FY2017/2018 Results Announcement Second Quarter ended 31 December 2017 22 February 2018
Financial Highlights Strong financial position in the first half of FY2018 2QFY2018 1HFY2018 in RM’mn (YoY %) 4,085 7,626 +4% +13% Revenue 2QFY17: 3,925 1HFY17: 6,744 673 1,957 +18% +118% PBIT 2QFY17: 570 1HFY17: 899 Recurring PBIT 673 1,186 Non-Recurring PBIT 1 - 771 +35% +168% 637 1,876 PBT 2QFY17: 472 1HFY17: 699 +34% +208% 429 1,448 PATAMI 2QFY17: 319 1HFY17: 470 Recurring PATAMI 429 677 - 771 Non-Recurring PATAMI 1 6.3 21.3 2 2 +34% +209% Basic EPS 2QFY17: 4.7 1HFY17: 6.9 ( RM’sen ) 1 Non-recurring refers to the gain on sale of land to SD Property of RM676mn and reversal of accrual for donation of RM95mn in 1QFY2018 2 2 Higher weighted average number of ordinary shares post-listing of Sime Darby Plantation
Borrowings & Cash Flow Lower gearing resulting from borrowings reduction initiatives and higher cash flow Gross 61% 55% 44% BORROWINGS REDUCTION Gearing 1 initiatives in 2QFY2018 Net 57% 48% 39% Gearing 2 Proceeds from the disposal of the redeemable loan stock 9,300 8,815 7,214 Borrowings (in RM’mn ) Settlement of intercompany loans via: 17% 12% 14% 19% 20% Internally generated funds o Capitalisation of intercompany loans 69% 69% 80% o As at 30 Jun 2017 As at 30 Sep 2017 As at 31 Dec 2017 in RM’mn CASH FLOW in 1HFY2018 +225% YoY Higher Net Cash Generated From Operating 1,177 362 Activities supported by greater earnings 1HFY17 1HFY18 +70% Lower Net Cash Used In Investing Activities YoY as a result of replanting and replacement capex, offset 1HFY17 1HFY18 by the sale of redeemable loan stock -190 -642 -263% Higher Net Cash Used In Financing Activities 609 YoY due to repayment of borrowings 1HFY17 1HFY18 1HFY17 1HFY18 -995 3 1 Gross Gearing is based on Total Borrowings (including intercompany loans) divided by Total Equity 2 Net Gearing is based on Total Borrowings (including intercompany loans) less Bank & Cash Balances divided by Total Equity
Financial Performance by Segment Robust Upstream contributions driven by the Malaysian and PNG/SI operations 2QFY2018 1HFY2018 PBIT in RM’mn (YoY %) 1 577 1,785 Upstream +25% +147% 2QFY17: 459 1HFY17: 722 Upstream 1 414 1,490 +127% +271% Malaysia 2QFY17: 182 1HFY17: 402 Upstream 144 261 -48% -18% Indonesia 2QFY17: 275 1HFY17: 318 Upstream 39 77 +129% +166% PNG/SI 2QFY17: 17 1HFY17: 29 Upstream -20 -43 -33% -59% Liberia 2QFY17: -15 1HFY17: -27 64 134 Downstream -41% -26% 2QFY17: 108 1HFY17: 182 32 38 Others >+100% >+100% 2QFY17: 3 1HFY17: -5 4 1 Results include the non-recurring gain on sale of land to SD Property of RM676mn and reversal of accrual for donation of RM95mn in 1QFY2018
Operational Performance – Upstream Commendable performance from Malaysia offset by weaker contribution from Indonesia i n ‘000 MT (YoY %) Overall: Higher production TOTAL MALAYSIA INDONESIA as it recovers from the El UPSTREAM +26% +25% -24% -5% P R O D U C I T O N Nino impact 3,248 1,509 1,694 935 710 1,435 +2% +12% 2,601 Malaysia: FFB production 5,457 1,342 improved as a result of 4,872 sustained efforts to improve 2,762 2,719 2QFY17 2QFY18 1HFY17 1HFY18 2QFY17 2QFY18 1HFY17 1HFY18 yield via: PNG/SI LIBERIA o Replanting -22% -1% +404% +361% F F B o Superior planting 757 746 439 342 29 material 15 Indonesia: Lower 6 3 production largely due to 2QFY17 2QFY18 1HFY17 1HFY18 2QFY17 2QFY18 1HFY17 1HFY18 2QFY172QFY18 1HFY171HFY18 floods in certain areas in Sumatra and Kalimantan, in MT/ha (YoY %) TOTAL which hindered MALAYSIA INDONESIA productivity , as harvesting UPSTREAM +25% +26% -20% +0% rounds increased 12.83 8.91 8.91 +0.6% +12% 6.59 5.52 5.27 10.15 4.41 PNG/SI: FFB production in 10.89 F F B Y I E L D 9.69 certain areas of PNG was affected by the dry period 2QFY17 2QFY18 1HFY17 1HFY18 2QFY17 2QFY18 1HFY17 1HFY18 in Jun- Sep’17 5.41 5.44 PNG/SI LIBERIA Liberia: >+100% increase -23% -3% +118% +98% in production due to: 10.07 9.76 3.12 5.84 4.47 o Increased age profile 1.61 1.57 0.74 of the planted area o Innovative water 2QFY17 2QFY18 1HFY17 1HFY18 2QFY17 2QFY18 1HFY17 1HFY18 2QFY172QFY18 1HFY171HFY18 5 management
Operational Performance – Upstream Lower overall CPO Extraction Rate (OER) mitigated by slight improvement in Indonesia CPO EXTRACTION RATE Overall: OER dropped YoY as a result of poor in % (YoY %) crop quality TOTAL MALAYSIA INDONESIA Malaysia: Lower OER UPSTREAM due to: -2% -3% +4% +2% o Reduced weevils 20.59 21.12 21.87 21.18 21.60 -1% -2% 20.7920.21 20.21 population o Rain interference 21.28 21.00 21.2920.96 o Extended harvesting intervals due to high crop 2QFY172QFY18 1HFY17 1HFY18 2QFY172QFY18 1HFY17 1HFY18 Indonesia: OER experienced a recovery PNG/SI LIBERIA post-El Nino -2% -1% -0.4% +1% 23.2422.71 22.89 22.70 PNG/SI: Heavy rainfall 21.11 21.03 20.64 20.82 in certain areas of PNG caused a decline in OER 2QFY17 2QFY18 1HFY17 1HFY18 2QFY172QFY18 1HFY17 1HFY18 2QFY172QFY18 1HFY17 1HFY18
Operational Performance – Upstream Lower average CPO price realised on the back of subdued sentiment AVERAGE CPO PRICE REALISED in RM/MT (YoY %) TOTAL MALAYSIA INDONESIA UPSTREAM -8% -5% -5% -1% -6% -2% 2,851 2,717 2,706 2,743 2,763 2,703 2,580 2,533 2,835 2,739 2,672 2,654 2QFY17 2QFY18 1HFY17 1HFY18 2QFY17 2QFY18 1HFY17 1HFY18 PNG/SI LIBERIA -9% +8% -8% -4% 2,961 2,815 2,713 2,701 2,499 2,275 2,072 2,243 1HFY17 1HFY18 2QFY17 2QFY18 2QFY17 2QFY18 1HFY17 1HFY18 2QFY17 2QFY18 1HFY17 1HFY18 7
Financial Performance – Downstream Lower profit largely due to weaker contribution from Bulk business in RM’mn (YoY %) D O W N S T R E A M Downstream PBIT -41% -26% declined due to: Weaker contribution from Bulk business 182 P B I T 108 as a result of: 134 64 o Higher negative cost of oil cycle 2QFY17 2QFY18 1HFY17 1HFY18 o Appreciation of in RM’mn (YoY %) the Ringgit impacting bulk Bulk Differentiated Trading refining margin S E G M E N T -82% -45% +32% -12% -38% -17% P B I T B Y negatively 74 73 65 56 Changes in levy 41 40 35 31 29 21 13 structure in India 10 2QFY17 2QFY18 1HFY17 1HFY18 2QFY17 2QFY18 1HFY17 1HFY18 2QFY17 2QFY18 1HFY17 1HFY18 8
Operational Performance – Downstream Continuous efforts to manage cost and improve margins Product Ratio Differentiated-to-Bulk 53% 53% product ratio improved, 59% 61% driven by higher sales of specialty products 47% 47% 41% 39% with better contribution 2QFY17 2QFY18 1HFY17 1HFY18 margins Differentiated Bulk Led to increased utilisation of our Sales Volume (‘000 MT) specialty -1% +6% refineries YoY YoY Lower processing cost 1,724 909 896 1,628 2QFY17 2QFY18 1HFY17 1HFY18 9
Sustainability SDP continues to adopt the commitments made in the RAC and HRC R S P O R E S P O N S I B L E C E R T I F I C A T I O N A G R I C U L T U R E S T A T U S C H A R T E R ( R A C ) 97% A summary of commitments made by SDP through multiple initiatives, focused on: Human rights & social RSPO-certified development As at 31 Dec 2017 The environment Corporate integrity MALAYSIA 100% H U M A N R I G H T S C H A R T E R ( H R C ) INDONESIA 96% Sime Darby launched it’s Human Rights Charter to articulate its commitment in respecting human rights in line with the United Nations Guiding Principles on PNG & SI Business and Human Rights 100% 10
Strategic Initiatives On-track to deliver value WATER REPLANTING R&D MECHANISATION MANAGEMENT Ongoing water Lower Scale up of 5 - 7% management manpower Genome Select projects in requirement oil palm Replanting Rate Malaysia, and increase plantings Indonesia and productivity (>1,000 ha Liberia to to be Recently rolled 10 yrs mitigate the planted) out in Indonesia effect of El Nino and Liberia Testing of new and La Nina Target FY2025 palm traits Average Age Micro Sprinkler Scale up of enzymatic 12.8 yrs extraction process to YTD FY2018 increase OER Water Reservoirs Average Age in mills (FY16 Average Age: 13.1 yrs) 11
Value Creation Establishment of the Execution Office to intensify value creation execution engine EXECUTION OFFICE Drive execution and de-bottleneck key initiatives Track progress on value creation initiatives Assess and monitor on weekly basis and ensure accountability across all stakeholders PROGRESS TO DATE VALUE PROGRAM REGULAR FINANCIAL CREATION RHYTHM & MANAGEMENT ALIGNMENT TARGETS PLATFORM PROCESSES GREATER CLARITY & GRANULAR ALIGNMENT ON IMPROVE TRACKING SUSTAINED WEEKLY BREAKDOWN OF BUDGETING GAPS EFFICIENCY & MEETINGS TO DRIVE TARGETS ACROSS TOWARDS FY2022 MANAGE VALUE EXECUTION WORK STREAMS CREATION PROGRESS 12
Recommend
More recommend
