Olam Group Limited · SGX:VC2
Olam — NZ Farming Systems Uruguay — FY2011 Earnings Presentation
16 slides from Olam's earnings presentation, Sep 5, 2011
Slide 1: Annual results announcement
NZ Farming Systems Uruguay Limited Annual results announcement Year to 30 June 2011 www.nzfsu.co.nz 5 September 2011 1 1
Slide 2: Briefing Outline
Briefing Outline NZFSU Annual Results Overview Key financials Funding Market conditions Operating conditions Milk production Management internalisation Outlook Summary Investor tour NZFSU Annual Results Announcement 5 Sep 2011 2 2
Slide 3: Overview
Overview Milk revenue 113% higher than in FY10 due to 58% increase in milk prices and 55% increase in milk production Operating loss of $4.3m; increased by $1.5m on $2.8m loss in FY10 Difficult climatic conditions with wet winter then dry spring and drought conditions throughout summer in the Centre
Slide 4: Key Financials – P&L
Key Financials – P&L Year ended Year ended 30-Jun-11 30-Jun-10 US$m US$m Revenue (1) 64.0 30.7 Livestock and cropping cost of sales 2.5 3.7 Employee benefits expense 7.5 4.2 Farm operating expenses 47.0 20.9 Mgmt fee / depreciation / other expenses 10.3 6.1 Land fair value adj/gain(loss) on property
Slide 5: Key Financials – Farm Operating Expenses
Key Financials – Farm Operating Expenses Year ended Year ended 30-Jun-11 30-Jun-10 US$m US$m Pasture 8.3 5.4 Farm repairs and maintenance 3.3 1.7 Farm management 0.5 0.9 Animal health, breeding, calf rearing 4.2 2.9 Cropping and feed 21.2 6.1 Other farm expenses 9.4 3.9 TOTAL 47.0 20.9 • Expenses up
Slide 6: Key Financials – Balance Sheet
Key Financials – Balance Sheet As at As at 30-Jun-11 30-Jun-10 US$m US$m Property, Plant & Equipment 173.9 161.7 Livestock 57.6 34.8 Cash and other assets 58.6 32.6 Liabilities 134.2 71.7 Equity 155.9 157.5 Net Tangible Assets (US cps) 64c 65c Net Tangible Assets (NZ cps) 77c 92c • Increase in farm
Slide 7: Funding
Funding Management agreement internalised; PGG Wrightson short term loan due to performance fee was repaid in December 2010 with Olam loan Strong support from Olam via shareholder loan facility of up to $85m to fund outstanding balance owed to PGW, immediate capex requirements, long term loan partia
Slide 8: Market conditions
Market conditions International dairy prices have continued to lift strongly, as did all commodities Price trend up from 31.3 c/litre in July 10 to 46.8 c/litre in June 11 Average price of 38.1c/litre in FY11 compared with 28.7 c/litre in FY10 Present milk prices at risk due to decrease in internati
Slide 9: Operating Conditions
Operating Conditions Increased level of concentrates fed to cows post peak in spring resulted in annual milk production over budget New feeding regime also improved pregnancy rates, young stock weight gain and overall livestock body condition Feed costs per ton very high due to peaks in prices of al
Slide 10: Milk production (1)
Milk production (1) Production lifted from 68m litres in FY10 to 105m litres in FY11 – 5m litres above budget. Much slower decline in milk production per cow from November despite drought conditions, due to new concentrate/management regime Spring milk peak of 11.1m litres in October, and 24,000 pea
Slide 11: Milk Production (2)
Milk Production (2) Costs per litre increased in FY 11 with re-structuring costs plus new concentrate feeding policy, high feed costs per ton and drought FY11 cost of production 47 c/litre, with this expected to drop to 29-31 c/litre in FY12 and then further to 23-24 c/litre at maturity in FY14/15 N
Slide 12: Management Internalisation
Management Internalisation Terms for ending the Management Agreement with PGW agreed and effective after 17 August 2010 Incorporation of PGW Uruguay management staff into NZFSU New CEO David Beca based in Uruguay from 01 February 2011, with significant experience in dairy farming in Australia, New Z
Slide 13: Outlook
Outlook Forecast production of 197m litres for FY12 Milk prices forecast on average at 37 c/litre in FY12 Projected EBIT and PAT profits Upside opportunities: Higher milk prices Higher milk production Lower feed costs Downside risks: Lower milk prices Lower milk production Dry/drought conditions Hig
Slide 14: Summary
Summary Year of increasing production, both milk and pasture, and developing the basis for future growth Production profile improving with farm development, irrigation and focus on feed and management Dairy price outlook remains cautiously favourable though with significant downside risk Development
Slide 15: Investor Tour
Investor Tour Upcoming tour on 8-10 November Program to visit NZS farms in Centre, East and West of Uruguay Register interest on website www.nzfsu.co.nz 15 15
Slide 16: Briefing on Annual Results THANK YOU
NZ Farming Systems Uruguay Limited Briefing on Annual Results Year ended 30 June 2011 THANK YOU www.nzfsu.co.nz 5 September 2011 16 16
NZ Farming Systems Uruguay — FY2011 Earnings Presentation on 6ix