31 slides from M.p. Evans's earnings presentation, Apr 6, 2017
Slide 1: 2016 preliminary results
2016 preliminary results 6 April 2017
Slide 2: Agenda
Agenda 1 1. Overview 2. Corporate overview and financial highlights 3. Strategy 4. Preliminary results 5. Operational overview Indonesian palm oil Malaysian property 6. Outlook and investment case 7. Appendices Preliminary results 2016
Slide 3: Corporate overview & financial highlights
2 Corporate overview & financial highlights Preliminary results 2016
Slide 4: Corporate overview
Corporate overview 3 A UK, AIM-listed agri-business group One principal commodity produced in one country: Indonesian palm oil Residual Malaysian property assets gaining in value but for eventual sale Track record of operational excellence and strong crop growth Proceeds from sale of Austr
Slide 5: Financial highlights
Financial highlights 4 Total profit for the year US$35.3 million (2015 US$25.4 million) - Indonesia – significant profit increase on higher palm-oil prices - Malaysia – higher profit as more property sold in the year - Australia – operations sold resulting in US$11.7 million profit from NAPCo Gr
Slide 6: Strategy
5 Strategy Preliminary results 2016
Slide 7: Strategy – Indonesian palm oil
Strategy – Indonesian palm oil 6 To expand the Group’s oil-palm areas in Indonesia in an environmentally- sustainable manner World vegetable oil consumption and composition (Million tonnes) Continue to maintain and, where 200.0 Other vegetable oils 180.0 Palm oil possible, improve agronomic 160.
Slide 8: Strategy – Malaysian property
Strategy – Malaysian property 7 To benefit from property-development and raw-land-sale profits at Bertam Properties Bertam Properties to develop land successfully released from the existing 36-hole golf course To dispose of the small Bertam Estate and the 40% interest in Bertam Properties at a
Slide 9: Preliminary results
8 Preliminary results Preliminary results 2016
Slide 10: Preliminary results – overall results
Preliminary results – overall results 9 Revenue up 16% to US$83.9 million (2015 US$72.5 million) - Increase in average CPO prices to US$700 per tonne (2015 US$622) - Small decrease in crop in the year due to El Niño Gross profit up 62% to US$24.4 million (2015 US$15.1 million) - Margin gain (21%
Slide 11: Preliminary results – strategic development
Preliminary results – strategic development 10 Disposal of NAPCo completed in mid 2016 - Sold for A$18.50 per share (average purchase price A$8.44) - Cash proceeds received of US$79.7 million - Treated as ‘discontinued operation’, contributing US$11.7 million to profit Agreement to sell Agro Muk
Slide 12: Preliminary results - financing
Preliminary results - financing 11 Group continues to be cash generative - Operating cash inflow of US$22.9 million (2015 US$20.2 million) - Significant inflow from disposal of non-core asset - Cash and other liquid resources at year end of US$105.7 million (2015 US$44.2 million) Well positioned
Slide 13: Operational overview – Indonesian palm oil
12 Operational overview – Indonesian palm oil Preliminary results 2016
Slide 14: Operations – palm oil market and production
Operations – palm oil market and production 13 Palm-oil prices 13% higher than 2015 at US$700 per tonne: stock levels fell and dry El Nino weather reduced crops in South East Asia, notably Kalimantan and Bangka Overall Group f.f.b. crop 399,300 tonnes, 6% lower than 2015 Associates’ f.f.b. cro
Slide 15: Operations – plantation development
Operations – plantation development 14 Upward crop trend expected to continue 3,600 hectares planted in 2016 (2,100 for the Group and 1,500 for smallholder co-operatives) Strong planting momentum on new Musi Rawas project: 1,900 Ha planted and compensation agreed on another 2,500 Ha 900 Ha p
Slide 16: Operations – projected crop growth
Operations – projected crop growth 15 Planting programme on new projects started in 2005 – Group f.f.b. crops increasing significantly Acquisitions would further increase projected crop Actual and projected f.f.b. crop (Tonnes) 1,200,000 Co-operatives 1,000,000 Group 800,000 600,000 400,000 200,
Slide 17: Operations - continuing development and growth
Operations - continuing development and growth 16 Remaining 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 150 10,600 - 4,500 Bangka 250 6,000 400 4,000 Musi Rawas 5,200 7
Slide 18: Operations - oil-palm plantings
Operations - oil-palm plantings 17 2016 2015 Ha Ha New projects Kalimantan 10,450 9,800 Bangka 5,750 5,400 Musi Rawas 1,850 800 18,050 16,000 Established North Sumatran estates 9,350 9,400 Total majority owned areas 27,400 25,400 Effective share of established associates' planted areas 7,900 8,100 T
Slide 19: Operational overview – Malaysian property
18 Operational overview – Malaysian property Preliminary results 2016
Slide 20: Operational highlights – Malaysian property
Operational highlights – Malaysian property 19 Significant increase in sales of developed properties completed at similar profit margin to previous years Less development started in 2016 due to tighter bank lending conditions Two sales of raw land, including one for a Tesco supermarket Land
Slide 21: Outlook and investment case
20 Outlook and investment case Preliminary results 2016
Slide 22: Outlook for palm oil
Outlook for palm oil 21 Strong CPO price in Q1 2017, averaging US$772 per tonne World annual vegetable-oil consumption per head Crop growth expected to continue: (Kg per head, 2015) first harvesting in Musi Rawas end- 2017 70.0 60.0 Young average planting age – 7 ½ 50.0 40.0 years – approachin
Slide 23: Investment case
Investment case 22 M.P.Evanspositioned to benefit from sharply-increasing f.f.b. crops Young age profile of plantations will generate crop growth for more than a decade Experienced management team able to exploit existing assets and expand hectarage for continuing future growth M.P.Evansnow
Slide 24: Appendices
23 Appendices Preliminary results 2016
Slide 25: Appendix: Area of operations
Appendix: Area of operations 24 Preliminary results 2016
Slide 26: Appendix: Consolidated income statement
Appendix: Consolidated income statement 25 2016 2015 US#039;000 US#039;000 Continuing operations Revenue 83,864 72,528 Gross profit 24,384 15,059 Foreign-exchange loss (658) (5,320) Administrative expenses, etc. (3,990) (2,620) Operating profit 19,736 7,119 Net interest (521) (350) Group-controlled profit
Slide 27: Appendix: Consolidated balance sheet
Appendix: Consolidated balance sheet 26 2016 2015 US#039;000 US#039;000 Non-current assets Property, plant and equipment 201,789 185,902 Investment in associates 18,392 97,586 Other 19,498 18,311 239,679 301,799 Current assets Cash and liquid resources 105,667 44,214 Assets held for sale 31,751 - Other 37
Slide 28: Appendix: Consolidated cash flow
Appendix: Consolidated cash flow 27 2016 2015 US#039;000 US#039;000 Net cash generated by operating activities 22,888 20,231 Investing activities Interest received 868 894 Proceeds on disposal of assets 155 21,127 Purchase of property, plant and equipment (26,847) (28,419) Disposal of associated undertaki
Slide 29: Appendix: CPO price
Appendix: CPO price 28 Crude palm-oil price, c.i.f. Rotterdam (US$) 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 Jul 15 Jul 16 Jan 10 Jan 11 Jan 12 Jan 13 Jan 14 Jan 15 Jan 16 Jan 17 Preliminary results 2016
Slide 30: Appendix: World vegetable oil consumption
Appendix: World vegetable oil consumption 29 World vegetable-oil consumption 2016: 174 million tonnes 2006: 116 million tonnes 2016 2006 Preliminary results 2016
Slide 31: Appendix: Group equity value
Appendix: Group equity value 30 2016 US#039;000 Indonesian plantations Majority-owned 479,453 Associates 112,765 592,218 Malaysian property 77,947 Net cash (including bank deposits) 75,338 Other assets and liabilities 14,639 Total equity value 760,142 Equity value per share £11.00 Preliminary results 2