4 th Quarter 2013 Analyst/Investor Briefing 26 Feb 2014 3.00pm - - PowerPoint PPT Presentation

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TH PLANTATIONS BERHAD (Company No: 12696-M)

4th Quarter 2013

Analyst/Investor Briefing

26 Feb 2014 3.00pm

TH PLANTATIONS BERHAD (Company No: 12696-M)

Presented by: Radin Rosli Radin Suhadi

Plantations Director

Aizzura Ab Rahim

Investor Relations

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TH PLANTATIONS BERHAD (Company No: 12696-M)

Performance highlights

23.86 MT/Ha (+11% YoY) FFB Yield/Ha +66% YoY CPO Production +49% YoY FFB Production +45% YoY PK Production 20.05% Oil Extraction Rate +26% YoY EBITDA* +25% YoY Revenue +15% YoY Profit After Tax*

FY13 highlights

* Excluding RM101m surplus over fair value of net assets from 2012 acquisitions

3.62 sen per share (50% of PATAMI) Proposed Dividend

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TH PLANTATIONS BERHAD (Company No: 12696-M)

Area Statement – as at 31 December 2013

Oil Palm Peninsular Sabah Sarawak Total Mature 11,531 7,792 13,549 32,871 Immature 7,003 729 18,883 26,615 Total planted 18,533 8,521 32,432 59,486 In course of planting 785 5,517 6,302 Rubber Sabah Mature

• Immature

2,982 Total planted 2,982 In course of planting 3,200 Mature Oil Palm 34% Immature Oil Palm 27% Immature Rubber 3% Immature Teak 5% In-course of Planting 10% Infra & Others 21%

Total land bank: 97,712 Ha

>25 years (Old Mature) 20 - 25 (Old Mature) 10 - 19 (Prime Mature) 4 - 9 (Young Mature)

42% 25% 18% 15%

Average age: 14 years

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TH PLANTATIONS BERHAD (Company No: 12696-M)

A closer look at revenue

Avg Mature Area (ha) 24,392 32,763 FY12 FY13

+34%

FFB Production (MT) 524,665 781,577 FY12 FY13

+49%

CPO Production (MT) 98,975 164,529 FY12 FY13

+66%

FFB Processed (MT) 489,789 820,395 FY12 FY13

+67%

CPO Sales (MT) 99,706 168,446 FY12 FY13

+69%

PK Production (MT) 27,151 39,343 FY12 FY13

+45%

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TH PLANTATIONS BERHAD (Company No: 12696-M)

A closer look at revenue

FFB Yield (MT/ha) 21.51 23.86 FY12 FY13 +11% KER (%) 5.54 4.80 FY12 FY13

• 0.74

ppt

OER (%) 20.21 20.05 FY12 FY13

• 0.16

ppt

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TH PLANTATIONS BERHAD (Company No: 12696-M)

FFB contribution by region

33% 43% 24%

2013

47% 19% 34%

2012

Peninsular Sabah Sarawak Peninsular Sabah Sarawak

Higher contribution from the Sarawak region following acquisitions made in 2012

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TH PLANTATIONS BERHAD (Company No: 12696-M)

CPO prices 17% lower than last year

ASP FY13 FY12 CPO RM2,200 RM2,661 PK RM1,294 RM1,602 FFB RM362 RM472

• 17%
• 19%
• 23%

Sabah Sarawak Sales Tax 7.5% 5% Discount

RM80 RM80

ASP 4Q13 4Q12 CPO RM2,323 RM2,038 PK RM1,524 RM1,113 FFB RM409 RM327

+14% +37% +25%

Sabah Sarawak Sales Tax 7.5% 5% Discount

RM30-40 RM20-30

However, 4Q13 prices stronger than previous year

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TH PLANTATIONS BERHAD (Company No: 12696-M)

1,319 1,148 FY12 FY13 CPO Production Cost (RM/MT)

• 13%

Higher efficiency has led to lower production cost/MT

Average

248 184 FY12 FY13 Estate Production Cost (RM/MT)

• 26%

58 57 FY12 FY13 Mill Manufacturing Cost (RM/MT)

• 2%

*excl depreciation *excl depreciation *excl depreciation

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TH PLANTATIONS BERHAD (Company No: 12696-M)

Overview of Profit & Loss (FY13)

(RM ‘000) FY13 FY12 Revenue 469,952 375,846 Sales of CPO 370,946 265,335 Sales of PK 52,197 41,752 Sales of FFB 30,058 45,342 Management fees 17,110 23,344 Dividends 91 74 Cost of Sales (353,762) (262,511) Gross Profit 116,190 113,335 Other Expenses Admin expenses (17,630) (16,561) Other operating expenses (7,354) (7,599) Zakat (278) 119 Finance costs (24,115) 10,287 Other Income 4,232 106,844 Profit Before Tax 71,045 185,851 Tax 5,458 (18,316) Profit After Tax 76,502 167,535 EBITDA 171,093 135,597 Gross Profit before amortisation 171,583 139,886

Revenue up by 25% EBITDA up by 26% Gross profit excl amort up by 23% Gross profit up by 2.5% PBT (excl FY12 other income) down by 16% PAT (excl FY12 other income) up by 15% Costs up by 35% in line with acquisitions and higher production

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TH PLANTATIONS BERHAD (Company No: 12696-M)

A closer look at costs

Cost of Sales FY13 FY12 Variance (%) Remarks Estate Production Cost 144,420 130,134 +11% In line with higher production and better efficiencies (Note: lower unit production cost) Overhead 26,458 23,562 +12% In line with major acquisitions FFB Purchases 55,029 37,841 +45% In line with commissioning of RUPOM, inclusion of GPOM as well as efforts to increase mill utilisation Mill Manufacturing Cost 46,643 28,374 +64% In line with higher production and new mills (Note: lower unit processing cost) Depreciation – Estates 7,157 4,761 +50% In line with major acquisitions Depreciation – Mill 12,171 7,858 +55% In line with major acquisitions Amortisation 55,393 26,551 +109% In line with major acquisitions Other Costs FY13 FY12 Variance (%) Remarks Admin Expenses 17,630 16,561 +6% Costs related to acquisitions Other operating expenses 6,142 6,311

• 3%

Minimal variance Depreciation 1,212 1,289

• 6%

Minimal variance Zakat 278 (119) n.m. Current assets > Current liabilities Finance Cost 24,115 10,287 +134% Higher debt due to major acquisitions

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TH PLANTATIONS BERHAD (Company No: 12696-M)

Performance highlights

+14% YoY +5% QoQ CPO Realised Prices +65% YoY +7% QoQ CPO Production +23% YoY

• 4% QoQ

FFB Production +50% YoY +9% QoQ PK Production +37% YoY +25% QoQ PK Realised Prices +85% YoY +69% QoQ EBITDA* +56% YoY +19% QoQ Revenue +101% YoY +11% QoQ Profit Before Tax*

4Q13 highlights

* Excluding RM101m surplus over fair value of net assets from 2012 acquisitions

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TH PLANTATIONS BERHAD (Company No: 12696-M)

A closer look at revenue indicators

Avg Mature Area (ha) 24,392 32,763 32,763 4Q12 4Q13 3Q13

+34%

FFB Production (MT) 176,180 217,367 227,407 4Q12 4Q13 3Q13

+23%

CPO Production (MT) 31,898 52,510 49,130 4Q12 4Q13 3Q13

+65%

FFB Processed (MT) 157,153 264,085 241,291 4Q12 4Q13 3Q13

+68%

CPO Sales (MT) 36,736 53,097 48,568 4Q12 4Q13 3Q13

+45%

PK Production (MT) 8,375 12,552 11,493 4Q12 4Q13 3Q13

+50%

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TH PLANTATIONS BERHAD (Company No: 12696-M)

A closer look at revenue indicators

FFB Yield (MT/ha) 7.22 6.63 6.92 4Q12 4Q13 3Q13

• 8%

KER (%) 5.33 4.75 4.76 4Q12 4Q13 3Q13

• 0.58

ppt

OER (%) 20.30 19.88 20.36 4Q12 4Q13 3Q13

• 0.42

ppt

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TH PLANTATIONS BERHAD (Company No: 12696-M)

4.51 4.66 5.76 7.22 4.89 5.41 6.92 6.61 0.0 1.0 2.0 3.0 4.0 5.0 6.0 7.0 8.0

• 50,000

100,000 150,000 200,000 250,000 1Q12 2Q12 3Q12 4Q12 1Q13 2Q13 3Q13 4Q13

Higher growth in FFB production seen

FFB Production (MT)

Post major acquisitions

FFB Yield/hectare (MT/Ha)

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TH PLANTATIONS BERHAD (Company No: 12696-M)

Progress Update – PT PKP Acquisition Completed

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TH PLANTATIONS BERHAD (Company No: 12696-M)

THP to develop oil palm plantation in Kalimantan

• Acquisition completed on 11 January 2014
• THP now owns 93% stake in PT Persada Kencana Prima
• Approx 11,000 hectares of land bank
• Development work commenced, nursery and land-clearing underway
• Expect to fully develop in 3-4 years

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TH PLANTATIONS BERHAD (Company No: 12696-M)

Outlook – Higher production, improved prices

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TH PLANTATIONS BERHAD (Company No: 12696-M)

Outlook for FY14  Production expected to grow by 10% YoY  However, wet season in 4Q13 and current dry spell may affect production in near term  Unit production cost will continue to improve with more efficiency measures and higher productivity  CPO prices are expected to remain firm in 1H14 supported by lower stockpiles and increase in biodiesel demand  We will leverage on current levels of CPO price with forward sales of CPO

Production Efficiency CPO Price

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TH PLANTATIONS BERHAD (Company No: 12696-M)

Key takeaway 1 – EBITDA reasonably sustained

40% 36% 39% 30% 30% 32% 42% 38% 18% 23% 36% 12% 7% 11% 15% 26% 0% 5% 10% 15% 20% 25% 30% 35% 40% 45%

• 10,000

20,000 30,000 40,000 50,000 60,000 70,000 1Q12 2Q12 3Q12 4Q12 1Q13 2Q13 3Q13 4Q13 EBITDA EBITDA Margin PAT Margin EBITDA (RM) EBITDA margin (%)

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TH PLANTATIONS BERHAD (Company No: 12696-M)

Key takeaway 2 - FFB production to grow at CAGR of 14% in next 6 years

321,273 286,723 347,546 519,289 463,949 513,276 524,665 781,577 820,395 1,089,896 1,208,760 1,362,490 1,482,805 1,567,658 22.43 19.89 14.40 21.48 20.58 22.39 21.51 23.86 21.36 21.91 22.57 22.89 23.95 24.69

14 16 18 20 22 24 26

• 200,000

400,000 600,000 800,000 1,000,000 1,200,000 1,400,000 1,600,000 1,800,000

2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 FFB Production Yield EBITDA (RM) FFB Yield (mt/ha)

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TH PLANTATIONS BERHAD (Company No: 12696-M)

Key takeaway 3 – Yield Improvement Programme extended

Estate Location MT/Ha Oil/Ha Mamahat Kota Marudu 28.59 6.01 Kota Bahagia Keratong 27.24 5.57 Sg Mengah Keratong 25.10 5.15 Sg Ibok Kemaman 25.00 Sg Tenegang Lahad Datu 24.53 Gedong Serian 24.49 5.38 Bukit Lawiang Kluang 24.10

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TH PLANTATIONS BERHAD (Company No: 12696-M)

1,319 1,148 FY12 FY13 CPO Production Cost (RM/MT)

• 13%

Key takeaway 4– Unit production cost to improve further

Average

248 184 FY12 FY13 Estate Production Cost (RM/MT)

• 26%

58 57 FY12 FY13 Mill Manufacturing Cost (RM/MT)

• 2%

*excl depreciation *excl depreciation *excl depreciation

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TH PLANTATIONS BERHAD (Company No: 12696-M)

Thank You

Our vision is to be an integrated and sustainable plantation player with global recognition, promising premium quality products

For further information/queries, please email aizzura@thplantations.com

TH PLANTATIONS BERHAD (Company No: 12696-M)

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TH PLANTATIONS BERHAD (Company No: 12696-M)

FFB contribution by region

33% 45% 22%

4Q2013

42% 24% 34%

4Q2012

Peninsular Sabah Sarawak Peninsular Sabah Sarawak

Higher contribution from the Sarawak region following acquisitions made in 2012

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TH PLANTATIONS BERHAD (Company No: 12696-M)

A closer look at costs

Cost of Sales 4Q13 4Q12 Variance (%) Remarks Estate Production Cost 37,760 30,416 +24% In line with higher production and better efficiencies – lower unit production cost Overhead 7,897 5,803 +36% FFB Purchases 27,142 4,855 +459% Mill Manufacturing Cost 15,802 8,507 +86% In line with higher production and new mills – lower unit processing cost Depreciation – Estates 1,943 1,497 +30% In line with major acquisitions Depreciation – Mill 3,738 2,188 +71% In line with major acquisitions Amortisation 15,047 8,201 +83% In line with major acquisitions Other Costs 4Q13 4Q12 Variance (%) Remarks Admin Expenses 4,722 6,485

• 27%

Minimal variance Other operating expenses 2,125 2,895

• 27%

Depreciation 310 480

• 35%

Zakat 278 (1,040) n.m. Current liabilities > current assets Finance Cost 6,740 4,066 +66% Higher debt due to major acquisitions

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TH PLANTATIONS BERHAD (Company No: 12696-M)

Overview of Profit & Loss (4Q)

(RM ‘000) 4Q13 4Q12 Revenue 154,549 99,106 Sales of CPO 123,353 74,851 Sales of PK 20,232 9,236 Sales of FFB 5,231 10,182 Management fees 5,642 4,837 Dividends 91

• Cost of Sales

(110,644) (72,505) Gross Profit 43,904 26,602 Other Expenses Admin expenses (4,722) (6,485) Other operating expenses (2,435) (3,374) Zakat (278) 1,040 Finance costs (6,740) (4,066) Other Income 1,073 102,580 Profit Before Tax 30,802 116,296 Tax 9,854 (17,477) Profit After Tax 40,657 98,819 EBITDA 58,581 31,488 Gross Profit before amortisation 58,951 34,802

Revenue up by 56% EBITDA up by 86% Gross profit excl amort up by 69% PBT (excl other income from 4Q12) up by 105% Gross profit up by 65% Costs up by 53% in line with acquisitions and higher production