Mega First Corp. Bhd. · MYX:MFCB
Mega First Corp. Bhd — Q4 2021 Earnings Presentation
64 slides from Mega First Corp. Bhd's earnings presentation, Feb 28, 2022
Slide 1: 4Q2021 and 2021 Results Briefing
MEGA FIRST CORPORATION BERHAD 4Q2021 AND 2021 RESULTS BRIEFING 28 FEBRUARY 2022 Yeow See Yuen MEGA FIRST CORPORATION BERHAD - FEB 2022 0
Slide 2: Agenda
AGENDA 1. 4Q2021 and year 2021 financial review: - Earnings review - Balance Sheet review - Cash Flow review - Gearing position - Dividend 2. Renewable Energy Division 1. Packaging Division 2. Resources Division 4. Investment in joint venture Edenor Technology 5. Plantation update MEGA FIRST CORPORA
Slide 3: Financial Review – Revenue
FINANCIAL REVIEW – REVENUE Revenue - 4Q2021 (RM280.6 million; +31%) Revenue - 2021 (RM914.7 million; +19%) Investment Holding Investment Holding 2% 2% Packaging 23% Packaging 30% Renewable Energy 52% Renewable Energy 58% Resources 17% Resources 16% MEGA FIRST CORPORATION BERHAD - FEB 2022 2
Slide 4: Financial Review – Pre-tax Profit
FINANCIAL REVIEW – PRE-TAX PROFIT PBT - 4Q2021 (RM241.0 million; +108%) PBT - 2021 (RM539.6 million; +39%) Renewable Energy 46% Investment Holding 21% Packaging Renewable Energy 4% 72% Investment Holding 48% Resources 3% Packaging 4% Resources 2% MEGA FIRST CORPORATION BERHAD - FEB 2022 3
Slide 5: Financial Review – Earnings Breakdown
FINANCIAL REVIEW – EARNINGS BREAKDOWN 4Q2021 4Q2020 % change 2021 2020 % change RM'000 RM'000 RM'000 RM'000 Continuing Operations Revenue Renewable Energy 146,641 139,008 5% 533,864 510,214 5% Resources 43,329 40,660 7% 154,880 142,819 8% Packaging 84,105 28,805 192% 208,217 97,775 113% Investment h
Slide 6: Renewable Energy Division
RENEWABLE ENERGY DIVISION Renewable Energy Division 2021 2020 YoY Change (RM million) 1Q 2Q 3Q 4Q Total 1Q 2Q 3Q 4Q Total 1Q 2Q 3Q 4Q Total Revenue 114.2 138.2 134.9 146.6 533.9 103.3 130.4 137.5 139 510.2 10.6% 6.0% -1.9% 5.5% 4.6% PBT 78.2 98.7 98.8 109.9 385.6 64.7 93.7 102.3 111.4 372.1 20.9% 5.
Slide 7: Renewable Energy Division (Cont'd)
RENEWABLE ENERGY DIVISION (CONT’D) 2021 vs 2020 Hydro energy sales +3.9%. Solar energy sales RM4.0 mil vs. RM0.4 million in 2020 on 13.1 MW new capacity commissioned (cumulative 14.5 MW at 31 Dec 2021). Don Sahong average EAF at 91.0% vs 86.4% in 2020, despite longer scheduled turbine maintena
Slide 8: Resources Division
RESOURCES DIVISION Resource Division 2021 2020 YoY Change (RM million) 1Q 2Q 3Q 4Q Total 1Q 2Q 3Q 4Q Total 1Q 2Q 3Q 4Q Total Revenue 44.6 35.5 31.5 43.3 154.9 34.5 26.6 41.00 40.7 142.8 29.3% 33.5% -23.2% 6.4% 8.5% PBT 6.0 4.4 1.9 4.4 16.7 4.3 2.0 7.1 5.4 18.8 39.5% 120.0% -73.2% -18.5% -11.2% 4Q202
Slide 9: Resources Division (Cont'd)
RESOURCES DIVISION (CONT’D) 2021 vs 2020 Lime products revenue +5.5% to RM137.5 million. Other products revenue +39.2% on demand recovery post more severe MCO measures in 1H2020. Lime product volume +5.9% on domestic demand recovery +19.1%, which more than offset 1.5% decline in export volume
Slide 10: Packaging Division
PACKAGING DIVISION Packaging Division 2021 2020 YoY Change (RM million) 1Q 2Q 3Q 4Q Total 1Q 2Q 3Q 4Q Total 1Q 2Q 3Q 4Q Total Revenue 30.7 30.0 63.4 84.1 208.2 19.2 21.6 28.2 28.8 97.8 59.9% 38.9% 124.8% 192.0% 112.9% PBT 2.6 1.4 7.5 10.7 22.2 0.5 1.7 3.5 3.8 9.5 420.0% -17.6% 114.3% 181.6% 133.7% 4
Slide 11: Financial Review: Balance Sheet
FINANCIAL REVIEW: BALANCE SHEET Changes in Key Balance Sheet Items As at 31.12.2021 As at 31.12.2020 Change Explanation (RM million) (RM million) (RM million) Service concession asset 1,922 1,932 (10) RM70.8 MIL translation gain, less RM80.5 MIL amortisation PPE & ROU assets 540 355 185 Consolidatio
Slide 12: Financial Review: Cash Flow
FINANCIAL REVIEW: CASH FLOW 2021 (RM million) After-tax cash from operating activities 468.8 Net cash inflow from non-operating investment activities 17.8 New capital from minority shareholders of subsidiaries 8.5 Total cash made avalvable to the Group 495.1 Investing Activities Acquistion of Stenta
Slide 13: Financial Review: Gearing Position
FINANCIAL REVIEW: GEARING POSITION MFCB Group Net Gearing As at 31.12.2021 As at 31.12.2020 Change (RM million) (RM million) (RM million) Total Cash 257.6 93.6 164.0 Total Debt (777.9) (657.9) (120.0) Net Debt (520.3) (564.3) 44.0 Equity 2,739.6 2,165.6 574.0 Net Debt / Equity Ratio 19.0% 26.1% MEGA
Slide 14: Financial Review: Dividend
FINANCIAL REVIEW: DIVIDEND ▪ Final Dividend declared: 3.50 sen (2020: 3.25 sen; adjusted for stock split) ▪ Full year dividend 6.75 sen (2020: 6.25 sen; adjusted for stock split) ▪ Forward plan: Gradual step-up approx. 10% p.a. to target 30-40% payout, subject to cash flow requirement. ▪ Capital com
Slide 15: Renewable Energy Division – Current Portfolio
RENEWABLE ENERGY DIVISION – CURRENT PORTFOLIO Completed capacity: 275 MW Hydro: 260 MW Solar: 15 MW Capacity secured/under construction: 90 MW Hydro: 65 MW Solar: 25 MW Total Capacity: 365 MW Hydro: 325 MW Solar: 40 MW MEGA FIRST CORPORATION BERHAD - FEB 2022 14
Slide 16: Renewable Energy Division – Current Portfolio
RENEWABLE ENERGY DIVISION – CURRENT PORTFOLIO MEGA FIRST CORPORATION BERHAD - FEB 2022 15
Slide 17: Renewable Energy Division – Current Portfolio
RENEWABLE ENERGY DIVISION – CURRENT PORTFOLIO MEGA FIRST CORPORATION BERHAD - FEB 2022 16
Slide 18: Renewable Energy Division – Current Portfolio
RENEWABLE ENERGY DIVISION – CURRENT PORTFOLIO MEGA FIRST CORPORATION BERHAD - FEB 2022 17
Slide 19: 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% (2021: 91%) compared to other large hydro of between 40-70%. Projected average energy gen
Slide 20: Renewable Energy Division – Don Sahong
RENEWABLE ENERGY DIVISION – DON SAHONG MEGA FIRST CORPORATION BERHAD - FEB 2022 19
Slide 21: Renewable Energy Division – Don Sahong
RENEWABLE ENERGY DIVISION – DON SAHONG Don Sahong: 2021 Year to date Pakse Water Level and EAF Pakse Water Level - 2021 vs 2020 Capacity Factor/EAF- 2021 vs 2020 9.00 110.0% 8.00 100.0% 7.00 6.00 90.0% 5.00 4.00 80.0% 3.00 2.00 70.0% 1.00 0.00 60.0% 1-Jan 1-Feb 1-Mar 1-Apr 1-May 1-Jun 1-Jul 1-Aug 1-
Slide 22: Renewable Energy Division – Strategy & Strength
RENEWABLE ENERGY DIVISION – STRATEGY & STRENGTH Strategy Leveraging current strong and stable cashflow of approx. RM450 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 si
Slide 23: 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 CORPO
Slide 24: Renewable Energy Division – Expansion
RENEWABLE ENERGY DIVISION – EXPANSION New Projects On Hand 65 MW 5th turbine expansion of Don Sahong costing approx. US$65 million or approx. US$1mil/MW (vs US$1.4 mil/MW for the first 4 turbines). Construction commenced in Dec 2021. Expected completion in 3Q2024. Expected EAF 41%. 25.3 MW C&I s
Slide 25: Renewable Energy Division – 5th Turbine Construction Progress
RENEWABLE ENERGY DIVISION – 5TH TURBINE CONSTRUCTION PROGRESS MEGA FIRST CORPORATION BERHAD - FEB 2022 24
Slide 26: Renewable Energy Division – Financial Highlights
RENEWABLE ENERGY DIVISION – FINANCIAL HIGHLIGHTS 5-Year Earnings Summary 2017 2018 2019 2020 2021 (RM million) (RM million) (RM million) (RM million) (RM million) Revenue - Energy - - 35,086 510,214 533,864 - Construction 645,441 656,228 435,289 - - 645,441 656,228 470,375 510,214 533,864 Profit bef
Slide 27: Renewable Energy Division – Prospects for 2022
RENEWABLE ENERGY DIVISION – PROSPECTS FOR 2022 Hydro Power (Don Sahong) Average 2021 EAF 91.0% (2020: 86.4%). Current dry season from Nov 2021 to Apr 2022 critical in determining average EAF for 2022. Based on y-t-d generation data, and assuming no unusual decline in water level for remaining
Slide 28: 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 plastic packaging, and stickers and labels. Global trends: Consumers and our
Slide 29: 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 proc
Slide 30: Packaging Division – State-of-Art Machinery
PACKAGING DIVISION – STATE-OF-ART MACHINERY New Fuji Kikai 14 colours Rotogravure Printing Machine Expected commissioning in 1Q 2022 Fuji Kikai Printing Machine MEGA FIRST CORPORATION BERHAD - FEB 2022 29
Slide 31: 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 2022 30
Slide 32: Packaging Division – State-of-Art Machinery
PACKAGING DIVISION – STATE-OF-ART MACHINERY SOS Machine Flat & Satchel Bag Machine MEGA FIRST CORPORATION BERHAD - FEB 2022 31
Slide 33: 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 2022 32
Slide 34: 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 2022 33
Slide 35: Packaging Division – Product Range
PACKAGING DIVISION – PRODUCT RANGE MEGA FIRST CORPORATION BERHAD - FEB 2022 34
Slide 36: Packaging Division – Product Range
PACKAGING DIVISION – PRODUCT RANGE MEGA FIRST CORPORATION BERHAD - FEB 2022 35
Slide 37: Packaging Division – Product Range
PACKAGING DIVISION – PRODUCT RANGE MEGA FIRST CORPORATION BERHAD - FEB 2022 36
Slide 38: Packaging Division – Customer Base
PACKAGING DIVISION – CUSTOMER BASE MEGA FIRST CORPORATION BERHAD - FEB 2022 37
Slide 39: Packaging Division – 5-Year Expansion Plans
PACKAGING DIVISION – 5-YEAR EXPANSION PLANS Hexachase A new mega factory will be constructed on a 10.4-acre industrial land in Malaka. Status: Phase 1 factory building design done; Submission Feb 2022. When completed, the new factory will add approximately 273,000 sf of total space from approx
Slide 40: Packaging Division – Financial Highlights
PACKAGING DIVISION – FINANCIAL HIGHLIGHTS 5-Year Earnings Summary 2017 2018 2019 2020 2021 (RM million) (RM million) (RM million) (RM million) (RM million) Revenue 51,211 57,433 68,427 97,775 208,217 Profit before tax 740 (4) (501) 9,461 22,219 MEGA FIRST CORPORATION BERHAD - FEB 2022 39
Slide 41: Packaging Division – Prospects for 2022
PACKAGING DIVISION – PROSPECTS FOR 2022 Full year contribution from Stenta (2021: 5 months). Stenta presently operating at near capacity. Hexachase to grow faster than 2021 (2021: Revenue +28%; PBT +15%). Bolstered by new production capacities (2021/2022) and increasing demand from existing
Slide 42: Resources Division
RESOURCES DIVISION MEGA FIRST CORPORATION BERHAD - FEB 2022 41
Slide 43: 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 m
Slide 44: 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 2022 43
Slide 45: 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. 70% Near term challenges High and uncertain fue
Slide 46: 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 individual customer demand volatility Higher stock holdings to lower production disruption and manage pric
Slide 47: Resources Division – Prospects for 2022
RESOURCES DIVISION – PROSPECTS FOR 2022 Expected higher top line in 2022, barring further economic disruption from Covid-19 and transport disarrangement. Domestic volume expected to continue to benefit from a gradual recovery in economic activities. Export volume, after declining 1.5% in 2021,
Slide 48: 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
Slide 49: 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
Slide 50: Investment in Edenor Technology – Plant Site
INVESTMENT IN EDENOR TECHNOLOGY – PLANT SITE MEGA FIRST CORPORATION BERHAD - FEB 2022 49
Slide 51: Investment in Edenor Technology – Plant Layout
INVESTMENT IN EDENOR TECHNOLOGY – PLANT LAYOUT MEGA FIRST CORPORATION BERHAD - FEB 2022 50
Slide 52: Investment in Edenor Technology – TPG Plant
INVESTMENT IN EDENOR TECHNOLOGY – TPG PLANT MEGA FIRST CORPORATION BERHAD - FEB 2022 51
Slide 53: 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 54: Investment in Edenor Technology – Financial Outlook
INVESTMENT IN EDENOR TECHNOLOGY – FINANCIAL OUTLOOK ▪ Post-acquisition 2-month Consolidated Edenor earnings: ➢ Profit RM244 million (Including one-off unallocated bargain gain recognised as income) ➢ Loss RM6.6 million (Excluding unallocated bargain gain) ➢ Reduced 2-month loss despite maintenance s
Slide 55: Plantation Update
PLANTATION UPDATE 1) Background 2) Land 3) Plans • Main crops: coconuts & 50-year concession on 6,420 • Planned planting in 2022: 500 macadamia hectares hectares Est. plantable area: 4,500 • Target to complete planting by • Cumulative investment as at hectares end of 2025. 31 Dec 2021: RM96 mil
Slide 56: Plantation Update – Planting Philosophy
PLANTATION UPDATE – PLANTING PHILOSOPHY “RESPECT NATURE, WORK WITH 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 cor
Slide 57: Plantation Update
PLANTATION UPDATE MFCB obtained approval from the Royal Government of Cambodia for the concession of a plot of land measuring 6,420 hectares situated in the Namlear Wildlife Sanctuary Zone, Mondulkiri Province, Kingdom of Cambodia for agricultural development. The term of the concession is 50 years,
Slide 58: Plantation Update
PLANTATION UPDATE Coconut planted fields MEGA FIRST CORPORATION BERHAD - FEB 2022 57
Slide 59: Plantation Update
PLANTATION UPDATE MEGA FIRST CORPORATION BERHAD - FEB 2022 58
Slide 60: Plantation Update
PLANTATION UPDATE Main nursery MEGA FIRST CORPORATION BERHAD - FEB 2022 59
Slide 61: Plantation Update
PLANTATION UPDATE Still photo of LPN West One South Division (natural) coconut seedbeds MEGA FIRST CORPORATION BERHAD - FEB 2022 60
Slide 62: Plantation Update
PLANTATION UPDATE Macadamia Trees MEGA FIRST CORPORATION BERHAD - FEB 2022 61
Slide 63: Plantation Update
PLANTATION UPDATE Coffee Roselle Quinoa Nanka Passion fruit Potatoes Avocado MEGA FIRST CORPORATION BERHAD - FEB 2022 62
Slide 64: Thank You
THANK YOU MEGA FIRST CORPORATION BERHAD - FEB 2022 63
Mega First Corporation Berhad — Q4 2021 Earnings Presentation on 6ix