New Britain Palm Oil Ltd 2012
August 2012 Interim Results to 30 June 2012 1
Introduction Challenging Period • Profjtability compared to previous period impacted by coinciding events: • - high rainfall leading to issues collecting fruit - higher water content and therefore lower extraction rates - appreciation of local currency - reduction in global crude palm oil / palm kernel oil prices - delay in sugar harvesting Previous period (6 months to June 2011) was exceptional for the Group • Group’s capital structure remains stable, with conservative, and long term borrowings • Interim dividend remains unchanged at USD ¢ 15 / share • Continued key capex programme • Cost optimisation and effjciency review underway • 2
Interim Results Six months ended 30 June 2012 2011 FFB processed (tonnes) 1,223,179 1,295,230 CPO / PKO produced (tonnes) 291,728 318,166 Average CPO price achieved ($ / tonne) $1,100 $1,122 Average PKO price achieved ($ / tonne) $1,476 $2,096 2012 2011 Six months ended 30 June Revenue ($m) 366.1 403.9 Profjt before tax* ($m) 63.6 158.7 Earnings per share* (US ¢) 29.5 77.8 *Excluding IAS 41 3
Bridge From 2011 to 2012 Interim Period 170 ¡ 170 Essentially a fjxed cost business, reduction in CPO volume due to weather and collection issues, had the biggest impact on PBT – responsible for 34% of the reduction of PBT from 2012 to 2011 150 ¡ 150 FX appreciation of the PGK increased local USD costs 130 ¡ 130 PKO prices dropped $620 / tonne year on year FFB purchases from 110 110 ¡ smallholders at lower prices, PBT delivered additional $12.6m $8.9m one-off contribution from sale of PT Dami Mas in 2011 $’000s 90 90 ¡ Seeds delivered 2.2m higher year-on-year sales 70 ¡ 70 50 50 ¡ 30 30 ¡ CPO ¡vol ¡ PKO ¡prices ¡ Sugar ¡CoS ¡ FX ¡gains ¡ Freight ¡costs ¡ Other ¡palm ¡prod. ¡costs ¡ PK ¡prices ¡ PKO ¡vol ¡ FerIliser ¡costs ¡ Net ¡finance ¡costs ¡ PK ¡vol ¡ CaKle ¡ Seeds ¡ Sugar ¡sales ¡ FFB ¡purchases ¡ 2011 ¡interim ¡ FX ¡impact ¡on ¡PGK ¡cost ¡ Disposal ¡of ¡JV ¡interest ¡ CPO ¡prices ¡ Refined ¡oils ¡prices ¡ Refined ¡oils ¡vol ¡ Liverpool ¡ 2012 ¡interim ¡ 2010 interim 2011 interim CPO vol FX impact on PGK cost PKO prices Sugar CoS Disposal of JV interest FX gains CPO prices Refjned oils prices Freight costs Other palm prod. costs PK prices PKO vol Fertiliser costs Refjned oils vol Net fjnance costs PK vol Cattle Liverpool Seeds Sugar sales FFB purchases 2012 interim Note. Management preparation of indicative overview of variance only, not related to statutory results 4
Location New Britain Oils Commissioned in March 2010, the fjrst fully segregated and • traceable sustainable palm oil refjnery in the NEW IRELAND UK, new bakery fats KPOL, Poliamba plant now operational - acquired in April 2010 5,459 hectares oil palm • • Kimbe GPPOL PAPUA NEW GUINEA - acquired in April 2005 Lae • 6,174 hectares oil palm NEW BRITAIN Main area of NBPOL operation 36,095 hectares oil palm • SOLOMON RAIL - acquired in Oct 2008 ISLANDS • 11,000 hectares oil palm c.78,000 hectares of managed 7,731 hectares sugar cane • 8,888 hectares pasture oil palm plantations KPOL, Higaturu KPOL, Milne Bay An additional c.42,000 hectares • - acquired in April 2010 - acquired in April 2010 cultivated by smallholders 7,885 hectares oil palm 10,905 hectares oil palm Orangerie Bay Plantations - aquired in July 2012 c.5,351 hectares to be planted with oil palm AUSTRALIA 5
Balance Sheet Current Debt Position US$ 303.4m 300 250 200 150 $m 100 50 0 Long term facility - Long term facility - Short term working RAIL amortising non-amortising capital facilities US$m 2012 cash position at 30 June 23 2011 EBITDA (full year) 337 2012 EBITDA to 30 June 100 EBITDA trailing 12 months (to 30 June 2012) 249 2011 - net debt / EBITDA 0.54x Trailing 12 month-full year net debt / EBITDA 1.3x 6
Performance NBPOL share price, CPO, PKO 3000 1200 CPO CIF Rdm (US$/MT) PKO CIF Rdm (US$/MT) 2,500 1000 NBPOL share price (GBp) 2,000 800 NBPOL share price (GBp) CPO / PKO $ / MT 1,500 600 1,000 400 500 200 0 0 J-06 A-06 J-06 O-06 J-07 A-07 J-07 O-07 J-08 A-08 J-08 O-08 J-09 A-09 J-09 O-09 J-10 A-10 J-10 O-10 J-11 A-11 J-11 O-11 J-12 A-12 J-12 O-12 7
8 % Global Edible Vegetable Oil Market 10 11 12 13 14 6 7 8 9 1989/1990 1990/1991 1991/1992 • • ...soy oil, palm oil spread relatively wide (c.$200, up from c.$10 in April 2012) Edible oils stocks : usage ratio continues to fall... 1992/1993 1993/1994 1994/1995 1995/1996 1996/1997 1997/1998 1998/1999 1999/2000 2000/2001 2001/2002 2002/2003 Edible Oils - World Stocks : Usage Ratio (%) 2003/2004 2004/2005 2005/2006 2006/2007 2007/2008 2008/2009 2009/2010 2010/2011 2011/2012 Source: USDA 2012/2013
Historical Operational Indicators Growth in Group Fresh Fruit Bunch (FFB) volume 2,500,000 2,400,000 2,300,000 Growth in Oil Palm Plantations 2,200,000 85,000 2,100,000 2,000,000 80,000 1,900,000 Tonnes FFB % 75,000 1,800,000 0 . 5 1 1,700,000 : R 70,000 G A 1,600,000 C 1,500,000 65,000 1,400,000 60,000 CAGR:17.5% 1,300,000 1,200,000 55,000 1,100,000 1,000,000 50,000 900,000 Hectares 45,000 800,000 2004 2005 2006 2007 2008 2009 2010 2011 40,000 Growth in Palm Oil Produced 600,000 35,000 560,000 30,000 520,000 25,000 480,000 CAGR: 16.3% 440,000 20,000 400,000 15,000 360,000 Tonnes 10,000 320,000 280,000 5,000 240,000 0 2004 2005 2006 2007 2008 2009 2010 2011 200,000 160,000 120,000 80,000 40,000 0 2004 2005 2006 2007 2008 2009 2010 2011 9
Palm Oil • A vegetable oil used extensively in Asian and EU food markets and personal healthcare products • The most productive vegetable oil • High barriers to entry: signifjcant capex requirement and logistic support plus 3 - 4 years for a new plantation to yield fruit • High competition for suitable land Indicative oil yields Palm Oil (NBPOL) NBPOL Example Customers Palm Oil (World Average) • Ferrero Rape • Jordans • Wilmar Sun • United Biscuits Soya Source: USDA/NBPOL • c.90% of NBPOL’s output is sold into the EU in 0 0.5 1.0 1.5 2.0 2.5 3.0 3.5 4.0 4.5 5.0 5.5 6.0 6.5 US$ contracts Globally achieved Oil yield (tonnes / Ha) Crop composition of land used globally Composition of global to produce vegetable oils vegetable oil production 6% 15% Palm 36% 37% Rape 62% 17% Sunseed 11% Soya 16% Source: USDA 10
NBPOL Today • Highly respected plant breeding Plantations research and development • Land bank c.134,500 ha • Important for success of wider • 77,518 hectares under NBPOL cultivation business with respect to oil palm • Growing customer base around the • More than 42,000 mature hectares cultivated Revenue contribution world by smallholders supplying NBPOL • NBPOL is one of the world’s largest Palm Oil Sales private seed producers Milling and Refjning Seed Sales • 12 oil mills in Group Sugar sales • 2 refjneries • 9,282 hectares of cattle grazing land Cattle Production • Special fractionation plant completed for • Integrated with the palm oil plantation Ferrero • Important for the protein constrained • World’s fjrst dedicated sustainable bakery local community ingredients and food service packing • >22,000 head of cattle operation in UK Infrastructure • c.80,000 tonnes / oil storage capacity RAIL • Trucking transport fmeet • 1 sugar mill • Housing • 1 ethanol plant • Two new methane capture facilities • 7,731 hectares sugar cane completed • Export terminals 11
New Britain Oils Complete and operational • Running ahead of internal • Liverpool Refjnery Capacity Utilisation No. of Customers utilisation targets 100% 50 World’s fjrst dedicated • Bulk Customers Packed Customers sustainable bakery foodstuffs 90% 45 production facility now open 80% 40 Key contracts with well known • UK and EU brands 70% 35 New deodoriser on schedule • 60% 30 for end June 2013 - to double capacity 50% 25 Captures greater margin share • 40% 20 for NBPOL 30% 15 First palm oil refjnery in the EU • to have a fully segregated and 20% 10 sustainable supply chain 10% 5 The fjrst palm oil provider able • 0% 0 to guarantee fully traceable, May’10 Jul Sep Nov Jan’11 Mar May Jul Sep Nov Jan’12 Mar May Jul May’10 Jul Sep Nov Jan’11 Mar May Jul Sep Nov Jan’12 Mar May Jul sustainable palm oil direct from the plantation to the EU consumer 12
Corporate Events NBPOL’s fjrst LTIP was approved by shareholders in May 2012 • - Setting performance criteria for management and key staff Acquisition of remaining 20% of KPOL by issuance of new NBPOL shares in April 2012 • Acquisition of Orangerie Bay Plantation Limited for $4.4m in cash in July 2012, giving NBPOL potentially up to c.11,000 • hectares of new land for oil palm planting 13
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