July 2009 New Britain Palm Oil Limited
New Britain Palm Oil (NBPOL) New Britain Palm Oil Limited Large plantation company (over 46,000 hectares planted), producing palm oil, founded in 1967 Total land bank of approx 85,000 ha History of profitability and dividend growth Established EU customer base Full vertical integration focused on sustainability and traceability One of the highest oil yielding companies in the industry A key company to the Papua New Guinea economy New entrants face a 3-4 year lead-in time until the production of Oil Palm fruit 1
2 New plantings and more mature palms
Financial Performance New Britain Palm Oil Limited 1st Quarter Highlights 3 months ended 31 March 2009 3 months ended 31 March 2008 Sales (USD (m)) 73.8 82.7 PBT (excluding IAS 41) USD (m)) 27.6 36.7 CPO Produced (Mt) 87,690 73,648 PKO Produced (Mt) 7,755 7,116 Average CPO price per Mt achieved (USD) 747 954 (Note: USD exchange rates as at 31 March 2009 and 31 March 2008 respectively) EXCLUDING IAS 41 Years ended 31 December 2008 2007 2006 USD 000 USD 000 USD 000 Revenue 352,219 224,954 133,764 EBITDA 124,170 94,493 41,349 Profit before tax 106,282 81,882 29,295 Profit after tax 76,433 59,182 21,430 Profit attributable to shareholders 74,835 58,767 21,617 Earnings per share 0.517 0,41 0,18 These figures are unaudited 3
View across NBPOL plantation showing Kumbango refinery Kumbango refinery 4
Interim Results New Britain Palm Oil Limited Highlights: 1st Quarter crop 22% ahead of 08 Extraction rate up to 22.89% (22.65% : 08) even though wet weather Palm price average in 1st quarter $747 vs $954 Cost of Imports dramatically down New mill commenced building 2 Methane Capture plants being constructed Cash reserves less bank borrowings of $54.6m at 31.03.09 5
Collecting Oil Palm Fruit (Fresh Fruit Bunch, FFB) Delivering FFB to Numundo Mill 6
Palm Oil New Britain Palm Oil Limited Palm Oil (NBPOL) Indicative oil yields Palm Oil (World Average) Rape Sun Soya 0 0.50 1.00 1.50 2.00 2.50 3.00 3.50 Globally achieved Oil yield (tonnes/ Ha) 4.00 4.50 Source: USDA/NBPOL 5.00 5.50 6.00 Palm production over past 10 years expanded by hectarage not yield improvement Land becoming scarcer and more controversial NBPOL targeting a combined oil yield of 30mt FFB and 30% extraction (ie target of 9mt of oil/hectare) Credit squeeze halted land expansion for most of industry Hedging (ie smoothing income) allows NBPOL to continue to expand on schedule New investments and growth all fundable Palm Rape Sunseed Soya Crop composition of land used globally to produce vegetable oils 15% 17% 6% 62% Composition of global vegetable oil production 36% 11% 16% 37% Source: USDA 7
Numundo Mill, FFB processing capacity of approximately 80 tonnes per hour Mosa Mill, FFB processing capacity of approximately 60 tonnes per hour 8
Market Update New Britain Palm Oil Limited Current CPO CIF Rotterdam Price - AMJ 09 US$575.00 JAS 09 US$572.50 OND 09 US$572.50 Malaysian palm oil stock as at end Jan 09 1.83 mln MT, down from 2.27 mln MT as at end Nov 08 China rapeseed crop affected due to poor weather. China importing more palm and soya Argentine soybean crop reduced due to poor weather to 42-45 mln MT 2007/8 46.50 mln MT Palm still cheapest oil vs competitive oils Production still growing in palm credit/economic situation reducing rapeseed and soy production High input costs have had an impact on fertiliser application Sales to date: 2009 156850 MT at US$780.00 approx (40%) 2010 21000 MT at US$621.21 average Source: Reuters 9
Kumbango refinery, built in 2003 (shown in foreground) produces a range of value added products Palm kernel oil production facilities 10
Commodity Price Movements New Britain Palm Oil Limited CPO CIF RDM & CBOT SBO & ULSD NY US$ PMT SPREAD 1600.00 1400.00 1400.00 1200.00 CPO CIF RDM US$ PMT 1200.00 1000.00 CBOT SBO UD$ PMT 1000.00 800.00 US$PMT 800.00 600.00 600.00 400.00 200.00 US$PMT CPO CIF US$ PMT +/- TO CBOT SBO 400.00 0.00 200.00-200.00 0.00 29-06-2007 27-07-2007 24-08-2007 21-09-2007 19-10-2007 16-11-2007 14-12-2007 11-01-2008 08-02-2008 07-03-2008 04-04-2008 02-05-2008 30-05-2008 30-06-2008 25-07-2008 22-08-2008 19-09-2008 17-10-2008 14-11-2008 12-12-2008 09-01-2009 ULSD Futures NY Harbour CPO CIF RDM US$ PMT +/- TO ULSD Futures NY Harbour -400.00 (Source SBO CBOT Closes Reuters European Vegoil Closes) 11
Delivery of FFB Sterilisation of FFB 12
Soft Commodity Market in Flux: New Demand, Lower Inventories New Britain Palm Oil Limited World Stock / Usage Ratios Wheat Corn Source: USDA Nov 2008 4 Main Oils 40% Ending stocks as % of annual usage 35% 30% 25% 20% 15% 10% 5% 0% 08/09(f) 07/08 06/07 05/06 04/05 03/04 02/03 01/02 00/01 99/00 98/99 97/98 96/97 95/96 94/95 93/94 92/93 91/92 90/91 89/90 13
Palm oil storage and infrastructure at NBPOL Palm oil storage at NBPOL 14
Palm Oil Price New Britain Palm Oil Limited WEIGHTED AVERAGE 2nd & 3rd POSITIONS WEEKLY CLOSES CPO CIF RDM US$ PMT 1600.00 1400.00 Palm oil (as all commodities) is priced on the margin of supply / demand US$PMT 1200.00 1000.00 800.00 600.00 400.00 200.00 Demand is resilient as increasingly urbanised Asian demand continues Government tariffs benefitting palm New palm oil supply takes 3-4 years from planting to commercial harvesting Average price achieved to Dec 2007 US$686 0.00 12-01-2007 09-02-2007 09-03-2007 05-04-2007 04-05-2007 01-06-2007 29-06-2007 27-07-2007 24-08-2007 21-09-2007 19-10-2007 16-11-2007 14-12-2007 11-01-2008 08-02-2008 07-03-2008 04-04-2008 02-05-2008 30-05-2008 30-06-2008 25-07-2008 22-08-2008 19-09-2008 17-10-2008 14-11-2008 12-12-2008 09-01-2009 Average price achieved to Dec 2008 US$926 Source: Reuters European Vegoil closes 15
Kimbe port, showing NBPOL bulk storage infrastructure Loading a bulk carrier from the Kimbe port terminal 16
NBPOL s Area of Operation New Britain Palm Oil Limited Papua New Guinea (PNG) is a Commonwealth country Independent and democratic since 1975 Standard & Poor s rating of PNG long-term foreign currency is rated `B+ with a stable outlook Main area of NBPOL operation Standard & Poor s long-term local currency rating is `BB- Ramu Agri-Industries Ltd The Intelligence Unit of The Economist rates overall PNG risk a `C similar to South Africa, China and Brazil There is no history of government intervention in the exporting of palm oil or in setting local prices PNG s economy is still strong with GDP higher than population growth 17
Numundo beef cattle ranch, integrated with palm oil plantations. NBPOL currently has c.4,000 head of cattle Dami Oil Palm Research Station is one of the world s largest producer of oil palm seeds 18
NBPOL Today New Britain Palm Oil Limited Plantations Land bank 85,000 ha More than 50,000 hectares under NBPOL cultivation More than 25,000 mature hectares cultivated by small-holders supplying NBPOL Milling and Refining 6 Oil mills in Group 1 Refinery in New Britain Infrastructure c.60,000 tonnes / oil storage capacity Trucking transport fleet Housing Pumping facilities Revenue contribution Palm Oil Sales Seed Sales Cattle Production Highly respected plant breeding research and development Vital for success of wider business Growing customer base around the world NBPOL is one of the world s largest private seed producers c.4,000 head of beef cattle in 2006 Integrated with the palm oil plantation Important for the protein constrained local community RAI 1 sugar mill 1 Ethanol plant 13,500 Head of cattle 19
NBPOL invests in housing, schools and hospitals for its employees Employee housing at Mosa 20
Production Growth New Britain Palm Oil Limited Tonnes FFB 1,300,000 1,200,000 1,100,000 1,000,000 900,000 800,000 700,000 600,000 Total Fresh Fruit Bunch (FFB) Processed 2004 2005 2006 2007 2008 39,000 38,000 37,000 36,000 35,000 34,000 33,000 32,000 Mature Palm Plantations Tonnes CPO 320,000 300,000 280,000 260,000 240,000 220,000 200,000 180,000 Crude Palm Oil (CPO) Produced Hectares 31,000 30,000 29,000 28,000 27,000 26,000 25,000 24,000 160,000 23,000 2004 2005 2006 2007 2008 140,000 2004 2005 2006 2007 2008 21
Latest photo of refinery 22
UK Refinery New Britain Palm Oil Limited Tate & Lyle storage Pipes from Tate s to ships Ship berth A 170,000 mt pa capacity refinery costing 18 million funded from the Company s cash reserves with start-up first quarter of FY2010 Planning permission granted and work commenced Derby Road Site Will create a dedicated supply chain from the Company s plantations to the customer s door from seed to finished product Will give the Company access to the valueadded end of the EU palm oil market Will provide the potential for margin enhancement through the ability to supply high quality oil which is sustainable, traceable and RSPO certified Assists with phasing of logistics to larger vessels thereby reducing per tonne rates 23
NBPOL plants all of its palms by identified progenies Nursery beds at Mosa 24
Energy Self Sufficiency New Britain Palm Oil Limited 5mw biomass power plant commissioned at Kumbango - will reduce diesel requirements at this site by approx 1 million litres p.a. Currently building Methane Capture at two mill sites with a further two to follow in 2010 - due to complete end 09 for first two mills - will generate approx +2mw per unit - plus total carbon credits of approx 170,000 CER (all 4 units) 25
Coral reefs close to NBPOL plantations Aerial view of New Britain coastline 26
Sustainability New Britain Palm Oil Limited NBPOL has been instrumental in bringing into existence an international organisation seeking to improve the sustainability credentials of the Palm Oil Industry, the Roundtable on Sustainable Palm Oil (www.rspo.org) The RSPO has over 300 members representing producers, consumers, the food and chemical industries and 19 NGO organisations (including WWF, the Zoological Society of London and Oxfam) The Company is the first RSPO member to be accredited as sustainable across its entire operation in New Guinea by an RSPO accredited auditor - BSI NBPOL has control over its harvesting, milling, refining, transportation and shipping, hence it can trace individual shipments to the EU back to source, vital to proving the sustainability of its oil NBPOL has been certified to the ISO14001 standard for environmental protection and management Potential future margin enhancement through sustainability and traceability credentials 27
NBPOL receives tax credits from the PNG government for infrastructure projects NBPOL has an active road building programme supported by tax credits 28
Short and Long Term Aims New Britain Palm Oil Limited Short Term Accelerate planting programme in New Britain Accelerate planting programme in the Solomon Islands Increase capacity of mills Increase storage capacity at port side by 50% Construct new bridging and road infrastructure Increase capacity of palm kernel crushing mill Develop new biomass fired power plant Develop carbon credit projects Seek appropriate acquisitions of land and related businesses Hectares 65,000 60,000 55,000 50,000 45,000 40,000 Five Year Projection of NBPOL Planted Area 35,000 30,000 Longer Term Plant and develop additional hectarage Potentially grow by acquisition Build three new mills, Malilimi, Numundo 2, Silovuti Seek appropriate acquisitions of land and other businesses 25,000 20,000 2007 2008 2009 2010 2011 Production output expected to double within 7/8 years 29
Methane Capture being built at one of the 2 sites currently in development during 2009 30
Summary New Britain Palm Oil Limited Company with 40 year history of continued growth Consistently profitable and dividend paying One of the world s lowest cost producers of palm oil Expanding annually with continued opportunity for significant expansion A strong EU based customer base Commitment to sustainability and product traceability Strong, secure production located in a stable democratic country 31
New Britain Palm Oil Limited www.nbpol.com.pg