Kencana Agri Limited 3Q FY2010 Performance Review 1
Disclaimer This document has not been independently verified and has been prepared for informational purposes only. No representation or warranty express or imply is made as to, and no reliance should be placed on, the fairness, accuracy, completeness or correctness of the information or opinions contained herein. It is not the intention to provide, and you may not rely on this document as providing, a complete or comprehensive analysis of the company s financial or trading position or prospects. The information and opinions contained in these materials are provided as at the date of this presentation and are subject to change without notice. None of Kencana Agri Limited or any of its affiliates, advisers or representatives shall have any liability whatsoever (in negligence or otherwise) for any loss whatsoever arising from any use of this document or its contents. 2
Group Overview 3
Overview of Our Group s Operation Plantation Processing Products Supporting Business Palm Oil Mills CPO Bulking Terminal Fresh Fruit Bunches (FFB) Total Land bank 188,784 ha (1) Nucleus: 176,412 ha, Plasma: 12,372 ha. Total Planted Area 43,340 ha (1) Nucleus: 32,975 ha, Plasma: 10,365 ha. Kernel Crushing Plants No. of Mills: 3 Total Production Capacity: 165 MT/hour Total Annual Processing Capacity : 940,500 MT Total Production Volume: 66,017 MT (FY2008) 87,239 MT (FY2009) 60,233 MT (9M2010) Renewable Waste (Empty Fruit Bunches, Liquid Waste, Kernel Shells, Fibre) CPKO Total capacity: 19,500 MT Logistics No of Vessels : 3 Total Capacity: 7,600 MT Biomass Power Plant Note : 1. As at 30 Sep 2010, subject to final measurement by local authority No. of Kernel Crushing Plants : 2 Total Production Capacity: 435 MT/day Total Annual Processing Capacity : 108,315 MT Total Production Volume: 24,323 MT (FY2008) 20,258 MT (FY2009) 14,254 MT (9M2010) Palm Kernel Cake 1 st Plant (2005) Location: Bangka Capacity: 6.0 MW 2 nd Plant (2009) Location: Belitung Capacity: 7.5 MW 4
Where We Are Estate Location 5
Development of Oil Palm Plantations Planted Area : Nucleus + Plasma (Ha) 45000 40000 35000 Phase 1 Phase 2 30000 25000 20000 15000 10000 5000 0 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 1Q2010 9M2010 1 st Phase Oil Palm cultivation started in 1996 in Bangka island, Sumatra (1,215 ha). This was followed by the 2 nd planting in 1998 in South Kalimantan 2 nd Phase Started in 2004 in south and east Kalimantan with rapid planting programme * By 9M2010: Approximately 43,340 ha of oil palm planted Year of Planting Plasma Nucleus 6
Operational Highlights 7
Significant Land Bank for Future Planting 77% 23% 59% 41% (Hectares) Land Bank Planted Area Nucleus 176,412 32,975 Plasma 12,372 10,365 Total 188,784 43,340 8
Age Profile of Planted Areas 32,975 ha 10,365 ha 7,214 ha 22% 2,091 ha 20% 13,911 ha 42% 3,814 ha 37% 11,850 ha 36% 4,460 ha 43% 1. Group Overview 2. Operational Highlights 3. Financial Highlights 4. Key Developments 9
Potential Double-Digit FFB Production Growth % of Nucleus Planted 20.00 18.00 16.00 14.00 12.00 10.00 Over 75 % Immature & Young Weighted Average Oil Palms Age = 5.5 Years Immature : 42.2% Young mature :35.9 % Prime mature : 21.9 % 8.00 6.00 4.00 2.00-15 14 13 12 11 10 9 8 7 6 6 4 3 2 1 5 Age of Oil Palm Potential For Strong Double-Digit Production Growth Over The Next 5 Years 10
Production Volume 3Q 2009 3Q 2010 % Change 9M 2009 9M 2010 % Change Fresh Fruit Bunch (MT) 112,447 118,630 +5.5 309,441 313,363 +1.3 - Nucleus 67,222 65,554-2.5 190,332 169,852-10.8 - Plasma 16,317 18,588 +13.9 47,238 52,824 +11.8 - External 28,908 34,488 +19.3 71,871 90,687 +26.2 Crude Palm Oil (MT) 23,538 21,820-7.3 63,736 60,233-5.5 Crude Palm Kernel Oil (MT) 4,578 5,170 +12.9 13,837 14,254 +3.0 CPO and CPKO Production: The 5.5% decrease in CPO production for 9M2010 was mainly due to lower production of FFB in 9M2010 as a result of adverse weather conditions in 2008. A slight increase in CPKO production for 9M2010 was mainly due to higher purchase of Kernel from outside parties. 11
Production Yields Production Yields 3Q 2009 3Q 2010 % Change 9M 2009 9M 2010 % Change FFB Yield (MT/ha) [Group Average] - Nucleus 4.0 3.4-15.0 11.3 8.9-21.2 - Plasma 3.0 2.8-6.7 8.5 8.1-4.7 CPO Extraction Rates 20.9% 19.5% -6.7 20.7% 20.4% -1.4 CPKO Extraction Rates 41.0% 40.0% -2.4 40.2% 40.0% -0.5 12
Sales Volume and Revenue (CPO & CPKO) 3Q 2009 3Q 2010 % change 9M 2009 9M 2010 % change Sales Volume (MT) - CPO 39,977 28,400-29.0 106,070 75,023-29.3 - CPKO 4,982 5,562 +11.6 17,960 15,811-12.0 Sales Revenue (USD 000) - CPO 29,576 21,770-26.4 67,869 55,094-18.6 - CPKO 3,139 6,085 93.9 11,106 15,598 +40.4 Average Sales Price (USD) - CPO 660 770 +16.7 640 730 +14.1 - CPKO 630 1,100 +74.6 620 990 +59.7 13
Financial Highlights 14
Financial Performance USD 000 3Q 2009 3Q 2010 % Change 9M 2009 9M 2010 % Change Revenue 33,981 30,723-9.6 81,523 78,841-3.3 Gross profit 3,613 5,917 +63.8 13,118 15,936 +21.5 Operating profit 1,557 4,803 +208.5 7,126 10,936 +53.5 Profit before tax 769 3,125 +306.4 4,944 7,236 +46.4 Net profit for the period 521 2,231 +328.2 3,541 5,516 +55.8 EBITDA 2,228 5,811 +160.8 8,995 13,923 +54.8 Gross margin (%) 10.6 19.3 +82.1 16.1 20.2 +25.5 Net profit margin (%) 1.5 7.3 +386.7 4.3 7.0 +62.8 EBITDA margin (%) 6.6 18.9 +186.4 11.0 17.7 +60.9 15
Balance Sheet USD 000 As at 31 Dec 2009 As at 30 Sep 2010 % Change Current Assets 40,221 91,613 +127.8 Non-current Assets 220,392 264,866 +20.2 Total Assets 260,613 356,479 +36.8 Current Liabilities 30,906 35,138 +13.7 Non-current Liabilities 86,005 127,163 +47.9 Total Liabilities 116,911 162,301 +38.8 Shareholders Equity 143,702 194,178 +35.1 Net Debt/Equity Ratio (%) 49.3 40.2-18.5 Net Debt/Total Assets (%) 27.2 21.9-19.5 Debt/EBITDA (x) 5.6 9.0 +60.7 EBITDA/Interest Expense (x) 4.2 3.7-11.9 16
Cash Flows USD 000 3Q 2009 3Q 2010 % Change 9M 2009 9M 2010 % Change Net cash from/(used in) operating activities 1,302 (2,613) n/m 7,159 (4,624) n/m Net cash used in investing activities (11,198) (8,004) +28.5 (29,201) (25,757) +11.8 Net cash from financing activities 13,073 52,040 +298.1 15,028 72,529 +382.6 Net effect of exchange rate changes in consolidating entities 288 235-18.4 2,250 413-81.6 Net increase/(decrease) in cash 3,465 41,658 +1102.3 (4,764) 42,561 n/m Cash at beginning of period 2,680 5,595 +108.8 10,909 4,692-57.0 Cash at end of period 6,145 47,253 +669.0 6,145 47,253 +669.0 n/m = not meaningful 17
Updates and Future Developments 18
Updates and Future Developments Updates: Raised net proceeds of US$38.1 million from share placement to Wilmar Group Planted area increased by 4,000 ha since December 2009 Completed our third mill with 45MT/Hr capacity in East Kalimantan Future Developments: The port project in joint venture with Louis Dreyfus Commodities is progressing well and expected to be operational in 2011. This will add value to the company and propel it to be a significant palm oil player in East Kalimantan To complete 4th mill with 45 MT/hour capacity in 2011 Add more vessels in 2011/2012 to handle greater trading volume with completion of new port 19
Thank You 20