Th Plantations Bhd. · MYX:THPLANT
Th Plantations Bhd — Shareholder Meeting (August 2020)
25 slides from Th Plantations Bhd's shareholder meeting presentation, Aug 3, 2020
Slide 1: 46th Annual General Meeting
46th ANNUAL GENERAL MEETING 3rd August 2020 Muzmi Mohamed Chief Executive Officer
Slide 2: Table of Contents
TABLE OF CONTENTS 01 THP OVERVIEW 02 FY2019: FINANCIAL & OPERATIONAL REVIEW 03 CHALLENGES & OUTLOOK 04 STRATEGIC RECOVERY PLAN
Slide 3: THP Overview | At a Glance
THP OVERVIEW| AT A GLANCE Lower losses on the back of improved FFB production but lower CPO prices… REVENUE PBT PAT FFB PRODUCTION FFB PROCESSED CPO PRODUCTION RM493.65m -RM245.01m -RM273.13m 917,072mt 937,815mt 188,051mt FY18: RM519.32m FY18 : -RM678.11m FY18 : -RM658.38m FY18 : 910,316mt FY18 : 93
Slide 4: Table of Contents
TABLE OF CONTENTS 01 THP OVERVIEW 02 FY2019: FINANCIAL & OPERATIONAL REVIEW 03 CHALLENGES & OUTLOOK 04 STRATEGIC RECOVERY PLAN
Slide 5: Financial Performance FY2019: Lower revenue amid improved expenditures
FINANCIAL PERFORMANCE FY2019 Lower revenue amid improved expenditures FY2019 FY2018 YoY RM’000 Revenue 493,650 519,324 5% Cost of Sales (414,362) (484,229) 14% Gross profit/(loss) 47,104 (109,061) 143% Results from operating activities (170,361) (612,106) 72% (Loss)/Profit Before Tax (245,009) (678,
Slide 6: Financial Performance FY2019: Main factors affecting financial performance
FINANCIAL PERFORMANCE FY2019 Main factors affecting financial performance 2019 2018 YoY 1. LOWER SELLING PRICES RM/mt RM/mt CPO 1,968.10 2,120.63 7% PK 1,172.18 1,709.44 31% FFB 376.73 408.27 8% 2. LOWER OPERATING COSTS RM/mt RM/mt Estate Production Cost 218.09 272.00 20% 3. LOWER IMPAIRMENT COST RM
Slide 7: Financial Performance FY2019: Liquidity and high debt level
FINANCIAL PERFORMANCE FY2019 Liquidity and high debt level still main issue… FY2019 FY2018 YoY RM’000 Total Assets 2,736,602 2,868,303 5% Total Liabilities 1,918,798 1,773,208 8% Total Equity 817,804 1,095,095 25% Borrowings 1,279,415 1,241,054 3% Trade and Other Payables 219,436 213,089 3% *Current
Slide 8: Operational Snapshot FY2019: Only 60% of land planted and yielding
OPERATIONAL SNAPSHOT FY2019 Only 60% of land area is planted and yielding 2019 (Ha) AREA STATEMENT 50,457 Total Area: 100,976 Ha Mature Oil Palm (50%) 9,054 Immature Oil Palm (9%) 747 In-course of Planting Others (1%) 30,338 Ha 10,380 30% Immature Rubber & Teak Mature Oil Palm (10%) 50,457 Ha 30,338
Slide 9: Operational Snapshot FY2019: 67% of planted area yielding prime income
OPERATIONAL SNAPSHOT FY2019 67% of planted area yielding prime income AREA STATEMENT | AGE PROFILE 2019 (Ha) Very Old Mature Total Planted: 59,511 Ha 9,054 (>25 years) Immature (<4 years) 2,437 Ha (15%) 4% 8,206 Young Mature (4-7 years) Old Mature (17- Immature (<4 years) (14%) 25 years) 9,054 Ha 32
Slide 10: Operational Snapshot FY2019: Marginal operation improvements
OPERATIONAL SNAPSHOT FY2019 Marginal operation improvements FY2019 FY2018 YoY RM’000 Mature Area (Ha) 50,457 48,955 3.1% FFB Production (Mt) 917,072 910,316 0.7% FFB Processed (Mt) 937,815 930,871 0.8% Yield (Mt/Ha) 18.18 18.59 2.2% CPO Production (Mt) 188,051 185,623 1.3% PK Production (Mt) 42,209
Slide 11: Table of Contents
TABLE OF CONTENTS 01 THP OVERVIEW 02 FY2019: FINANCIAL & OPERATIONAL REVIEW 03 CHALLENGES & OUTLOOK 04 STRATEGIC RECOVERY PLAN
Slide 12: Challenges & Outlook: Prices remained low throughout 2019
CHALLENGES & OUTLOOK Prices remained low throughout 2019, but improving towards year end… Challenging Environment – Volatility of Prices in FY2019 3,100.00 CPO Selling Price – MPOB Peninsular Malaysia 2,825.50 CPO Prices 2,700.00 2,500.00 (RM/MT) 2,300.00 2,038.50 2,101.50 2,020.00 1,947.50 1,969.00
Slide 13: Challenges & Outlook: Operations
CHALLENGES & OUTLOOK: Operations 1 LABOUR SHORTAGE AND INCREASING COST i) Shortage of labour is main issue to industry ~ Recent Covid-19 pandemic - country’s border closed to foreign workers ii) Cost to recruit labour is increasing ~ Other compliance costs are also increasing - environmental control
Slide 14: Challenges & Outlook: Economy & The Industry
CHALLENGES & OUTLOOK: Economy & The Industry Trade war International campaign Demand could be impacted by against palm oil The prevailing uncertainties the spread of Covid-19 coronavirus globally, which Forecast CPO prices to surrounding global trade and affected worldwide trade at RM2,200 – US-Chin
Slide 15: Long Term Industry Outlook: Demand > Supply
CHALLENGES & OUTLOOK: Economy & The Industry Long Term Industry Outlook: Demand > Supply Global Human Population OVER 9 BILLION BY 2050 ‘World will have to produce about 60% to 70% more food in the next 35 years’ Source : Oil World/MPOC - Techno Economic Marketing For Palm Oil (TEMPO), 18 July 2019,
Slide 16: Long Term Overview: Most Productive & Competitive Oils
CHALLENGES & OUTLOOK: Economy & The Industry 3.6 Long Term Overview: Most Productive & Competitive Oils Global Oilseeds: Harvested Area (Mn Ha) Oil Yield (MT/Ha) 22.25 20.24 Others 22.25 0.8 26.45 Palm Oil 3.6 Oil Palm 20.24 ∑ Harvested Area: 27.29 288.06 Ha 0.7 Groundnut 26.45 Rapeseed Oil 0.8 33.3
Slide 17: Factors Supporting Oil Palm Industry
CHALLENGES & OUTLOOK: Economy & The Industry Mainly domestic driven… FACTORS SUPPORTING OIL PALM INDUSTRY Restocking from key palm oil destination would potentially take place once Covid-19 lockdowns are lifted. Weak Ringgit Malaysia Vs US Dollar. 100% exemption on export duties for CPO, crude
Slide 18: Challenging Factors: International and domestic issues
CHALLENGES & OUTLOOK: Economy & The Industry International and domestic issues CHALLENGING FACTORS Palm oil production seen increasing from June-July as crops enter high production season. Covid-19 affect palm oil demand from food sector. Weak global economic and high unemployment rate will cu
Slide 19: Table of Contents
TABLE OF CONTENTS 01 THP OVERVIEW 02 FY2019: FINANCIAL & OPERATIONAL REVIEW 03 CHALLENGES & OUTLOOK 04 STRATEGIC RECOVERY PLAN
Slide 20: Strategic Recovery Plan: Towards a strengthened and sustainable THP
STRATEGIC RECOVERY PLAN Towards a strengthen and sustainable THP In 2018, the Company embarked on a Strategic Recovery Plan (SRP) to stabilise and strengthen our operations and finances and return us to a stronger path of growth. Deterioration of Financial Position RM’000 1,400,000 1,200,000 1,000,0
Slide 21: Strategic Recovery Plan: The Plan
STRATEGIC RECOVERY PLAN The Plan… The Plan consists of Rationalisation of Assets and Transformation of Operations STRATEGIC OBJECTIVES STRATEGIES Rationalisation Divestment To consolidate & manage balance sheet Proposed divestment of 14 non-performing companies Capital Structure To pare down debt, d
Slide 22: Strategic Recovery Plan: The progress so far
STRATEGIC RECOVERY PLAN The progress so far… 1 RATIONALISATION OF ASSETS Details Expected Completion* Proposed disposal of 100% equity interests in BSV and MWM by THP to Tamaco for a total cash consideration of RM170 million. The SPA was signed on 5 December 2019. 3Q2020 Proposed disposal of 70% equ
Slide 23: Strategic Recovery Plan: A better THP for the future
STRATEGIC RECOVERY PLAN A better THP for the future THE TRAJECTORY 2019 SRP (2019-2021) OUR TARGET Gearing Gearing To reduce 1.48x gearing Yield (MT/Ha) Yield (MT/Ha) To improve 18.18 De-gear and improve liquidity yield OER (%) OER (%) Enhance Performance Improvement Increase in 20.05 Program (empha
Slide 24: The return of a stronger and sustainable THP
STRATEGIC RECOVERY PLAN The return of a stronger and sustainable THP in meeting stakeholders expectation MOVING FORWARD: OUR FUTURE We aim to reposition Building better Endeavouring into THP as a strong & prospects for future new business robust pure upstream growth organically ventures palm oil pla
Slide 25: Thank you
TH PLANTATIONS BERHAD (12696-M) Thank you
TH Plantations Berhad — Shareholder Meeting (August 2020) on 6ix