New Britain Palm Oil Ltd 2012 August 2012 Interim Results to 30 - - PowerPoint PPT Presentation

New Britain Palm Oil Ltd

2012

1

Interim Results

to 30 June 2012

August 2012

2

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

3

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

Six months ended 30 June

2012 2011

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

4

Bridge From 2011 to 2012 Interim Period

• Note. Management preparation of indicative overview of variance only, not related to statutory results

30 ¡ 50 ¡ 70 ¡ 90 ¡ 110 ¡ 130 ¡ 150 ¡ 170 ¡ 2011 ¡interim ¡ CPO ¡vol ¡ FX ¡impact ¡on ¡PGK ¡cost ¡ PKO ¡prices ¡ Sugar ¡CoS ¡ Disposal ¡of ¡JV ¡interest ¡ FX ¡gains ¡ CPO ¡prices ¡ Refined ¡oils ¡prices ¡ Freight ¡costs ¡ Other ¡palm ¡prod. ¡costs ¡ PK ¡prices ¡ PKO ¡vol ¡ FerIliser ¡costs ¡ Refined ¡oils ¡vol ¡ Net ¡finance ¡costs ¡ PK ¡vol ¡ CaKle ¡ Liverpool ¡ Seeds ¡ Sugar ¡sales ¡ FFB ¡purchases ¡ 2012 ¡interim ¡ 170 150 130 110 90 70 50 30

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 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 FX appreciation of the PGK increased local USD costs PKO prices dropped $620 / tonne year on year $8.9m one-off contribution from sale of PT Dami Mas in 2011 FFB purchases from smallholders at lower prices, delivered additional $12.6m Seeds delivered 2.2m higher year-on-year sales 2010 interim

PBT $’000s

5

Location

• c.78,000 hectares of managed
• il palm plantations
• An additional c.42,000 hectares

cultivated by smallholders

PAPUA NEW GUINEA NEW BRITAIN NEW IRELAND SOLOMON ISLANDS AUSTRALIA

• Kimbe

Main area of NBPOL operation 36,095 hectares oil palm Lae• RAIL

• acquired in Oct 2008

11,000 hectares oil palm 7,731 hectares sugar cane 8,888 hectares pasture

• KPOL, Milne Bay
• acquired in April 2010

10,905 hectares oil palm

• KPOL, Higaturu
• acquired in April 2010

7,885 hectares oil palm

• GPPOL
• acquired in April 2005

6,174 hectares oil palm KPOL, Poliamba

• acquired in April 2010

5,459 hectares oil palm

• New Britain Oils

Commissioned in March 2010, the fjrst fully segregated and traceable sustainable palm oil refjnery in the UK, new bakery fats plant now operational Orangerie Bay Plantations

• aquired in July 2012

c.5,351 hectares to be planted with oil palm

6

Balance Sheet

50 100 150 200 250 300 Short term working capital facilities RAIL Long term facility - non-amortising Long term facility - amortising

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

$m

Current Debt Position

US$ 303.4m

7

Performance

NBPOL share price, CPO, PKO

1200 1000 800 600 400 200 3000 2,500 2,000 1,500 1,000 500 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

CPO CIF Rdm (US$/MT) PKO CIF Rdm (US$/MT) NBPOL share price (GBp) CPO / PKO $ / MT NBPOL share price (GBp)

8

Global Edible Vegetable Oil Market

14 13 12 11 10 9 8 7 6

1989/1990 1990/1991 1991/1992 1992/1993 1993/1994 1994/1995 1995/1996 1996/1997 1997/1998 1998/1999 1999/2000 2000/2001 2001/2002 2002/2003 2003/2004 2004/2005 2005/2006 2006/2007 2007/2008 2008/2009 2009/2010 2010/2011 2011/2012

Edible Oils - World Stocks:Usage Ratio (%)

Source: USDA

• Edible oils stocks:usage ratio continues to fall...
• ...soy oil, palm oil spread relatively wide (c.$200, up from c.$10 in April 2012)

%

2012/2013

9

Historical Operational Indicators

Growth in Group Fresh Fruit Bunch (FFB) volume Growth in Palm Oil Produced Tonnes Growth in Oil Palm Plantations

30,000 35,000 15,000 20,000 25,000 2004 2006 Hectares 2005 2007 10,000 5,000 40,000 45,000 2008 55,000 60,000 50,000 65,000 70,000 2009 2010 CAGR:17.5% 75,000 2011 80,000 85,000 Tonnes FFB 2004 2006 2005 2007 2008 2009 2010 2011 2004 2006 2005 2008 2007 2009 2010 2011 200,000 240,000 80,000 120,000 160,000 40,000 280,000 320,000 360,000 400,000 440,000

CAGR: 16.3%

480,000 520,000 560,000 600,000 1,400,000 1,500,000 1,100,000 1,200,000 1,300,000 1,000,000 1,600,000 800,000 1,800,000 2,000,000

C A G R : 1 5 . %

1,900,000 1,700,000 900,000 2,100,000 2,200,000 2,300,000 2,400,000 2,500,000

10

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

Source: USDA

Crop composition of land used globally to produce vegetable oils Composition of global vegetable oil production

Soya Sunseed Rape Palm

37% 16% 11% 36% 62% 17% 15% 6%

NBPOL Example Customers

• Ferrero
• Jordans
• Wilmar
• United Biscuits
• c.90% of NBPOL’s output is sold into the EU in

US$ contracts

Globally achieved Oil yield (tonnes / Ha) 0.5 1.0 1.5 2.0 2.5 3.0 3.5 4.0 4.5 Palm Oil (World Average) Rape Sun Soya

Source: USDA/NBPOL

5.0 5.5 6.0 Palm Oil (NBPOL) 6.5 Indicative oil yields

11

NBPOL Today

Revenue contribution Plantations

• Land bank c.134,500 ha
• 77,518 hectares under NBPOL cultivation

with respect to oil palm

• More than 42,000 mature hectares cultivated

by smallholders supplying NBPOL Milling and Refjning

• 12 oil mills in Group
• 2 refjneries
• Special fractionation plant completed for

Ferrero

• World’s fjrst dedicated sustainable bakery

ingredients and food service packing

• peration in UK

Infrastructure

• c.80,000 tonnes / oil storage capacity
• Trucking transport fmeet
• Housing
• Two new methane capture facilities

completed

• Export terminals
• Highly respected plant breeding

research and development

• Important for success of wider

business

• Growing customer base around the

world

• NBPOL is one of the world’s largest

private seed producers

• 9,282 hectares of cattle grazing land
• Integrated with the palm oil plantation
• Important for the protein constrained

local community

• >22,000 head of cattle

RAIL

• 1 sugar mill
• 1 ethanol plant
• 7,731 hectares sugar cane

Palm Oil Sales Seed Sales Cattle Production Sugar sales

12

New Britain Oils

• Complete and operational
• Running ahead of internal

utilisation targets

• World’s fjrst dedicated

sustainable bakery foodstuffs production facility now open

• Key contracts with well known

UK and EU brands

• New deodoriser on schedule

for end June 2013 - to double capacity

• Captures greater margin share

for NBPOL

• First palm oil refjnery in the EU

to have a fully segregated and sustainable supply chain

• The fjrst palm oil provider able

to guarantee fully traceable, sustainable palm oil direct from the plantation to the EU consumer

Bulk Customers Packed Customers

• No. of Customers

Liverpool Refjnery Capacity Utilisation

100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% 50 45 40 35 30 25 20 15 10 5

May’10 Jul Jul May Mar Sep Sep Nov Nov Jan’11 Jan’12 Jul May Mar May’10 Jul Jul May Mar Sep Sep Nov Nov Jan’11 Jan’12 Jul May Mar

13

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

14

Outlook

• 138,000 tonnes CPO sold into remainder of 2012 at $1,084 / tonne
• Following improved weather conditions, expectation to see return to more normalised FFB collection:
• although extraction rates are likely to remain lower than normal for the remainder of 2012
• Expecting to return to more normalised production and extraction in 2013
• Embarking on cost saving initiatives to address impact of stronger currency on margins
• Expecting easing of key operational costs (freight, fertiliser, and fuel)
• New kernel crushing plants will increase oil volume
• These initiatives aim to reduce unit cash cost of production and improve margins
• Continue to source attractively priced assets

15

Sustainability

• All long standing NBPOL estates and supply chain certifjed as fully sustainable and traceable
• Firm commitment to have all new units and supply chains certifjed as fully sustainable and traceable by the end
• f 2012
• NBPOL has been instrumental in developing the Roundtable on Sustainable Palm Oil (www.RSPO.org)
• The RSPO has over 300 members including WWF, the Zoological Society of London and Oxfam
• NBPOL has control over its harvesting, milling, transportation, shipping and now refjning, it can trace individual

shipments back to source

• With the UK refjnery it has a unique fully sustainable and traceable supply chain to the EU

16

• The information contained in this document is for information only. No representations or warranties, express or implied,

are given by the Company or any person connected with the Company as to the fairness, accuracy or completeness of the information or opinions contained in this document, any presentation made in conjunction herewith or the accompanying materials and no liability is accepted in respect thereof, to the extent permitted by law.

• To the fullest extent permitted by law, none of the Company, Akur or any other party or any of their respective subsidiary

undertakings or affjliates or any of such person’s offjcers or employees, advisors or other representatives, accepts any liability whatsoever (whether in negligence or otherwise) arising directly or indirectly from the use of this document.

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• This document has been prepared for information purposes only and should not be relied upon, or form the basis for any

decision or action, by any person.

• This document contains forward-looking statements that involve substantial risks and uncertainties and actual results and

development may differ materially from those expressed or implied by these statements by a variety of factors.

• By accepting this document and attending the presentation you agree to be bound by the foregoing limitations.

August 2012

Disclaimer

www.nbpol.com.pg

Phone: +44 (0)20 7472 5936

New Britain Palm Oil Ltd

2012