Interim Performance Presentation Q1 2007 : quarter ended 31 st March - - PowerPoint PPT Presentation

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15-May-07 5:46 PM Unique id: 036458 Documentum: GARL-Pegasus-Main.ppt

Interim Performance Presentation

Q1 2007 : quarter ended 31st March 2007

15th May 2007

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SECTION 1

Executive Summary

3 SECTION 2

Financial Highlights

5 SECTION 3

Operational Highlights

11 SECTION 4

Sales Highlights

16 SECTION 5

Growth Strategy

21 SECTION 6

Key Developments

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Table of Contents

Section 1 Executive Summary

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Executive Summary

EBITDA

US$ 88mn

Average CPO Price (FOB Belawan) Net income

US$ 546/ton

Interim Dividend Equity Placement Palm Products Production

412,000 ton

43% 12% 46%

US$ 219mn

63%

S$0.02 325.3mn shares S$ 800mn

• Q1 2007 vs. Q1 2006

Section 2 Financial Highlights

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Strong revenue growth

Strong Growth in Revenue and Net Income

• Supported by higher CPO production, the

acquisition of AIAR at the end of 2005 and the upward trend in CPO price.

Notes:

• FY 2005 and Q1 2006 numbers restated for adoption of IAS 41, Biological Assets, for comparative purposes
• Starting 1 January 2006, GAR has adopted IAS 41, Biological Assets

Improving net income

65 233 471 219 135

100 200 300 400 500 2004 2005 2006 Q1'06 Q1'07

(US$ mn)

`

CAGR: 168% (’04 – ’06) 2 1 63% CAGR: 22% (’04 – ’06)

(US$ mn)

(000’ tons)

275 269 1,130 819 760

412 470 1,890 1,795 1,667 200 400 600 800 1000 1200 2004 2005 2006 Q1'06 Q1'07 100 350 600 850 1,100 1,350 1,600 1,850 Revenue Palm product production

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Revenue 268.7 275.3 2.5% Gross profit 67.6 102.7 51.9% Gross profit Margin 25.1% 37.3% 48.6% Net gain from biological assets 178.1 164.9 (7.4%) Operating income 224.9 242.2 7.7% EBITDA 61.6 88.2 43.3% Tax (56.2) (62.3) 10.9% Net profit attributable to the equity holders 134.7 219.3 62.8% EPS (in US$ cents) 6.2 10.1 62.8% Interim dividend per share (in S$)

• 0.02

n.m.

Financial Performance

Note:

• Starting 1 January 2006, GAR has adopted IAS 41, Agriculture. Q1 2006 numbers restated for adoption of IAS 41, Agriculture, for comparative

purposes.

(in US$ mn)

Q1 Q1 % 2006 1 2007 increase/(decrease)

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Revenue 184.6 203.6 10.3% 84.2 71.7 (14.7%) Gross Profit 60.0 89.9 49.7% 7.5 12.8 69.5% Gross Profit Margin 32.5% 44.1% 35.7% 8.9% 17.8% 100.0% EBITDA 55.7 76.4 37.1% 5.9 11.8 102.1% Profit Before Tax 213.7 291.3 36.3% 3.6 10.3 184.5% Net Income 131.1 209.1 59.5% 3.6 10.2 186.6%

Q1 ~ 2007 Financial Performance

(in US$ mn) Indonesia Operation China Operation Q1 2006 Q1 2007 % increase/ Q1 2006 Q1 2007 % increase/ decrease decrease

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Total Assets 2,985.4 3,303.3 10.6% Cash 130.4 62.7 (51.9%) Short Term Investment 3.7 10.3 180.3% Total Liabilities 1,064.1 1,142.5 7.4% Interest Bearing Debt 477.4 514.6 7.8% Total Equity 1,921.3 2,160.8 12.5% Debt2/Equity Ratio (x) 0.25 0.24 Net Debt/Equity Ratio (x) 0.18 0.20

Financial Position

Notes:

• Starting 1 January 2006, GAR has adopted IAS 41, Biological Assets. Q1 2006 results are restated for adoption of IAS 41, Biological Assets, for

comparative purposes.

• Interest bearing debt

(in US$ mn) FY Q1 % 2006 1 2007 increase/(decrease)

Continuous growth in total assets with a low gearing ratio

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Dividend

1.0 2.1 2.0 0.0 0.5 1.0 1.5 2.0 2.5 FY 05 FY 06 Q1 07 S$ Cents Per Share Dividend Per Share

GAR has been increasing the dividend payout to shareholders and will always evaluate the optimum utilization of its income

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1 Equivalent to US$ 0.014/share for FY 2006 dividend

Section 3 Operational Highlights

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Planted Area 306,851 293,145 338,185 15.4% Nucleus 226,185 213,365 257,507 20.7% Plasma 80,666 79,780 80,678 1.1% Mature Area 271,140 275,436 292,609 6.2% Nucleus 192,903 197,213 213,828 8.4% Plasma 78,237 78,223 78,781 0.7% Land Bank 200,000 120,000 1,300,0001 983.3%

Operational Performance ~ Area

Note:

• Include land acquisition in progress of approximately 1,100,000ha (plantable area) located in Kalimantan (100,000ha) and Papua (1,000,000ha)

(in ha) 31 Dec Q1 Q1 Q1’06 – Q1’07 2006 2006 2007 %increase/(decrease)

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Operational Performance ~ Production

(000’Tons) (Ton/Ha)

Drought condition due to El Nino effect caused a decrease in productivity during Q1 2007 In April’07, the production started to recover, hence higher production is expected in the following quarters.

3,769 4,191 4,275 4,377 1,068 1,043 1,203 1,463 1,595 1,624 394 337 1,000 2,000 3,000 4,000 5,000 6,000 7,000 2003 2004 2005 2006 Q1'06 Q1'07 FFB Production ~ Nucleus FFB Production ~ Plasma (000’Tons)

FFB Production Palm Products Production

1,176 257 337 386 1,479 1,367 1,553 75 84 337 315 299 5.31 4.72 22.13 21.43 20.23 18.37

• 250

500 750 1,000 1,250 1,500 1,750 2,000 2003 2004 2005 2006 Q1'06 Q1'07

• 4

8 12 16 20 24 CPO (Ton) PK (Ton) FFB Yield (Ton/Ha)

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1,225 1,392 1,554 1,624 1,348 1,380 1,567 1,462 1,699

• 200

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

Q1 2005 Q2 2005 Q3 2005 Q4 2005 Q1 2006 Q2 2006 Q3 2006 Q4 2006 Q1 2007

Historical FFB Production Trend

Normal condition Drought condition In Thousand Ton

Historically, FFB production increased in the 2nd half. However, drought condition in 2nd half 2006 affected the normal yield curve. Improving weather condition in 2007 expected to restore normal yield curve in subsequent quarters.

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FFB Production (tons) 1,461,752 1,380,077 (5.6%) FFB Yield (ton/ha) 5.3 4.7 (11.1%) Extraction Rate OER 23.60% 23.62% KER 5.11% 5.24% Palm Products Production (tons) 470,042 411,727 (12.4%) CPO (tons) 386,382 336,955 (12.8%) PK (tons) 83,660 74,772 (10.6%) Utilization Rate Indonesia Refinery 77.4% 69.2% China Refinery 57.7% 58.7% China Crushing 82.0% 54.0% Soybean Processed (tons) Soybean Oil (tons) 37,006 24,534 (33.7%) Soybean Meal (tons) 166,023 110,135 (33.7%)

Operational Performance ~ Production

Q1 Q1 % 2006 2007 increase/ (decrease)

Section 4 Sales Highlights

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Business Performance

Indonesia Operation ~ By Products Revenue contribution China Operation ~ By Products

China Local 26% Indonesia Local 40% Indonesia Export 34% Unbranded palm products 35% Branded products 11% PK 3% CPO 51% Others 1% Soybean meal 40% Branded products 9% Unbranded palm products 15% Soybean oil 35% PK 2% Branded products 11% Soybean

• il

9% Others 1% Unbranded palm product 30% Soybean meal 10% CPO 37%

Revenue contribution ~ By Products

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Indonesia Operation CPO 247,000 225,000 (8.7%) PK 37,000 23,000 (38.1%) Refined Products 217,000 206,000 (5.1%) Branded Cooking Oil 21,000 18,000 (14.4%) Margarine 11,000 13,000 15.5% Unbranded 176,000 160,000 (9.1%) China Operation Branded Cooking Oil 10,000 7,000 (30.0%) Unbranded: Soybean Oil 44,000 30,000 (31.8%) Soybean Meal 172,000 106,000 (38.4%) Palm oil based 9,000 15,000 66.7%

Sales Volume

Q1 Q1 % 2006 2007 increase/ (decrease)

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$100 $200 $300 $400 $500 $600 $700 $800 $900 Jan- 06 Feb- 06 Mar- 06 Apr- 06 May- 06 Jun- 06 Jul- 06 Aug- 06 Sep- 06 Oct- 06 Nov- 06 Dec- 06 Jan- 07 Feb- 07 Mar- 07 Apr- 07 May- 07 CPO (CIF Rotterdam) Soybean Oil (Dutch, FOB ex mill)

CPO Price Trend

Sources : Oil World & Reuters

China lifted quota import on palm oil El-Nino effect reduce production India’s CPO import tax reduced New demand from bio-diesel US$/Ton

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Bio-diesel Capacity

Local market is heated in 1-2 years

New capacity in 2007 is at 1.6 million ton

Company Plant location Size (tonnes) Completion date Company Comment Size (tonnes) Completion date

Lipid Tech Sdn. Bhd Port Klang, Selangor 12,000 Jun 2008 Darmex Oil 200,000 n.a Golden Hope Banting, Selangor 35,000 Completed Sumi Asih Group 2,000 tonslyr and increase gradually 200,000 2009 Carotech Chemor, Perak 48,000 n.a. Sari Dumai Sejati Part of larger company 100,000 na Caratino (JV with MPOB) Pasir Gudang, Johor 60,000 Completed Indo Bio Fuels Focus on biodiesel conversion tech. 100,000 n.a Golden Hope (JV with MPOB) Carey Island, Selangor 60,000 1H2007 Asianagro Part of Raja Garuda Mas. 150,000 na Golden Hope Pasir Gudang, Johor 60,000 2007 Molindo Raya Ind'IIPT PNX Increase from current 30,000 to 40,000T 40,000 2007 IJM Plantations Sandakan, Sabah 90,000 Q4 2007 Eterindo Wahanatama Producing 22,000 T, supply to Pertamina 200,000 2008/2009 PPB Group Pasir Gudang, Johor 100,000 early 2007 PT Mopoli 1 of 4 plants to start in 2007 (Apindo) 150,000 2007 SPC Biodiesel Lahad Datu, Sabah 100,000 end-2007 Sinar Mas Citic 1 of 4 plants to start in 2007 (Apindo) 100,000 2007 Mission Biotechnologies Kuantan, Pahang 100,000 July 2007 PT Musimas 1 of 4 plants to start in 2007 (Apindo) 100,000 2007 Global Bonanza Sdn Bhd Kuching, Sarawak 100,000 June 2007 PT Sumiasih 1 of 4 plants to start in 2007 (Apindo) 60,000 2007 GS Palm Sdn Bhd Masai, Johor 100,000 Q3 2007 Energi Alternative Indonesia 300 Producing Achi Jaya Plantations Segamat, Johor 100,000 end-2007 PT Rekayasa and Pertamina 5,000 2006 Pacific Bio-Energy Sdn Bhd Lahad Datu, Sabah 100,000 n.a. Astra Agra Trial stage for in-house use 5,000 2007 Kulim (jv with Cremer) Pasir Gudang, Johor 100,000 2007 Wahana Abadi Tirta A clean water management company 30,000 n.a Kulim (jv with Cremer) Singapore 100,000 2007 Anugerah Inti Gemanusa 50,000 na Empee Industries Bhd Kuantan, Pahang 100,000 n.a. Artha Trans Jaya 1,200 na TSH Resources Sabah 100,000 n.a. Wilmar Bioenergi 150,000 T in 2007 250,000 2008 Zurex Lahad Datu, Sabah 200,000 Q1 2008 Makindo related Potential for litigation 100,000 na Himpunan Sari Sdn. Bhd Kemamam, Terengganu 200,000 June 2007 Government projects 4x6,000 tons and 4x3,000 tons 36,000 n.a Total Malaysia 1,865,000 Total Indonesia 1,877,500

Diesel Diesel (mn tonnes) Consumed for Transportation B5 B10 Malaysia 8.7 4.6 0.4 0.9 Indonesia 30.4 8.0 1.5 3.0 Total 39.1 12.6 1.9 3.9

Section 5 Growth Strategy

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Growth Strategy

Commitment to sound business strategies and continuous operational excellence will enable GAR to sustain growth and profitability

Food Industrial Bio-Fuel Strong Plantation Foundation Largest in the world with 338,000 ha planted Continued Growth and Profitability Future expansion of 1.3 mn ha land bank

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Q1 2007 Growth Achievements and Targets

Plantation Target planted area of 40,000 ha for FY 2007 Achieved additional planted area of 31,000 ha during Q1 07

• 3,000 ha of new planting
• 28,000 ha of acquired plantation

Downstream Completed new speciality fat factory in Ningbo, China with capacity of 44,000 ton/year Completed conversion of Surabaya and Medan refineries energy source from diesel to coal in April 07 New refinery in Tarjun, South Kalimantan with capacity of 300,000ton/year under construction New Cocoa Butter Substitute facility in Belawan, Indonesia with capacity of 30,000 ton/year under construction Bio-diesel Signed a MOU with CNOOC and HK Energy to develop bio-diesel and bio-ethanol. Expected investment of US$ 5.5bn over 8 years. On May 3, 2007, signed a JV agreement with Fulcrum Biofuels LLC to establish a bio-diesel plant in Dumai, Indonesia with USA as a market

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Bio-diesel JV ~ Transaction Highlights

Parties : Blue Sky Golden Fulcrum Ltd (wholly owned subsidiary of GAR) ~ (50%) Fulcrum Biofuels LLC ~ (50%) Purpose : To initially build and operate a bio-diesel plant in Dumai, Sumatra, Indonesia and market the bio-diesel in the US market Capacity : 400,000MT per annum, expected to be fully operation in 2008 Cost : US$ 60m, include working capital

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GAR Fulcrum JV Co. Biodiesel plant at Dumai End Customers California, USA

50% 50%

Partnership to enter into growing US bio-diesel market Strong synergies between GAR’s CPO supply advantage and Fulcrum’s Logistics and

Marketing expertise

The JV will be entitled to the tax credit of approx. US$ 300/ton

Bio-diesel JV Structure

• 200,000 tons p.a. first 3

yrs, then 100,000 tons p.a. on year 4-5 at US$ 585/ton

• Additional 200,000 ton

p.a. at floating price

• Logistics & marketing
• Hedging & Risk

management

• Guaranteed EBITDA/ton
• f US$ 75/ton for

200,000 ton p.a. for min. 3 years

Section 6 Key Developments

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Equity Placement ~ Transaction Highlights

Deal type : Placement of new shares (Reg S only) Placement price : S$ 2.4588 (7.22% discount to the closing price on 19th April 2007) Size of the deal : 325,300,000 new shares (representing 15% of pre-placement share capital) S$ 800m or equivalent to US$ 530mn Use of proceeds : To finance GAR’s capital expenditure and general corporate purposes Total institutional accounts : > 80 Placement date : 19th April 2007 Joint Bookrunner & : BNP Paribas (Singapore) Ltd, CIMB-GK Securities Pte. Ltd. Placement Agent and Oversea-Chinese Banking Corporation Limited

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Equity Placement ~ Demand Analysis

Demand by investor type Demand by geography

Book of demand comprised mainly institutional investors with Long Funds dominating with

63% contribution

Private banking demand was mainly discretionarily managed portfolios Europe and UK investors represented 63% buyers

Private bank 13% Hedge fund 21% Bank 3% Long fund 63% USA 5% Others 3% Singapore 28% HK 1% UK 25% Europe 38%

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Contact Us

Golden Agri-Resources Ltd c/o 3 Shenton Way #17-03 Shenton House Singapore 068805 Telephone : +65 62207720 Facsimile : +65 62207020 Contact Person : Rafael B. Concepcion, Jr. (rafaelc@goldenagri.com.sg) Suwandy Chen (swd@goldenagri.com.sg)

If you need further information, please contact: