CB Industrial Product Holding Berhad Equipping Palm Oil Industries Around The World CBIP Financial Highlights FY 2012
Operational Highlights Leading engineering company specializing in construction and engineering of palm oil mills Strong in engineering expertise and experience in construction of palm oil mill Leading manufacturer and supplier of Palm Oil Mill components Successfully invented and commercialized Modipalm mills with patented continuous sterilization process Patented in Malaysia and Indonesia till 2021 Modipalm granted pioneer status for 10 years till 2015 Sustaining longer term contribution from Plantation activities Steady earnings from plantation associates and JVs Building platform for future growth through plantation assets in Kalimantan, Indonesia 2
Financial Highlights & Corporate Developments Strong growth in continuing operations FY12 revenue and PBT of RM520.4m and RM97.6m translate to y-o-y growth of 61.3% and 37.7% respectively Balance sheet in net cash position Declared and paid total tax exempt dividend of 35sen per share for FY11 Comprising of interim dividend of 5sen* per share, and a second interim dividend of 30sen per share paid in May 2012 * adjusted for 1 for 1 bonus issue completed in March 2012 Declared and paid tax exempt and single tier dividend for FY12 First interim dividend of 10sen per share paid in Sep 2012 Second interim dividend of 5sen per share paid in Jan 2013 Latest corporate exercises Completed acquisition of 94% of PT Berkala Maju Bersama (BMB) and PT Jaya Jadi Utama (JJU) in April 2012 for a total purchase price equivalent to RM14.2m Completed sale of Sachiew Plantations Sdn Bhd and Empresa (M) Sdn Bhd in May 2012 for total cash consideration of RM268m Proposed acquisition 94% of PT Gumas Alam Subur (GAS) and PT Kurun Sumber Rezeki (KSR) in August and October 2012 respectively for a total purchase price equivalent to RM13.7m 3
CB Industrial Product Holding Berhad Equipping Palm Oil Industries Around The World Review of FY12 Results
Key Financial Highlights FYE Dec (RMm) FY12 FY11 %Chg FY10 % Chg Revenue 520.35 322.61 +61.3 270.89 +19.1 Profit from Operations 88.88 49.91 +78.1 40.36 +23.7 Associates & Jointly-controlled (Net of tax) 9.46 22.51-58.0 13.98 +61.0 PBT 97.63 70.89 +37.7 52.48 +35.1 Net Profit (after MI) * 85.61 68.34 +25.3 48.78 +40.1 Opt Margin (%) 17.06 15.5 14.9 * net profit from continuing operations Revenue growth underpinned by Increase in project billings Improvement in project completion for retrofitting special purpose vehicles Improved profitability for mill equipment & construction operations Higher better margin mechanical portion vs turnkey/civil works Ability to command premium pricing for Modipalm mills Lower CPO prices and production led to reduced profits from plantation associates and JVs 5
Equipment and Contracting * 800 20% 17.1% 600 14.3% 13.0% 15.6% 14.9% 15.5% 16% 520 12% 400 357 323 8% 200 264 271 271 4% - FY07 FY08 FY09 FY10 FY11 FY12 0% Revenue (RMm) Opt Margin (%) * excluding contribution from disposed plantation subsidiaries 6
Dividend 40 35 30 25 20 15 10 5 0 Gross dividend per share (sen) ^ Payout ratio (%) 90% 52% 30.0 32% 31% 29% 5.0 17% 8.1 17% 11% 10.0 2.5 2.5 1.5 1.8 5.0 1.5 1.8 2.5 2.5 2.5 2.5 FY05 FY06 FY07 FY08 FY09 FY10 * FY11 FY12 Interim 2nd Interim Final Dividend payout (LHS) 100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% * credited 3rd interim share dividend of 1 for 20 for FY10 ^ adjusted for 1 for 1 bonus 1 st interim of 10 sen for FY12 paid on 28 Sep 2012 2 nd Interim of 5 sen for FY12 paid on 23 Jan 2012. To maintain one-third of net profit as dividend payment 7
CB Industrial Product Holding Berhad Equipping Palm Oil Industries Around The World Operations & Prospects
Production Capacity & Projects Award Capacity to produce 14 mills per annum with > 66,000 sq m floor space Factory Output : Financial Year No of Projects Total Capacity (TPH) 2007 9 325 2008 10 385 2009 9 370 2010 11 440 2011 12 502 Projects Award : Financial Year No of New Contracts Secured Total Value (RMm) 2007 10 191.0 2008 10 139.4 2009 14 173.7 2010 14 178.6 2011 18 313.2 * excluding retrofitting of special purpose vehicles and boilers 9
Projects Orderbook Sizeable unbilled portion of about RM329m as at end FY12 Equivalent to 1.3x FY12 turnover Expect to drive revenue and profit growth for FY13 Projects in Hand Value (RMm) % Recognition Unbilled Sales (RMm) Palm oil mill construction - Malaysia 236.3 47.7% 123.5 - Indonesia 495.9 67.8% 159.4 - Other countries 60.5 57.4% 25.8 Boilers 157.3 74.6% 40.0 Total 950.0 63.3% 348.7 * excluding retrofitting of special purpose vehicles New contracts recently secured in FY12 RM60m contract from Jaya Tiasa (RM40m for 120 tph) and PT Swakarsa Sawit Raya (RM20m for 45 tph) RM16m boilers contract from Wilmar and Sime Darby Targeting to secure projects worth RM500m to sustain orderbook growth Core demand from Indonesia PNG emerging as potential new growth market 10
Plantation Division Disposal of Sachiew and Empresa completed in May 2012 Raised RM268.1m cash Consolidating plantation assets in Kalimantan, Indonesia Acquired PT Berkala Maju Bersama and PT Jaya Jadi Utama in April 2012 Total plantation land in Kalimantan under subsidiaries raised to 37,273ha o Total plantable area is now approximately 33,000ha Additional plantation land of 30,958 ha with proposed acquisition of PT GAS and PT KSR Subsidiaries Effective Interest (%) Landbank (ha) Estimated Planted Areas (ha) PT Sawit Lamandau Raya (SLR) 85% 8,000 5,000 PT Jaya Jadi Utama (JJU) 94% 13,645 13,000 PT Berkala Maju Bersama (BMB) 94% 15,628 15,000 Total 37,273 33,000 Associate & Jointly-controlled Solar Green Sdn Bhd (50%) 50% 5,567 Kumpulan Kris Jati Sdn Bhd 30% Bahtera Bahagia Sdn Bhd 30% 20,855 11
Planting Schedule for Indonesian Estates Target to complete planting for 5,000ha in SLR by FY13 Currently preparing nurseries for JJU and BMB Expect to commence planting in FY13 Annual planting expected to be 8,000-10,000 ha per annum SLR JJU BMB 2011 1,300 ha - - 2012E 400 ha - - 2013E 3,300 ha - 4,000 ha 2014E 45MT mill - 4,000 ha 2015E - 4,000 ha 2,000 ha & 45MT mill 2016E - 4,000 ha 3,000 ha 2017E - 3,000 ha 2,000 ha & 45MT mill 2018E - 2,000 ha & 45MT mill - Total 5,000 13,000 15,000 12
Outlook and Prospects Targeting consistent profit growth of 20% p.a. Unbilled orderbook of Modipalm mills of RM349m as at 31 Dec 2012 Steady contribution from plantation associates and JVs Equipment & Contracting Division Securing new projects to further grow orderbook in Modipalm mills o Proven benefits of Modipalm mills and its continuous sterilization process o Core demand in Indonesia, with PNG offering new prospects Growing recurring revenue from replacement and upgrading works o Accounts for 10% of Modipalm revenue currently o Pursuing new market segment in older and under-performing mills Plantation Division Positive impact in the longer term with new cultivation in Kalimantan, Indonesia o Plantation hecterage rose from 8,000ha to 37,273ha with recent land acquisitions o Potential additional land bank of 30,958ha via proposed acquisitions of PT GAS and PT KSR 13