Management Presentation Performance Update, Strategy and Outlook. Jakarta, November

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Management Presentation Performance Update, Strategy and Outlook Jakarta, November 2015 Disclaimer These materials have been prepared by PT Sawit Sumbermas Sarana Tbk ( SSMS or The Company ) and have not
Management Presentation Performance Update, Strategy and Outlook Jakarta, November 2015 Disclaimer These materials have been prepared by PT Sawit Sumbermas Sarana Tbk ( SSMS or The Company ) and have not been independently verified. No representation or warranty, expressed or implied, is made and no reliance should be placed on the accuracy, fairness or completeness of the information presented or contained in these materials. Neither the Company nor any of its affiliates, advisers or representatives accepts any liability whatsoever for any loss arising from any information presented or contained in these materials. The information presented or contained in these materials is subject to change without notice and its accuracy is not guaranteed. These materials contain statements that constitute forward-looking statements. These statements include descriptions regarding the intent, belief or current expectations of the Company or its officers with respect to the consolidated results of operations and financial condition of the Company. These statements can be recognized by the use of words such as expects, plan, will, estimates, projects, intends, outlook or words of similar meaning. Such forward-looking statements are not guarantees of future performance and involve risks and uncertainties, and actual results may differ from those in the forward-looking statements as a result of various factors and assumptions. The Company has no obligation and does not undertake to revise forward-looking statements to reflect future events or circumstances. These materials are for information purposes only and do not constitute or form part of an offer, solicitation or invitation to buy or subscribe for any securities of the Company in any jurisdiction, nor should these materials or any part of them form the basis of, or be relied upon in any connection with, any contract, commitment or investment decision whatsoever. Vision Mission Commitments Vision Becoming A World-class Plantation Company Mission Building a professional plantation business Increasing added values for all stakeholders Implementing perfect principles of corporate governance Utilizing environmentally friendly and advance technology Developing its human resources and the local potentials in the spirit of partnership Commitments No burning No planting on HCV Zero waste policy Zero loose fruit policy HCV assessments Develop conserved area Strengthen R&D program 3 Solid Company Milestones 1995 PT Sawit Sumbermas Sarana Tbk established in Central Kalimantan 2009 Planted area surpassed 30,000Ha and commencement of Palm Oil Mill Natai Raya 2011 Commenced operation of 3rd Palm Oil Mill, Suayap and Kernel Crusher Plant, Suayap 2013 Commenced operation of 4th Palm Oil Mill, Selangkun 2013 IPO listed in Indonesia Stock Exchange 2000 The first planting of 103Ha palm oil plantation 2006 Started production of CPO with Palm Oil Mill Sulung 2010 Production of CPO surpassed 120,000 MT 2012 CPO production surpassed 200,000 MT 2014 FFB processed surpassed 1,000,000MT 1Q15 Total planted area 59,386Ha through acquisition of TSA and SMU SSMS planting profile (Ha) CBI Group and Parent Public 75.8% 24.2% PT Sawit Sumbermas Sarana Tbk First Planting 103Ha 99.8% 99.4% 94.6% 93.1% ASP SML MMS KSA 100.0% 100.0% SBI 9% 9% TSA SMU CBU Note: CBI Citra Borneo Indah, MMS Mitra Mendawai Sejati, KSA Kalimantan Sawit Abadi, ASP Ahmad Saleh Perkasa, SML Sawit Mandiri Lestari, TSA - PT Tanjung Sawit Abadi, SMU - PT Sawit Multi Utama SSMS effectively owns 9% of CBU and SBI each through itself and subsidiaries KSA and MMS 4 Prime land in strategic location Central Kalimantan Province KDE PDE SBE SPE NKE NNE Kabupaten Lamandau BKE RGE SGE Sukamara Regency JAVA SEA Nanga Bulik Pangkalan Bun UPE POM MLE MLE POM SYE KCP SYE SLE SYE PLE KNE POM SLE RDE POM SGE NBE POM NBE Kumai Port Iskandar Airport Customer refinery Jetty, bulking facility & future refinery Kotawaringin Barat Regency Sumatera Kalimantan I N D O N E S I A Jawa Plantation estates Palm oil mills Kernel crushing plant Iskandar Airport KumaI Port Main City Pangkalan Bun Estates under management agreement Jetty, bulking facility, refinery Customers refinery Planted Unplanted Infrastructure Total Sulawesi Managed Area (Ha) 59,386 43,782 7, ,517 SSS 20, ,686 22,748 MMS 8, ,909 10,347 KSA 5,628 1, ,276 SMU 14,861 1, ,485 TSA 10,462 2,968 1,532 14,962 SML - 26,995-26,995 ASP - 10,705-10,705 Total 110,517Ha of prime land under management with most area have mineral soil characteristic and flat terrain. 59,386Ha planted as of June % of the land under management already obtained Land Rights or Land Permits. Geographically concentrated where plantations and mills are well-spread within 50km radius. Strategically located along the Trans-Borneo Highway in proximity with customer s refineries, Kumai port and Iskandar airport. 43,782 Ha unplanted as base for organic growth. SSMS Managed Area Breakdown 1H15 Land Rights 28% Under process 3% Land Permits 69% 5 Young and high-yielding plantations FFB productivity is back in the high-growth phase; post-acquisition average age is adjusted to 6.5 years old due to TSA-SMU younger profile Using the high-yielding 2nd generation seeds namely from major providers; Lonsum, Socfin, Damimas and Topas AsianAgri. Application of best practices in plantation management; RSPO and ISPO certified 9m15 FFB production MT or 25.0% increased from 9m14 as direct impact from TSA-SMU acquisition since 18 February SSMS Proforma Age Tree Profile 9m15 Young Mature 33% 6.5 Average age Prime 52% Field Operation FY13 FY14 FY14/13 9m14 9m15 9m15/14 Planted Area (Ha) 33,240 34, % 33,300 59, % Immature 15% Immature 678 1, % 393 8, % Young mature 14,611 9, % 9,129 19, % Prime 17,951 23, % 23,778 30, % FFB Productivity FY13 FY14 FY14/13 9m14 9m15 9m15/14 FFB production (mt) 711, , % 586, , % TSA-SMU 48 days pre-acquisition adjustment (mt) 27,587 Theoretical Yield by Planting Year (MT/Ha) High-growth Phase Steady Phase Decline Phase Production for the period (mt) 760,834 Yield (MT/ha/Period) Immature Average age (years) Efficient mills operations with growth potential Mills operations FY13 FY14 FY14/13 9m14 9m15 9m15/14 Capacity for the period (MT) 1,530,000 1,530,000 0% 1, ,346, % Capacity per hour % Utilization rate 65% 68% 68% 70% FFB processed (MT) 995,033 1,038, % 743, , % FFB production 711, , % 586, , % FFB purchases 283, , % 156, , % Production (MT) Crude Palm Oil 230, ,214 5% 173, , % Palm Kernel 44,231 44, % 31,225 42, % Crude Palm Kernel Oil 4,058 6, % 4,007 4, % Extraction Rate (%) Crude Palm Oil 23.2% 23.3% 23.40% 23.83% Mills current utilization indicating sufficient capacity to support the expected growth in FFB production SSMS CPO Mill Capacity and utilization FY13 FY14 1H15 4Q15 Palm Kernel 4.5% 4.3% 4.11% 4.52% Crude Palm Kernel Oil 40.0% 39.4% 40.0% 39.6% Operating 5 (five) CPO Mills; Sulung, Natai Raya, Suayap, Selangkun and Malata with combined milling capacity 315MT FFB /hr Blended oil extraction rate at 23.7% - which consist of nucleus fruits OER at 25.0% and purchased fruits at 19.8% CPO Mills utilization rate at 69% shows production growth potential Capability to optimize profit from sales of Palm Kernel or further processing to Crude Palm Kernel Oil (Mill Suayap) Additional 1 (one) CPO Mill located in SMU currently under construction with 60MT/hr FFB capacity ready by 4Q15 7 High Yield, Efficient, and Competitive Cost Plantation 1H15 Peers Comparison - FFB Yield (MT/Ha) SSMS - Cash Cost Breakdown Units 9m15 15,1 18,6 16,2 13,9 12,7 11,7 15,8 Sector 14,9 Fertilizer and maintenance Rp bn Labor Rp bn Harvesting Rp bn SSMS DSNG AALI First Res LSIP SGRO GAR JAWA GZCO 1H15 Peers Comparison Oil Extraction Rate 23,7% 23,3% 21,6% 22,8% 23,1% 21,4% 22,7% Sector 22.6% Overhead Rp bn Total field cost Rp bn Field cost/ffb Rp /kg Field cost/cpo Rp /kg 2,376.3 Milling cost Rp bn 51.9 Milling cost/cpo Rp /kg SSMS DSNG AALI First Res LSIP SGRO GAR JAWA GZCO 1H14 Peers Comparison CPO Yield (MT/Ha) 3,5 4,3 3,5 3,2 3,0 2,4 4,4 Sector 3,5 - - SSMS DSNG AALI First Res LSIP SGRO GAR JAWA GZCO Total Cash Cost per CPO Rp /kg 2,606.9 FX rate Rp/USD 13,548 Cash cost / MT CPO USD Additional cost benefits: Operational synergies Lower transportation costs Optimal logistics and shared resources USD/mt A sound financial performance Comp. Income (Rp bn) FY14 9m14 R 9m15 1H15/14 Sales 2, , , % Cost of Goods Sold -1, % Gross income 1, % G&A expenses % Operating income % Finance income (costs) % Income for the year/period % Proforma adjustment % Income after proforma adjust % Profitability (%) FY14 9m14 R 9m15 Gross margin 52.9% 48.5% 51.4% Operating margin 42.8% 33.8% 36.4% Net margin 33.8% 24.6% 21.2% Financial Position (Rp bn) FY14 R 9m15 9m15/14 Assets 6, , % Current assets 2, , % Non-current assets 4, , % Current liability 2, % Non-current liability 1, , % Minority interest % Equity 2, , % R = Restated 9m15 Income for the period booked Rp373.9bn and Income after proforma adjustment reached Rp430.1bn Proforma adjustment in 1H15 also restated 1H14 and FY14 Financial Statements due to TSA-SMU acquisition which was done on February 18th, m15 Sales Rp1,761.1bn, supported by 10.8% higher in CPO Sales Volume despite 12.0% decreased in ASP. Gross Income, Operating Income and Net Income margins maintained at healthy level of 51.4%, 36.4% and 21.2%. 9m15 Equity were Rp2,890,2 bn or slight increment compared to restated FY14. 9m15 Cash and equivalent Rp bn reserved for future Capex and Working Capital. SSMS Strong Capital Structure 0,9 1,9 0,2 0,1 FY12 FY13 FY14(0,2) 9m15** NetDebt/Ebitda (0,5) NetDebt/Equity 2,1 0,7 **Simple annualized Ebitda= 9m15 / 3 x 4 quarters 9 Financial Summary Sales (Rp bn) Operating Income (Rp bn) FY10 FY11 FY12 FY13 FY14 9m15 FY10 FY11 FY12 FY13 FY14 9m15 Net Income (Rp bn) Ebitda (Rp bn) FY10 FY11 FY12 FY13 FY14 9m15 FY10 FY11 FY12 FY13 FY14 9m15 10 Demand Drivers Growing demand for food primarily in Asia especially China and India Expansion of oleochemical business requirements Increased awareness of health benefits of palm oil Increased use in biodiesel Palm Oil is the cheapest edible oil Upside potential El Nino 2015, Australian Bureau of Metereology prediction Implementation of biodiesel from Indonesia and Malaysia Depreciation of Rupiah Weather issues that may cause supply disruptions Downside risk Continuing pressure on global economy Delays in adoption of bio diesel mandates Possible drag from low fossil oil prices Outlook for Palm Oil Continues to be Favorable 26 9,0 8,0 7,0 6,0 5,0 4,0 3,0 Global CPO Consumption SSMS Avg. Selling Price CPO 762 6, ,4 Rp mn/mt ,7 USD/MT FY10 FY11 FY12 FY13 FY14 9m , , , Edible Oil Consumpt./Capita 2002 vs 2014 (kg) Dev. Avg US EU-27 Indonesia China India 11 MKM An Inorganic Growth On 3 November 2015, PT Mitra Mendawai Sejati (MMS) a subsidiary has purchased 100% ownership of PT Menteng Kencana Mas (MKM) A plantation located in Pulang Pisau, Central Kalimantan which managed a total area landbank approximately 20,800 ha; 5,857 ha planted nucleus and 1,400 ha planted plasma. This transaction does not qualified under material nor affiliated transaction. Company Structure Post Acquisition CBI Group and Parent 75.0% SSMS Public 25.0% The acquisition will: ASP 1. Consolidate all upstream plantation assets of CBI under SSMS 2. TSA and SMU are adjacent plantations; enhance operational synergies 3. Strengthen SSMS position among peers MKM SML MMS KSA TSA SMU Refinery Jetty and Bulking SBI CBU 9% (1) 9% (1) (1) SSMS effectively owns 9% of CBU and SBI each through itself and subsidiaries KSA and MMS 12 SSMS Growth Strategy 1. Engage in sustainable palm oil production by RSPO and ISPO standard 2. Focus in core competence upstream Palm Oil Plantation business 3. Continuous efficiency improvements and application of best agronomy practices 4. Target additional planted area of 5,000-6,000Ha per annum 5. Strategic acquisition opportunities 13 Thank You Visit our website at Mailing Address: PT Sawit Sumbermas Sarana Tbk Head Office Jl. H. Udan Said No.47 Pangkalan Bun Kalimantan Tengah, Indonesia Representative Office Equity Tower, Suite 43D Jl. Jend Sudirman Kav Jakarta 12190, Indonesia Disclaimer: The information contained in this document is intended only for use during the presentation and should not be disseminated or distributed to parties outside the presentation. All projections are based on estimation, the realization thereof may deviate from the projection. PT Sawit Sumbermas SaranaTbk. accepts no liability whatsoever with respect to the use of this document or its contents. 14
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