.2003 mmm Net Debt (RM mil) ~—=Net Debt/Equity 66) At 31.12.2019 | At 31.12.2020 | At 31.12.2021 | At 31.12.2022 | At 30.9.2023 (RM mil) (RM mil) (RM mil) (RM mil) (RM mil) Total Cash 91.0 9
Slide 15: JV Edenor Technology
JV EDENOR TECHNOLOGY EBITDA remains positive High depreciation due to bargain gain Cost of investment RM40 mil recognised at time of investment
Slide 16: Other Updates
OTHER UPDATES Ø Acquisition of remaining 20% in DSPC via 56.25%-owned subsidiary from EDL-Gen - Total consideration: USD85.0 million. - Effective interest: 80.0% 91.25% - Expected completion: by 31 December 2023 - Bank borrowing: US$55 million. - Proforma profit impact: +RM27 mil (after funding cost
Slide 17: Prospects for Remaining Quarter of 2023
PROSPECTS FOR REMAINING QUARTER OF 2023 Ø Economic and business environments generally expected to continue to be challenging. Ø Prospects of a recovery in global consumption remain elusive: • US Fed’s interest rate policy; • Developments in the current geopolitical hotspots; and • China’ success in
Slide 18: Capital Commitment as at 30 September 2023
PROSPECTS FOR REMAINING QUARTER OF 2023 CAPITAL COMMITMENT AS AT 30 SEPTEMBER 2023 Include RM71 mil land acquisition Hydro: RM198.5 mil Solar: RM178.1 mil Factory construction: RM61.1 mil Production machinery: RM95.8 mil
Slide 19: Prospects: Renewable Energy Division
PROSPECTS FOR REMAINING QUARTER OF 2023 Renewable Energy Division Ø 2023 Average EAF: about 91% (unchanged from earlier guidance)(2022: 94.6%) – higher than estimated long-term simulation average of 89%. Ø Higher EAF in 2022 due to: 1) near historical-high water level during last year’s dry season;
Slide 20: Portfolio Summary as at 30 September 2023
PROSPECTS FOR REMAINING QUARTER OF 2023 PORTFOLIO SUMMARY AS AT 30 SEPTEMBER 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 - Construction Area
RENEWABLE ENERGY DIVISION 5th TURBINE CONSTRUCTION PROGRESS - CONSTRUCTION AREA
Slide 24: 5th Turbine Construction - Main Shaft Seal Assembly & Transformer
RENEWABLE ENERGY DIVISION 5th TURBINE CONSTRUCTION PROGRESS - MAIN SHAFT SEAL ASSEMBLY & TRANSFORMER
Slide 25: 5th Turbine Construction Progress - Turbine Runner
RENEWABLE ENERGY DIVISION 5th TURBINE CONSTRUCTION PROGRESS - TURBINE RUNNER
Slide 26: Prospects: Resources Division
PROSPECTS FOR REMAINING QUARTERS OF 2023 Resources Division Ø Demand for lime products is expected to remain soft on slow mining activities in the region. Ø Nonetheless, sales volume expected to recover sequentially following completion of plant maintenance by key export customer in 3Q2023. Ø Manage
Slide 27: Prospects: Packaging Division
PROSPECTS FOR REMAINING QUARTERS OF 2023 Packaging Division Ø Consumer demand is expected to remain generally subdued in 4Q2023. Ø A fire recently broke out in one of flexible plastic packaging factories. Ø Damaged assets are fully insured. Insurance claim underway and will be recognised as income u
Slide 28: Packaging Division - Bangi (Stenta)
PACKAGING DIVISION BANGI (STENTA)
Slide 29: Packaging Division - Melaka (Hexachase)
PACKAGING DIVISION MELAKA (HEXACHASE)
Slide 30: Packaging Division - Melaka (Hexachase)
PACKAGING DIVISION MELAKA (HEXACHASE)
Slide 31: Prospects: Edenor Technology
PROSPECTS FOR REMAINING QUARTERS OF 2023 Edenor Technology Ø Overall oleochemical industry is expected to continue to face tremendous challenges: v Excess global industry capacity due to weak consumer demand, v Intense price competition. Ø Barring unforeseen production hiccups, we expect plant opera
Slide 32: Key Sustainability Updates
KEY SUSTAINABILITY UPDATES ron @ Wepp > 3 FTSE4Good Board ESG Q1 Officiation of MFCB's Developed MFCB’s Submitted MFCB's first Collected Tier 1 Employees Sustainability Submitted Course on update meeting | Sustainability vision and Sustainability Carbon Disclosure Project suppliers details Training
Slide 33: Key Sustainability Updates
KEY SUSTAINABILITY UPDATES KWSP EPF ISS ESG> Amundi ASSET MANAGEMENT Asset HH OB Siem Key topics discussed: MFCB's ESG goals and strategy, Management of ESG risks, Sustainable investments (involvement in any coal-related power industry), Environment and Human Rights issues. Investor Engagement © o R
Slide 34: Our Sustainability Strategy
OUR SUSTAINABILITY STRATEGY
Slide 35: Our Sustainability Plan for 2023
OUR SUSTAINABILITY PLAN FOR 2023
Slide 36: Environment Dashboard - Jan-Sep 2023
ENVIRONMENT DASHBOARD - JAN-SEP 2023
Slide 37: Social Dashboard - Jan-Sep 2023
SOCIAL DASHBOARD - JAN-SEP 2023
Slide 38: Safety Dashboard - Jan-Sep 2023
SAFETY DASHBOARD - JAN-SEP 2023
Slide 39: Governance Dashboard - Jan-Sep 2023
GOVERNANCE DASHBOARD - JAN-SEP 2023
Slide 40: Remaining Slides for Reference (Updated)
Remaining Slides for Reference (Updated)
Slide 41: Renewable Energy: Don Sahong
RENEWABLE ENERGY DON SAHONG
Slide 42: Renewable Energy Division - Don Sahong
RENEWABLE ENERGY DIVISION DON SAHONG
Slide 43: 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 44: Renewable Energy Division - Don Sahong
RENEWABLE ENERGY DIVISION DON SAHONG
Slide 45: Renewable Energy Division - Don Sahong
RENEWABLE ENERGY DIVISION DON SAHONG
Slide 46: 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 47: Renewable Energy: C&I Solar
RENEWABLE ENERGY C&I SOLAR
Slide 48: Renewable Energy Division - C&I Solar
RENEWABLE ENERGY DIVISION C&I SOLAR
Slide 49: Renewable Energy Division Financial Highlights
RENEWABLE ENERGY DIVISION FINANCIAL HIGHLIGHTS
Slide 50: 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 51: 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 52: Packaging
PACKAGING
Slide 53: 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 54: 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 55: Packaging Division State-of-Art Machinery
PACKAGING DIVISION STATE-OF-ART MACHINERY Fuji Kikai Printing Machine Fuji Kikai 14 colours Rotogravure Printing Machine
Slide 56: Packaging Division State-of-Art Machinery
PACKAGING DIVISION STATE-OF-ART MACHINERY Super Combi 5000 Super Combi 5000 Lamination Machine
Slide 57: Packaging Division State-of-Art Machinery
PACKAGING DIVISION STATE-OF-ART MACHINERY Flat Handle Paper Bag Machine Twisted Handle Paper Bag Machine
Slide 58: Packaging Division State-of-Art Machinery
PACKAGING DIVISION STATE-OF-ART MACHINERY SOS Machine Flat & Satchel Bag Machine
Slide 59: Packaging Division State-of-Art Machinery
PACKAGING DIVISION STATE-OF-ART MACHINERY Reifenhauser LLDPE Line Vacuum Metallizer Slitter for Metallized Film
Slide 60: Packaging Division State-of-Art Machinery
PACKAGING DIVISION STATE-OF-ART MACHINERY Reifenhauser LLDPE Line Vacuum Metallizer
Slide 61: Packaging Division State-of-Art Machinery
PACKAGING DIVISION STATE-OF-ART MACHINERY Bruckner OPP Line High Capacity Roll Slitting and Winding Machine
Slide 62: Packaging Division Product Range
PACKAGING DIVISION PRODUCT RANGE
Slide 63: Packaging Division Product Range
PACKAGING DIVISION PRODUCT RANGE
Slide 64: Packaging Division Product Range
PACKAGING DIVISION PRODUCT RANGE
Slide 65: Packaging Division Financial Highlights
PACKAGING DIVISION FINANCIAL HIGHLIGHTS
Slide 66: Resources
RESOURCES
Slide 67: 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 68: 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 69: 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 70: Investment in Joint Venture: Edenor Technology
INVESTMENT IN JOINT VENTURE EDENOR TECHNOLOGY
Slide 71: 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 72: 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 73: Edenor Technology Plant Site
EDENOR TECHNOLOGY PLANT SITE
Slide 74: Edenor Technology Plant Layout
EDENOR TECHNOLOGY PLANT LAYOUT
Slide 75: Edenor Technology TPG Plant
EDENOR TECHNOLOGY TPG PLANT
Slide 76: 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 77: Food Security
FOOD SECURITY
Slide 78: 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 79: 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 80: Food Security Update
FOOD SECURITY 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 September 2023: RM133 4,000 - 4
Slide 81: Food Security Update
FOOD SECURITY UPDATE
Slide 82: Food Security Update
FOOD SECURITY UPDATE
Slide 83: Food Security Update
FOOD SECURITY UPDATE
Slide 84: Thank You!
THANK YOU!
Mega First Corporation Berhad — Q3 2023 Earnings Presentation on 6ix