Mega First Corp. Bhd. · MYX:MFCB
Mega First Corp. Bhd — Q4 2022 Earnings Presentation
71 slides from Mega First Corp. Bhd's earnings presentation, Feb 28, 2023
Slide 1: 4Q2022 Results Briefing
4Q2022 RESULTS BRIEFING 28 February 2023
Slide 2: Agenda
AGENDA 1. 4Q2022 Financial Review: - Earnings Review - Balance Sheet Review - Cash Flow Review - Capital Deployed - Gearing Position - JV Edenor Technology - Other Updates 2. Prospects for 2023 For reference (updated): 3. Renewable Energy Division 4. Packaging Division 5. Resources Division 6. Inves
Slide 3: 4Q2022 Earnings Overview
4Q2022 EARNINGS OVERVIEW Key Takeaway: § Revenue +29.7% to RM364 mil; Excluding one- off bargain gain, PBT +1.4% to RM117 mil. § All core divisions posted double digit revenue growth rates. Revenue of Investment Holding & Others Division boosted by RM45 mil contribution from the restart of the Tawau
Slide 4: Earnings Review - Renewable Energy Division
EARNINGS REVIEW -RENEWABLE ENERGY DIVISION 4Q2022 vs 4Q2021 § Revenue +10.2%: solar energy installed C&I solar capacity +23%, currency gain +9%, hydro tariff +1%. § Hydropower EAF remained flat at 97.4%. § Solar revenue RM1.6 mil (4Q2021: RM1.4 mil) on higher installed C&I solar capacity. § PBT +4%
Slide 5: Renewable Energy Division - Don Sahong
RENEWABLE ENERGY DIVISION -DON SAHONG Don Sahong: January to December 2022 Pakse Water Level and EAF MEGA FIRST CORPORATION BERHAD – FEB 2023 3
Slide 6: Earnings Review - Resources Division
EARNINGS REVIEW – RESOURCES DIVISION 4Q2022 vs 4Q2021 § Lime product sales volume -7%: fluctuating order/delivery patterns resulting from occasional container shortages and timing of customers scheduled/unscheduled plant stoppage. § ASP +28%: progressive selling price adjustments to defray rising pr
Slide 7: Earnings Review - Packaging Division
EARNINGS REVIEW – PACKAGING DIVISION 4Q2022 vs 4Q2021 § Revenue +18%: Higher demand for both flexible packaging products and paper bags. § PBT -38%: Higher cost of raw materials, softer demand and stiffer price competition. MEGA FIRST CORPORATION BERHAD – FEB 2023 6
Slide 8: Balance Sheet Review
BALANCE SHEET REVIEW MEGA FIRST CORPORATION BERHAD – FEB 2023 7
Slide 9: Cash Flow Review
CASH FLOW REVIEW MEGA FIRST CORPORATION BERHAD – FEB 2023 8
Slide 10: Expansionary Investment Capital Deployed
Expansionary Investment Capital Deployed MEGA FIRST CORPORATION BERHAD – FEB 2023 8
Slide 11: Gearing Position
GEARING POSITION MEGA FIRST CORPORATION BERHAD – FEB 2023 9
Slide 12: Edenor Technology JV
EDENOR TECHNOLOGY JV MEGA FIRST CORPORATION BERHAD – FEB 2023 10
Slide 13: Other Updates
OTHER UPDATES Ø Recommencement of Serudong Power operations - Recommenced operations in May 2022 to facilitate future sale of the subsidiary. - RM112 mil sales revenue in 2022 presented under “Investment Holding & Others”. - Minimal Profit and Loss contribution to Group. - Operational economic benef
Slide 14: Prospects for 2023
PROSPECTS FOR 2023 Ø 2022 Recap: § Adjusted Revenue (exclude Serudong Power): +34.2% to RM1.23 mil; § Adjusted PBT (exclude bargain gain): +14.3% to RM474 mil; § After-tax Cash Flow from operations: +23.5% to RM580 mil; § Capital investment: RM188 mil versus RM296 mil in 2021; § Net Debt-to-Equity:
Slide 15: Prospects for 2023: Capital Commitment at Dec 2022
Prospects for 2023: Capital Commitment at 31 Dec 2022 MEGA FIRST CORPORATION BERHAD – FEB 2023 11
Slide 16: Prospects for 2023 (Cont'd) - Renewable Energy Division
PROSPECTS FOR 2023 (CONT’D) Renewable Energy Division Ø Estimated EAF about 2% Y-o-Y lower to 92-93%, due to deferment of annual turbine maintenance from Aug/Sep 2022 to Feb/Mar 2023. Ø Assume a stable exchange rate at RM4.40/USD, PBT expected to be marginally lower on expected lower EAF and higher
Slide 17: Renewable Energy Portfolio Summary at 31 Dec 2022
PROSPECTS FOR 2023 (CONT’D) Renewable Energy Portfolio Summary at 31 Dec 2022 MEGA FIRST CORPORATION BERHAD – FEB 2023 13
Slide 18: 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 Dec 2021. Expected completion in 3Q2024. Expected EA
Slide 19: Renewable Energy Division - 5th Turbine Construction Progress
RENEWABLE ENERGY DIVISION – 5TH TURBINE CONSTRUCTION PROGRESS MEGA FIRST CORPORATION BERHAD – FEB 2023 15
Slide 20: Renewable Energy Division - 5th Turbine Construction Progress
RENEWABLE ENERGY DIVISION – 5TH TURBINE CONSTRUCTION PROGRESS MEGA FIRST CORPORATION BERHAD – FEB 2023 16
Slide 21: Renewable Energy Division - 5th Turbine Construction Progress
RENEWABLE ENERGY DIVISION – 5TH TURBINE CONSTRUCTION PROGRESS MEGA FIRST CORPORATION BERHAD – FEB 2023 17
Slide 22: Prospects for 2023 (Cont'd) - Resources Division
PROSPECTS FOR 2023 (CONT’D) Resources Division Ø Underlying regional demand for lime products is expected to remain robust. Ø Despite global recession risk and ongoing geopolitical conflict, we are optimistic of defending or further improving sales deliveries to customers. Ø Petcoke prices have rece
Slide 23: Prospects for 2023 (Cont'd) - Packaging Division
PROSPECTS FOR 2023 (CONT’D) Packaging Division Ø 2023 to kick off the year on a softer start due to continued supply chain inventory overhang and a generally weak consumer appetite. Ø Expects a healthy positive top line growth for both flexible packaging products and paper bags on consumption recove
Slide 24: Prospects for 2023 (Cont'd) - Edenor Technology Group
PROSPECTS FOR 2023 (CONT’D) Edenor Technology Group Ø Strategies to raise profitability: - Improve its manufacturing process reliability; - Upgrade the quality of its workforce; - Strengthen its distribution and agency network; - Broaden its specialty product range; - Minimise capacity loss from pla
Slide 25: Remaining Slides for Reference - Updated
(Remaining Slides for Reference - Updated) MEGA FIRST CORPORATION BERHAD – FEB 2023 22
Slide 26: Renewable Energy
RENEWABLE ENERGY DON SAHONG HYDROPOWER & COMMERCIAL AND INDUSTRIAL SOLAR MEGA FIRST CORPORATION BERHAD – FEB 2023 22
Slide 27: Renewable Energy Division - Don Sahong
RENEWABLE ENERGY DIVISION – DON SAHONG MEGA FIRST CORPORATION BERHAD – FEB 2023 23
Slide 28: 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 generat
Slide 29: Renewable Energy Division - Don Sahong
RENEWABLE ENERGY DIVISION – DON SAHONG MEGA FIRST CORPORATION BERHAD – FEB 2023 25
Slide 30: Renewable Energy Division - Don Sahong
RENEWABLE ENERGY DIVISION – DON SAHONG MEGA FIRST CORPORATION BERHAD – FEB 2023 26
Slide 31: Renewable Energy Division - Don Sahong
RENEWABLE ENERGY DIVISION – DON SAHONG Don Sahong: Year to date Pakse Water Level and EAF MEGA FIRST CORPORATION BERHAD – FEB 2023 27
Slide 32: Renewable Energy Division - C&I Solar
RENEWABLE ENERGY DIVISION – C&I SOLAR MEGA FIRST CORPORATION BERHAD – FEB 2023 28
Slide 33: Renewable Energy Division - Financial Highlights
RENEWABLE ENERGY DIVISION – FINANCIAL HIGHLIGHTS MEGA FIRST CORPORATION BERHAD – FEB 2023 29
Slide 34: 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 signif
Slide 35: 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 MEGA FIRST CORPORATION
Slide 36: Packaging
PACKAGING MEGA FIRST CORPORATION BERHAD – FEB 2023 47
Slide 37: 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 38: 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 39: Packaging Division - State-of-Art Machinery
PACKAGING DIVISION – STATE-OF-ART MACHINERY Fuji Kikai Printing Machine New Fuji Kikai 14 colours Rotogravure Printing Machine commissioned in 1Q2022 MEGA FIRST CORPORATION BERHAD – FEB 2023 35
Slide 40: Packaging Division - State-of-Art Machinery
PACKAGING DIVISION – STATE-OF-ART MACHINERY Super Combi 5000 New Super Combi 5000 Lamination Machine MEGA FIRST CORPORATION BERHAD – FEB 2023 35
Slide 41: Packaging Division - State-of-Art Machinery
PACKAGING DIVISION – STATE-OF-ART MACHINERY Flat Handle Paper Bag Machine Twisted Handle Paper Bag Machine MEGA FIRST CORPORATION BERHAD – FEB 2023 37
Slide 42: Packaging Division - State-of-Art Machinery
PACKAGING DIVISION – STATE-OF-ART MACHINERY SOS Machine Flat & Satchel Bag Machine MEGA FIRST CORPORATION BERHAD – FEB 2023 38
Slide 43: Packaging Division - State-of-Art Machinery
PACKAGING DIVISION – STATE-OF-ART MACHINERY MFCB acquired Stenta in July 2021. Reifenhauser LLDPE Line Vacuum Metallizer MEGA FIRST CORPORATION BERHAD – FEB 2023 39
Slide 44: Packaging Division - State-of-Art Machinery
PACKAGING DIVISION – STATE-OF-ART MACHINERY Reifenhauser LLDPE Line Vacuum Metallizer MEGA FIRST CORPORATION BERHAD – FEB 2023 40
Slide 45: Packaging Division - State-of-Art Machinery
PACKAGING DIVISION – STATE-OF-ART MACHINERY Bruckner OPP Line High Capacity Roll Slitting and Winding Machine MEGA FIRST CORPORATION BERHAD – FEB 2023 41
Slide 46: Packaging Division - Product Range
PACKAGING DIVISION – PRODUCT RANGE MEGA FIRST CORPORATION BERHAD – FEB 2023 42
Slide 47: Packaging Division - Product Range
PACKAGING DIVISION – PRODUCT RANGE MEGA FIRST CORPORATION BERHAD – FEB 2023 43
Slide 48: Packaging Division - Product Range
PACKAGING DIVISION – PRODUCT RANGE MEGA FIRST CORPORATION BERHAD – FEB 2023 44
Slide 49: Packaging Division - Customer Base
PACKAGING DIVISION – CUSTOMER BASE MEGA FIRST CORPORATION BERHAD – FEB 2023 45
Slide 50: Packaging Division - Financial Highlights
PACKAGING DIVISION – FINANCIAL HIGHLIGHTS MEGA FIRST CORPORATION BERHAD – FEB 2023 46
Slide 51: Resources
RESOURCES LARGEST QUICKLIME PRODUCER IN MALAYSIA MEGA FIRST CORPORATION BERHAD – FEB 2023 47
Slide 52: Resources Division
RESOURCES DIVISION MEGA FIRST CORPORATION BERHAD – FEB 2023 48
Slide 53: 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 material
Slide 54: 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 MEGA FIRST CORPORATION BERHAD – FEB 2023 50
Slide 55: Resources Division - Mission & Challenges
RESOURCES DIVISION – MISSION & CHALLENGES 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% Near term challenges High and uncertain fuel cost Hi
Slide 56: Resources Division - Mitigating Measures & Financials
RESOURCES DIVISION – MITIGATING MEASURES & FINANCIALS Mitigating measures Export diversion to markets less affected by shipping constraints Expanding customer base to mitigate impact from customer demand volatility Higher stock holdings to lower production disruption and manage price volatility Sele
Slide 57: Investment in Edenor Technology
INVESTMENT IN EDENOR TECHNOLOGY MEGA FIRST CORPORATION BERHAD – FEB 2023 53
Slide 58: Investment in Edenor Technology
INVESTMENT IN 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 completed on 1 Novemb
Slide 59: Investment in Edenor Technology
INVESTMENT IN 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 Acquisition Value: RM73 million
Slide 60: Investment in Edenor Technology - Plant Site
INVESTMENT IN EDENOR TECHNOLOGY – PLANT SITE MEGA FIRST CORPORATION BERHAD – FEB 2023 56
Slide 61: Investment in Edenor Technology - Plant Layout
INVESTMENT IN EDENOR TECHNOLOGY – PLANT LAYOUT MEGA FIRST CORPORATION BERHAD – FEB 2023 57
Slide 62: Investment in Edenor Technology - TPG Plant
INVESTMENT IN EDENOR TECHNOLOGY – TPG PLANT MEGA FIRST CORPORATION BERHAD – FEB 2023 58
Slide 63: Investment in Edenor Technology - Turnaround Strategy
INVESTMENT IN EDENOR TECHNOLOGY – 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/
Slide 64: Investment in Edenor Technology - Financial Outlook
INVESTMENT IN EDENOR TECHNOLOGY – FINANCIAL OUTLOOK § Post-acquisition 2-month Consolidated Edenor earnings: Ø Profit RM244 million (Including one-off unallocated bargain gain recognised as income) Ø Loss RM6.6 million (Excluding unallocated bargain gain) Ø Reduced 2-month loss despite maintenance s
Slide 65: Plantation
PLANTATION MONDULKIRI, CAMBODIA MEGA FIRST CORPORATION BERHAD – FEB 2023 47
Slide 66: Plantation Update
PLANTATION UPDATE MEGA FIRST CORPORATION BERHAD – FEB 2023 64
Slide 67: Plantation Update
PLANTATION UPDATE MEGA FIRST CORPORATION BERHAD – FEB 2023 64
Slide 68: Plantation Update
PLANTATION 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 69: Plantation Update
PLANTATION UPDATE 1) Background 2) Land 3) Plans • Main crops: coconuts & • 50-year concession on 6,428 • Planned planting in 2023: 300- macadamia hectares. 400 hectares. • Cumulative investment as • Estimated plantable area: • Target to complete planting by at 31 December 2022: 4,500 hectares end o
Slide 70: Plantation Update - Planting Philosophy
PLANTATION UPDATE – PLANTING PHILOSOPHY “RESPECT NATURE, WORKWITH NATURE” Water and irrigation key to sustainable cultivation: (i) Protect and improve O’plai River catchment areas to collect and store rainwater; (ii) Development wetland pockets, creation of mini lakes along extensive riparian corrid
Slide 71: Thank You
THANK YOU 71
Mega First Corporation Berhad — Q4 2022 Earnings Presentation on 6ix