Mega First Corp. Bhd. · MYX:MFCB
Mega First Corp. Bhd — Q2 2024 Earnings Presentation
96 slides from Mega First Corp. Bhd's earnings presentation, Aug 28, 2024
Slide 1: 2Q2024 Results Briefing
2Q2024 RESULTS BRIEFING 28 August 2024
Slide 2: Agenda
AGENDA 1. Financial Review For reference (updated) - 2Q2024 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: 2Q2024 Earnings Review
2Q2024 EARNINGS REVIEW § All core divisions posted positive growth rates. § Revenue (excluding Tawau plant) +8.8% to RM331.9 mil, driven by improvements across all core divisions and maiden sales from CSC. § PBT +3.3% to RM118.3 mil with core division improvements, partly offset by greater losses in
Slide 4: Normalised Profit Before Tax
NORMALISED PROFIT BEFORE TAX • Despite strong improvements in core earnings, normalised PBT recorded only marginal 0.9% increase YoY from RM125.1 mil to RM126.2 mil due mainly to lower forex gain (down RM6.6 mil) and high interest expense from additional USD borrowings to fund acquisition of 20% sta
Slide 5: Normalised Profit After Tax and Non-Controlling Interest (PATNCI)
NORMALISED PROFIT AFTER TAX AND NON-CONTROLLING INTEREST (PATNCI) • Normalised PATNCI +15.4% YoY from RM99.2 mil to RM114.5 mil, reflecting the strength of Group’s core businesses and positive impact of increased effective interest in DSPC. • A 16.5% sequential increase in normalised PBT, rising fro
Slide 6: Renewable Energy Division
RENEWABLE ENEGY DIVISION
Slide 7: Earnings Review - Renewable Energy Division
EARNINGS REVIEW - RENEWABLE ENERGY DIVISION 2Q2024 vs 2Q2023 • Revenue +7.9% to RM156.2 mil: higher hydro energy sales (+7.5%), higher solar energy sales (+31.6%) and test energy income from the new 5th turbine (RM0.7 mil). • Higher hydro energy sales: 4.5% currency gain, 1.1% increase in sales volu
Slide 8: Renewable Energy Division - Don Sahong
RENEWABLE ENERGY DIVISION - DON SAHONG Don Sahong : January - June Pakse Water Level and Capacity Factor/EAF
Slide 9: Resources Division
RESOURCES DIVISION
Slide 10: Earnings Review - Resources Division
EARNINGS REVIEW - RESOURCES DIVISION 2Q2024 vs 2Q2023 • Revenue +8.0% to RM56.6 mil: higher sales volume of lime products (+5.5%) and currency gain in export sales (+4.5%), partly offset by lower sales of non-lime products (-7.7%) due to business cessation of the brick products. • PBT +119.0% to RM1
Slide 11: Packaging Division
ne | \\ PACKAGING DIVISION
Slide 12: Earnings Review - Packaging Division
EARNINGS REVIEW - PACKAGING DIVISION 2Q2024 vs 2Q2023 • Revenue +3.8% to RM104.2 mil despite a challenging operating environment characterised by weak consumer demand and excess industry capacities. • PBT (excluding insurance income) +12.3% to RM9.1 mil.
Slide 13: Balance Sheet Review
BALANCE SHEET REVIEW At 30.6.2024 At 31.12.2023 Changes (RM million) (RM million) (RM million) Service concession asset 1,948.9 1,940.0 8.9 |RM54.8 mil translation gain, largely offset by RM45.9 mil amortisation charge. PPE 1,023.5 531.9 491.6 |RM354.8 mil transfer from development expenditures (5th
Slide 14: Cash Flow Review
CASH FLOW REVIEW 6-Month Period Ended 2024 2023 (RM mil) (RM mil) After tax cash from operating activities 299.4 293.4 Net cash inflow from non-operating investment activities 12.1 11.1 New capital from minority of subsidiary - - Total Cash Made Available to the Group 311.5 304.5 Investing Activitie
Slide 15: Expansionary Investment Capital Deployed
EXPANSIONARY INVESTMENT CAPITAL DEPLOYED 1H2024: RM189.5 mil 1H2023: RM105.2 mil
Slide 16: Gearing Position
600.0 500.0 400.0 300.0 200.0 100.0 00 31.12.2020 GEARING POSITION 31.12.2021 MEE Net Debt (RM mil) 31.12.2022 31.12.2023, Net Debt/Equity () 306.2024 30.0% 25.0% 20.0% 15.0% 10.0% 5.0% 0.0% At 31.12.2020 | at 31.12.2021 | At 31.12.2022 | At 31.12.2023] At 30.6.2024 (RM mil) (RM mil) (RM mil) (RM mi
Slide 17: JV Edenor Technology
JV EDENOR TECHNOLOGY 2023 2024 1Q 2Q 3Q 4Q Total 1Q 2Q Total (RM mil) (RM mil) (RM mil) (RM mil) (RM mil) (RM mil) (RM mil) (RM mil) Revenue 265.0 220.7 207.8 198.3 891.8 197.9 176.2 374.1 EBITDA 4.3 (1.5) 3.1 3.2 9.1 (10.3) (7.5) (17.8) Depreciation 9.2 9.1 9.1 9.4 36.8 9.5 9.3 18.8 and amortisatio
Slide 18: Other Updates
OTHER UPDATES Ø Concession Agreement (“CA”) and Power Purchase Agreement (“PPA”) for DSPC 5th turbine expansion • Terms finalised awaiting formal approval from Lao government. • New CA and PPA will encompass all 5 turbines. • Expected completion by 31 December 2024. Ø Dividends - Interim single-tier
Slide 19: Prospects for Remaining Quarters of 2024
PROSPECTS FOR REMAINING QUARTERS OF 2024 Ø Normalised PATNCI (excluding share of JVs and associates’ earnings and one-off non-operational items) increased by 18.4% YoY to RM212.7 million in the first half of 2024 (1H2023: RM179.7 million). • Underlying strength of the Group’s core businesses. • Impa
Slide 20: Capital Commitment as at 30 June 2024
PROSPECTS FOR REMAINING QUARTERS OF 2024 CAPITAL COMMITMENT AS AT 30 JUNE2024 Solar: RM170.3 mil Factory construction: RM33.7 mil Production machinery: RM66.4 mil
Slide 21: Prospects - Renewable Energy Division (Hydro)
PROSPECTS FOR REMAINING QUARTERS OF 2024 Renewable Energy Division (Hydro) Ø The 5th turbine was successfully tested, commissioned, and put into operation on 4 July 2024. The total generation capacity increases from 260 MW to 325 MW. At present, Don Sahong is operating at 315 MW, achieving an impres
Slide 22: Prospects - Renewable Energy Division (Solar)
PROSPECTS FOR REMAINING QUARTERS OF 2024 Renewable Energy Division (Solar) Ø We expect solar energy earnings to continue to grow in 2024 on progressive installation of secured solar capacities. Ø The recently launched NETR (August 2023) is expected to drive the development of Malaysia’s RE industry
Slide 23: Portfolio Summary as at 30 June 2024
PROSPECTS FOR REMAINING QUARTERS OF 2024 PORTFOLIO SUMMARY AS AT 30 JUNE 2024
Slide 24: Renewable Energy Division - Expansion
RENEWABLE ENERGY DIVISION - EXPANSION Renewable Energy Projects on Hand Ø C&I solar projects secured: - 28.8 MW energised in 1H2024. - 67.1 MW to be progressively commissioned and energised over the next 18 months. Ø Other solar projects secured: - 11.4 MW solar farm project with a state utility com
Slide 25: Renewable Energy Division Don Sahong
RENEWABLE ENERGY DIVISION DON SAHONG
Slide 26: Renewable Energy Division Don Sahong
RENEWABLE ENERGY DIVISION DON SAHONG
Slide 27: Renewable Energy Division Don Sahong
RENEWABLE ENERGY DIVISION DON SAHONG
Slide 28: Prospects - Packaging Division
PROSPECTS FOR REMAINING QUARTERS OF 2024 Packaging Division Ø Expect continuation of subdued consumer sentiment and constrained purchasing power. Ø The recent RM strength adds more challenges for export sales and profit margins, while global excess capacities will heighten price competition. Ø Despi
Slide 29: Packaging Division Bangi (Stenta)
PACKAGING DIVISION BANGI (STENTA)
Slide 30: Packaging Division Melaka (Hexachase)
PACKAGING DIVISION MELAKA (HEXACHASE)
Slide 31: Prospects - Resources Division
PROSPECTS FOR REMAINING QUARTERS OF 2024 Resources Division Ø Overall demand for lime products in this region is anticipated to remain robust, but visibility of export is uncertain, clouded by shifting competitive dynamics due to sharp changes in shipping and logistics costs, as well as heightened c
Slide 32: Prospects - Edenor Technology and Food Security Division
PROSPECTS FOR REMAINING QUARTERS OF 2024 Edenor Technology Ø The loss of Edenor in 1H2024 was primarily attributable to unscheduled plant shutdowns for repairs and upgrades. Ø Edenor’s management is optimistic about a recovery in earnings in the second half of 2024, driven by the plant’s enhanced ef
Slide 33: Food Security Division CSC Agriculture Holdings
FOOD SECURITY DIVISION CSC AGRICULTURE HOLDINGS
Slide 34: Food Security Division CSC Agriculture Holdings
FOOD SECURITY DIVISION CSC AGRICULTURE HOLDINGS
Slide 35: Our Sustainability Strategy
OUR SUSTAINABILITY STRATEGY
Slide 36: Key Sustainability Updates
Received a ‘C’ KEY SUSTAINABILITY UPDATES ‘“ a Launched our second Tier 1 Q) eco-ideal ‘supplier engagements for I conasting sd. bd the main Divisions: Official engagement Sustainability score for Climate + Responsible Sourcing with Eco-Ideal for visits for Change Policy acknowledgment GHG inventory
Slide 37: Our Sustainability Plan for 2024
OUR SUSTAINABILITY PLAN FOR 2024
Slide 38: Environment Dashboard - Jan-Jun 2024
ENVIRONMENT DASHBOARD - JAN-JUN 2024
Slide 39: Social Dashboard - Jan-Jun 2024
SOCIAL DASHBOARD - JAN-JUN 2024
Slide 40: Safety Dashboard - Jan-Jun 2024
SAFETY DASHBOARD - JAN-JUN 2024
Slide 41: Governance Dashboard - Jan-Jun 2024
GOVERNANCE DASHBOARD - JAN-JUN 2024
Slide 42: Remaining Slides for Reference (Updated)
Remaining Slides for Reference (Updated)
Slide 43: Renewable Energy Don Sahong
RENEWABLE ENERGY DON SAHONG
Slide 44: Renewable Energy Division Don Sahong
RENEWABLE ENERGY DIVISION DON SAHONG
Slide 45: 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% (2023: 91.4%) compared to other large hydro of between 40-70%. • Projected average energy gen
Slide 46: Renewable Energy Division Don Sahong
RENEWABLE ENERGY DIVISION DON SAHONG
Slide 47: Renewable Energy Division Don Sahong
RENEWABLE ENERGY DIVISION DON SAHONG
Slide 48: Renewable Energy Division Don Sahong
RENEWABLE ENERGY DIVISION DON SAHONG
Slide 49: Renewable Energy Division Don Sahong
RENEWABLE ENERGY DIVISION DON SAHONG
Slide 50: Renewable Energy Division Don Sahong
RENEWABLE ENERGY DIVISION DON SAHONG
Slide 51: Renewable Energy Division Don Sahong
RENEWABLE ENERGY DIVISION DON SAHONG
Slide 52: Renewable Energy Division Don Sahong
RENEWABLE ENERGY DIVISION DON SAHONG
Slide 53: Don Sahong: 2022-2023 Pakse Water Level and Capacity Factor/EAF
RENEWABLE ENERGY DIVISION DON SAHONG Don Sahong : 2022-2023 Pakse Water Level and Capacity Factor/EAF
Slide 54: Renewable Energy C&I Solar
RENEWABLE ENERGY C&I SOLAR
Slide 55: Renewable Energy Division C&I Solar
RENEWABLE ENERGY DIVISION C&I SOLAR
Slide 56: Renewable Energy Division Financial Highlights
RENEWABLE ENERGY DIVISION FINANCIAL HIGHLIGHTS
Slide 57: 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 58: 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 59: Packaging
PACKAGING
Slide 60: 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 61: 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 62: Packaging Division State-of-Art Machinery
PACKAGING DIVISION STATE-OF-ART MACHINERY Fuji Kikai Printing Machine Fuji Kikai 14 colours Rotogravure Printing Machine
Slide 63: Packaging Division State-of-Art Machinery
PACKAGING DIVISION STATE-OF-ART MACHINERY Super Combi 5000 Super Combi 5000 Lamination Machine
Slide 64: Packaging Division State-of-Art Machinery
PACKAGING DIVISION STATE-OF-ART MACHINERY Flat Handle Paper Bag Machine Twisted Handle Paper Bag Machine
Slide 65: Packaging Division State-of-Art Machinery
PACKAGING DIVISION STATE-OF-ART MACHINERY SOS Machine Flat & Satchel Bag Machine
Slide 66: Packaging Division State-of-Art Machinery
PACKAGING DIVISION STATE-OF-ART MACHINERY Reifenhauser LLDPE Line Vacuum Metallizer Slitter for Metallized Film
Slide 67: Packaging Division State-of-Art Machinery
PACKAGING DIVISION STATE-OF-ART MACHINERY Reifenhauser LLDPE Line Vacuum Metallizer
Slide 68: Packaging Division State-of-Art Machinery
PACKAGING DIVISION STATE-OF-ART MACHINERY Bruckner OPP Line High Capacity Roll Slitting and Winding Machine
Slide 69: Packaging Division Product Range
PACKAGING DIVISION PRODUCT RANGE
Slide 70: Packaging Division Product Range
PACKAGING DIVISION PRODUCT RANGE
Slide 71: Packaging Division Product Range
PACKAGING DIVISION PRODUCT RANGE
Slide 72: Packaging Division Financial Highlights
PACKAGING DIVISION FINANCIAL HIGHLIGHTS
Slide 73: Resources
RESOURCES
Slide 74: 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 75: 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 76: 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. 70% Financial Highlights
Slide 77: Investment in Joint Venture Edenor Technology
INVESTMENT IN JOINT VENTURE EDENOR TECHNOLOGY
Slide 78: 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 79: 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 80: Edenor Technology Plant Site
EDENOR TECHNOLOGY PLANT SITE
Slide 81: Edenor Technology Plant Layout
EDENOR TECHNOLOGY PLANT LAYOUT
Slide 82: Edenor Technology TPG Plant
EDENOR TECHNOLOGY TPG PLANT
Slide 83: 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 84: Food Security
FOOD SECURITY
Slide 85: Food Security
FOOD SECURITY “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 of comp
Slide 86: Food Security
FOOD SECURITY • 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. • Mai
Slide 87: Food Security Cambodia
FOOD SECURITY CAMBODIA
Slide 88: Food Security Cambodia
FOOD SECURITY CAMBODIA
Slide 89: Food Security Cambodia
FOOD SECURITY CAMBODIA
Slide 90: Food Security Cambodia Malaysia
FOOD SECURITY CAMBODIA MALAYSIA
Slide 91: Food Security Malaysia
FOOD SECURITY MALAYSIA
Slide 92: Food Security Malaysia
FOOD SECURITY MALAYSIA — JAMBU AIR, PINK GUAVA AND CEMPEDAK FROM AYER HITAM FARM
Slide 93: Food Security Malaysia
FOOD SECURITY MALAYSIA NANGKA FROM JEMALUANG FARM
Slide 94: Food Security Malaysia
FOOD SECURITY MALAYSIA 4 CALAMANSI, PANDAN COCONUT & CURRY LEAF FROM BIODESARU/SEDILI FARM
Slide 95: Food Security Malaysia
FOOD SECURITY MALAYSIA Ml 0 RS Gece aa DURIAN FROM ULU TIRAM FARM
Slide 96: Thank You!
THANK YOU!
Mega First Corporation Berhad — Q2 2024 Earnings Presentation on 6ix