Corporate Profile. 11 January 2018

Transcription

1 Corporate Profile 11 January 2018

2 Introduction to Kim Loong Resources Berhad ( KLR ) Group KLR s holding company, Sharikat Kim Loong Sendirian Berhad, had its beginning back in 1967 with a 1,000 acre rubber plantation in Ulu Tiram, Johor KLR is listed on the Main Market of Bursa Malaysia Securities Berhad since year 2000 and currently with a RM1,372 million market capitalisation KLR is primarily involved in oil palm cultivation and related businesses which include the following: More than 15,000 Ha of oil palm plantations in Sabah, Sarawak and Johor (excluding 2,000 Ha of plantable NCR land and State land to be secured and developed) 3 palm oil mills located in Johor and Sabah with a total processing capacity of 250MT of FFB per hour 2

3 Group Structure (Active Companies Only) AS AT 31 JANUARY 2017 KIM LOONG RESOURCES BERHAD 100% Okidville Holdings 100% Kim Loong Palm Oil 100% Kim Loong Sabah Mills 100% Kim Loong Technologies 90% Winsome Yields 70% Desa Kim Loong Palm Oil 70% Kim Loong KPD Plantations 70% Palm Nutraceuticals 100% Kim Loong Power 100% Kim Loong Corporation 100% Winsome Plantations 51% Desa Okidville 100% Kim Loong Palm Oil Mills 68% Winsome Al-Yatama 100% Kim Loong Technologies (Sabah) 60% Winsome Pelita (Pantu) 70% Winsome Pelita (Kranggas) 98% Sungkit Enterprise 75% Kim Loong Biomass 3

4 Principal activities Business Activities Plantation operations Milling operations Oil Palm FFB Crude palm oil Palm kernel Biomass, bio-fertilizer, solvent extracted palm oil, power generation Palm kernel oil Palm Kernel expeller 4

5 Corporate Proposals (I) Proposed Share Split (II) Proposed Bonus Issue of Warrants As at 22 December 2017, the Company announces to undertake the following: (i) proposed share split involving the subdivision of every 1 existing ordinary share in KLRB ( KLRB Share(s) ) into 3 KLRB Shares ( Subdivided Share(s) ), held on an entitlement date to be determined later ( Proposed Share Split ); and (ii) proposed bonus issue of up to 46,770,535 free warrants in KLRB ( Warrant(s) ) on the basis of 1 Warrant for every 20 Subdivided Shares held after the Proposed Share Split ( Proposed Bonus Issue of Warrants ). The Proposals are expected to be completed by the 2 nd quarter of

6 Financial Highlights FINANCIAL PERFORMANCE Q2018* Revenue (RM'000) 757, , ,527 EBITDA (RM'000) 137, , ,242 Profit before tax (RM'000) 107, , ,809 Weighted Average No. of Share ('000) 311, , ,202 Shareholders' equity (RM'000) 579, , ,068 Basic earnings per share (Sen) PE Ratio (times) Return on Capital Em ployed (Pre-tax) [N1] Return on Total Equity (Pre-tax) Return on Total Assets (Pre-tax) Financial year N/A 15.4% 15.7% 17.5% 16.4% 16.5% 18.2% 13.4% 13.1% 14.1% Gearing N1 : Capital Employed includes Total Equity and Bank Borrowings. * Based on unaudited 9-months results ended 31 October

7 Financial Highlights (continued) ANALYSIS BY SEGMENTS REV ENUE 2016 RM'000 Financial Year 2017 RM'000 3Q2018* RM'000 Plantation 124, , ,822 Palm Oil Milling 738, , ,465 Less : Inter-segment eliminations (105,811) (119,437) (120,760) TOTAL GROUP 757, , ,527 RESULTS Plantation 46,894 65,970 83,935 Palm Oil Milling 57,261 43,776 39, , , ,685 Inter-segment adjustments and eliminations (41) (1,094) 576 Unallocated cost ** (4,211) (4,909) (1,535) Finance income 8,724 8,894 7,169 Finance cost (1,048) (1,472) (1,086) Other investment income Profit before tax 107, , ,809 * Based on unaudited 9-months results ended 31 October ** Unallocated cost mainly consists of salaries and other office administration cost net of management fee and commission income receivable. 7

8 Financial Highlights (continued) DIVIDEND PAYMENT RECORD Financial Year Q2018* Net profit attributable to equity holders of the Company (RM'000) 73,783 71,118 79,764 Net dividend declared (RM'000) 71,583 62,241 **46,680 Gross Dividend Per Share (sen) Gross Dividend Yield (%) 7.6% 5.8% 3.24% Dividend Pay- out (%) 97.0% 87.5% 58.5% Market Price at period end (RM) NTA per share (RM) * Based on unaudited 9-months results ended 31 October ** Including Special single tier dividend of 6 sen in respect of the financial year 2018 payable on 7 February

9 Plantation Operations : LOCATION OF OPERATIONS Oil palm estate(1,996 Ha), Telupid Oil palm estates (7,191 Ha) Keningau Sandakan PENINSULAR MALAYSIA SABAH Oil palm estate (1,133 Ha) Kota Tinggi, Johor SARAWAK Pasir Gudang Oil palm estates Sg.Tenggang/Kranggas -Gross land area 10,471Ha -Estimated development area: NCR land: 2,894 Ha; State land: 1,726 Ha. Oil palm estate(2,731 Ha), Sandakan 9

10 AGE PROFILE OF PALMS (AS AT 31 October 2017) 6% 5% 13% 48% < 3 years 3-6 years 7-15 years years > 20 years 28% a) < 3 years (Immature) : 5% b) 3 6 years (Young mature) : 13% c) 7 15 year (Prime mature) : 28% d) years (Old mature) : 48% e) > 20 years (Pre-replanting) : 6% 10

11 PRODUCTION FINANCIAL YEAR Q17 3Q18 Q to Q (MT) (MT) (MT) % change FFB 251, , , CPO 250, , , PK 56,689 42,772 52,

12 FFB PRODUCTION & PROJECTION 350, , , , , , , , , ,000 MT 200, , ,000 50,000 FFB (MT) Q FINANCIAL YEAR (Projected) The projected FFB production for FY2018 is 312,000MT. Note : Projection of production is based on existing land bank. 12

13 FFB YIELD PER HECTARE MT/Ha KLR Group Malaysia FINANCIAL YEAR Reduction in 2017 is mainly due to El-Nino which adversely affected our estates in Sabah. 13

14 OIL YIELD PER HECTARE MT/Ha KLR - Sabah estate Sabah state FINANCIAL YEAR Note : The statistics for Sabah state are extracted from MPOB web-site based on calendar year 2013 to 2017 whilst the figures from KLR are based on its financial year (Feb Jan). 14

15 Palm Oil Milling: MILLING LOCATION Palm oil mill (60MT FFB/hr), Telupid Palm oil mill (90MT FFB/hr), Sook, Keningau Sandakan PENINSULAR MALAYSIA SABAH Palm oil mill (100MT FFB/Hr), Kota Tinggi, Johor SARAWAK Pasir Gudang 15

16 CPO OER COMPARISON % KLR - Johor Johor State KLR - Sabah Sabah State FINANCIAL YEAR Note : The statistics for Johor and Sabah state are extracted from MPOB web-site based on calendar year 2016 and 2017 whilst the figures from KLR are based on its financial year (Feb Jan). 16

17 Achievements 2016/2017 Kim Loong Resources Berhad was awarded by The Edge in year 2016 as the highest returns to shareholders over three years in Malaysia (Plantation). 2013/2014 Telupid mill was awarded by MPOB as the highest OER mill (External FFB source) in Malaysia. 2007» Keningau mill was awarded by MPOB as the highest OER mill in Malaysia.» The FIRST Palm-pressed Fibre Oil Extraction ( PFOE ) plant.» The FIRST registered methane emission reduction CDM Project from palm oil mill effluent Keningau mill was awarded by MPOB for achieving OER exceeding 25%. 17

18 Competitive Strengths Most of plantation in high yielding age. High FFB production generates strong cash flows and financial position. High OER and big milling capacity ensure our mill remain competitive. Improved efficiency and additional income from wastes in Mill. Good long term relationships with suppliers and customers. The Group management has over 40 years experience in oil palm industry. Capable managers and supporting staffs in all business entities. 18

19 Dividend Policy Target Dividend Payout Ratio» We do not have a formal dividend policy but we are committed to pay-out at least 30% of profit.» Our pay-out rate in the past 5 years are as follows: % FINANCIAL YEAR Dividend Pay-out (%) 19

20 BUSINESS OUTLOOK AND STRATEGIES 20

21 Near Term Prospect Plantation» The Group s FFB production for FY2018 is expected to recover significantly from the low FFB production recorded in FY2017.» Our main focus in the near term is to secure and plant up the NCR land and state land within our project area in Sarawak (refer slide 22 and 23). We expect more contribution from our young palms from Johor, new planting in Sarawak and replanting in Sabah.» The Group s performance is expected to be good for the FY2018 based on current trend of production as well as palm oil prices.» Continual replanting programme for old palms from 2018 to 2026, approximately 1,000 Ha per year.» FFB production is expected to come down gradually in view of replanting programme for estates in Sabah in coming years but to be cushioned by expected increase in yield from young mature areas from estates in Sarawak and Sandakan. 21

22 Near Term Prospect (continued) Winsome Pelita (Pantu) Out of the total gross land area 10,471 Ha, the preliminary estimated plantable area is approximately 5,000 Ha inclusive of the state land to be developed by its related company Winsome Pelita (Kranggas) As at 30 November 2017, we have secured 2,894 Ha of which 2,441 Ha have already been planted. The estimated plantable area is subject to Pelita Holdings Sdn Bhd ( PHSB ), the Government agency which monitors the implementation of the project, obtaining acceptance from the NCR owners of those areas to participate. We plan to develop the remaining available NCR plantable land within the next 2 years. The Federal Court has on 7 November 2017 delivered its Judgment which allowed the company s Appeal and to set aside the Judgment of the High Court and the Court of Appeal. Consequentially, the impairment of assets of RM2.9 million is reversed in the 4 th quarter of FY2018. The decision by the Federal Court is expected to cast a positive impact on development of this project. 22

23 Near Term Prospect (continued) Winsome Pelita (Kranggas) Winsome Plantations ( WPSB ) a wholly-owned subsidiary of KLRB had on 21st November, 2013 entered into a Joint Venture Agreement and on 10 July 2015 entered into a Supplemental Agreement with Pelita Holdings for the purpose of developing approximately 2,072 Ha of the State land at Kranggas Pantu, Sri Aman Division, Sarawak into an oil palm plantation through Winsome Pelita (Kranggas), a joint venture company. We are in the process of surveying the land. We also have to settle the squatter problem prior to development of the State land. 23

24 Near Term Prospect (continued) Kim Loong Power Power projects implementations in:» Mill at Kota Tinggi, Johor - 3 units (500 kilowatts gas engine each) from China for internal use. - 2 units caterpillar gas engine for supply to grid (1.8 megawatt) expected to complete installation and commence operation by end of 1 st quarter of 2018.» Mill at Keningau, Sabah - 2 units (500 kilowatts gas engine each) from China for internal use. - 2 units GE Jenbacher gas engine for supply to grid (2.0 megawatt) expected to commence installation in Approval obtained but REPPA not yet signed with SESB» Mill at Telupid, Sabah - 2 units (500 kilowatts gas engine each) from China for internal use. - in progress to apply for approval of 2.0 megawatt quota from Sustainable Energy Development Authority ( SEDA ). 24

25 Near Term Prospect (continued) Mill» Despite stiff competition from surrounding mills, we target to achieve FFB intake of 1.20 million MT which is slightly higher than 1.15 million MT achieved in the FY2017.» Estimated sales of excess palm kernel shells to third parties is about RM6.8 million from our three mills in FY2018.» Palm fiber oil solvent extraction plants ( PFOE ) in our Kota Tinggi and Keningau mills are running satisfactorily, contributing revenue and profit for the Group. 25

26 KLR Group s Future Plan KLR s future plans are as follows: To source for additional plantation land in Sabah and Sarawak. However, RSPO restrictions is a major contraint. To investigate and apply for setting up a palm oil mill in Sarawak. To generate power from biogas for sale to TNB national and Sabah Electricity grid. To obtain MSPO certification for palm oil produced by mills in Sabah and Johor. To develop commercial production of tocotrienols under Palm Nutraceuticals 26

27 Corporate Fact Sheet Corporate Address Lot 18.01, 18 th Floor, Public Bank Tower 19, Jalan Wong Ah Fook, Johor Bahru, Johor, Malaysia Directors Gooi Seong Lim Executive Chairman Gooi Seong Heen Gooi Seong Chneh Gooi Seong Gum Gan Kim Guan Chan Weng Hoong Cheang Kwan Chow Gooi Khai Chien Gooi Chuen Kang Managing Director Executive Director Executive Director Senior Independent Director Independent Director Independent Director Alternate Director to Mr. Gooi Seong Lim Alternate Director to Mr. Gooi Seong Heen 27

28 Corporate Fact Sheet (continued) Stock Exchange Listing Listed on 27 November 2000 Issued shares Market Cap Main Market of Bursa Malaysia Securities Berhad 312 million shares of RM1.00 par value RM1,372 million (based on share price of RM4.40 on 11 January 2018) Major Shareholders Sharikat Kim Loong Sendirian Berhad 63.27% (as at 29 Dec 2017) Citigroup Nominees (Tempatan) Sdn Bhd 2.41% Financial year end Teo Chuan Keng Sdn Bhd 2.12% Morisem Consolidated Sdn Bhd 1.96% Amanahraya Trustee Berhad 1.50% 31 January 28

29 (22703-K) (Incorporated in Malaysia under the Companies Act, 1965) THANK YOU Contact person : Mr Gooi Seong Heen (Managing Director) Tel : heen@kimloong.com.my 29