New BritainPalm Oil Ltd2010
New BritainPalm Oil Ltd2010
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New BritainPalm Oil Ltd2010
Preliminary Results 2009&
Proposed acquisition of 26,000 hectares
of established plantations
February 2010
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Kumbango refinery, New Britain, PNG
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New BritainPalm Oil Ltd2010
Introduction
Large established plantation group, producing palm oil, founded in 1967 •
Growth delivered traditionally through organic expansion, and more recently through acquisition •
Established EU customer base, including United Biscuits and Ferrero Group •
Full vertical integration focused on sustainability and traceability •
One of the highest palm oil product yielding companies in the industry •
Presenting an acquisition to deliver an immediate increase of over 50% in established plantation assets •
48,907 hectares planted, and now proposing to acquire an additional 26,292... •
...to give a land bank of over 113,000 ha•
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Plantation areas in West New Britain, showing nursery areas and flat topography
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New BritainPalm Oil Ltd2010
Solid Results.. .
2009 2008FFB processed (million tonnes) 1.47 1.27
CPO / PKO produced (tonnes) 366,000 320,000
Average CPO price achieved ($ / tonne) $710 $926
2009 2008Revenue ($m) 323.8 352.2
EBITDA ($m) 114.2 124.2
Profit before tax* ($m) 85.3 106.3
Earnings per share (US ¢) 41.8 51.7
Dividend per share (US ¢) 28.0 41.8
* Excluding IAS 41
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NBPOL storage facility at Kimbe
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New BritainPalm Oil Ltd2010
Gross margin of 49% (2008: 53%) is pleasing given lower pricing environment in 2009 •
Group had cash holdings at the end of 2009 of $13.5m, with a further $51.9m in trade oil debtors, which has subsequently •been received
A record 1.47m tonnes of oil palm fruit processed (2008: 1.27m tonnes) •
Average 2009 CPO sales price of $710/tonne (2008: $926), against a backdrop of the average CIF Rotterdam price of $683/•tonne
At the end of 2009 forward sales of c.38% of 2010 production (134,000 tonnes of CPO) had been made at an average price •of $719/tonne
As at 22 February this figure was c.164,000tonnes at an average price of $746/tonne •
Construction of UK palm oil refinery is nearing completion, first shipment in transit from PNG •
Upgrade to various mills in PNG will increase capacity to cover current organic growth•
Solid Results.. .
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Higaturu, CTP
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New BritainPalm Oil Ltd2010
. . . and a Transformational Acquisition
Entered into SPA to acquire CTP(PNG) Ltd •
Consideration of $175m •
Total planted hectarage to be acquired: 26,292 ha •
To be financed from cash resources and new • corporate facilities
SCB and ANZ providing facility with attractive • terms at market rates
Retaining a conservative balance sheet without • equity dilution
Class 1 Transaction requiring shareholder • vote
Kulim (51% shareholder) has provided an • irrevocable
Expected completion mid-April •
IPBC and NIDC to retain shareholding•
CTP (PNG) Ltd
80%20%
IPBC*1
Other assets
Poliamba Ltd
Poliamba Estates Higaturu Estates Milne Bay Estates
81.29%
NIDC*2
18.71%
• total planted area: 5,689• location: New Ireland, PNG• no. mills: 1
• total planted area: 8,974• location: Western PNG• no. mills: 3
• total planted area: 11,629• location: Western PNG• no. mills: 1
CTP HOLDINGS PTE Limited
*1 Independent Public Business Corporation*2 New Ireland Development Corporation
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CTP assets: top and left, Mamba Mill at Higaturu; middle, housing at Higaturu; right, labour housing at Nalik Estate, Poliamba
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New BritainPalm Oil Ltd2010
CTP Financial Summary
2009 2008
Total CPO produced (tonnes) 156,679 160,880
Revenue ($m) 98.4 92.4
Profit before tax (pre-IAS41 adjustment) ($m) 18.1 8.4
Year ended 31 May
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Oil palm nursery, West New Britain
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New BritainPalm Oil Ltd2010
CTP - History & Location
Higaturu first developed in 1976 replacing •a cocoa project via a JV with the British Commonwealth Development Corporation (CDC), with funding from the World Bank
Milne Bay first began in 1985, again in •conjunction with CDC and the World Bank Poliamba was the most recent •development, mostly completed in 1992, brought into the CDC group in 1998
In October 2005 Cargill Inc (through its •70% owned subsidiary) acquired 80% of CTP from CDC Group plc
PNG is a Commonwealth country, •independent and democratic since 1975
Stable, no history of government •intervention in oil palm sector
Rating similar to South Africa, China, •Brazil
PAPUA NEW GUINEA
NEW BRITAIN
NEW IRELAND
SOLOMONISLANDS
AUSTRALIA
•Kimbe
Main area of NBPOL operation
Lae•
Ramu Agri-Industries Ltd- acquired in Oct 2008 •
CTP, Milne Bay11,629 hectares
•
CTP, Higaturu8,977 hectares
•
CTP, Poliamba5,689 hectares
GPPOL- acquired in April 2005
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Palm Kernel Oil (PKO) production facilities, West New Britain
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New BritainPalm Oil Ltd2010
Rationale for Transaction
At time of IPO: Key strategic objective to double •its plantation area within 7 to 8 years
30,000
35,000
0
15,000
20,000
25,000
2004 2006
Hec
tare
s
2005 2007
10,000
5,000
40,000
45,000
Mature Palm Plantations
2008
55,000
60,000
50,000
65,000
70,000
2009 2009NBPOL &
CTP combined
CAGR: 18.9%
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West New Britain, Kumbango refinery and mill
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New BritainPalm Oil Ltd2010
Output of CPO
CTP will add an immediate •increase in CPO production of c. 160,000 tonnes per year
An approximate increase in output •of 50%
This increase will allow synergies •and economies to be delivered in shipping and raw material purchase
Geographic focus and specialism •maintained to leverage management’s track record
Potential to meet RSPO •guidelines of the new production
Crude Palm Oil (CPO) Produced
2004 20062005 20082007
200,000
240,000
80,000
120,000
160,000
Tonn
es C
PO
40,000
280,000
320,000
360,000
400,000
440,000
2009
CAGR: 20.6%
480,000
520,000
2009NBPOL &
CTP combined
0
560,000
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The controlled cultivation of oil palms in the nursery contributes to NBPOL’s successful replanting programme and relatively young oil palm age profile
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New BritainPalm Oil Ltd2010
Valuation Metrics
$21,400
$8,670
CTP NBPOL
25,000
20,000
15,000
10,000
5,000
0
EV ($) / Hectare
EV
($) /
Ha
1.6
1.4
1.2
1.0
0.8
0.6
0.4
0.2
0NBPOL - Pre-transaction NBPOL - Post-transaction
0.4
1.6
Net Debt / EBITDA
Net
Deb
t / E
BIT
DA
1.8
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The acquisition of CTP will allow the enlarged group to make use of larger ships and benefit from economies of scale in shipping product to its EU market
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New BritainPalm Oil Ltd2010
Synergy & Improvement Areas
Fertiliser application strategies •
Shipping optimisation •
Workforce management •
Infrastructure improvement, especially related to estate access•
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Dami Oil Palm Research Station is one of the world´s largest producer of oil palm seeds, and is proud of its success in improving the genetic stock
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New BritainPalm Oil Ltd2010
Other Key Metrics of CTP
c. 8,000 staff •
5 oil mills •
3 export terminals •
>15,000 hectares of outgrowers•
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NBPOL and RAIL maintain a stock of cattle (9,729 hectares of own cattle growing pasture) utilising Palm Kernel Expeller, a high protein co-product of palm oil production
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New BritainPalm Oil Ltd2010
NBPOL Today
Palm Oil Sales
Seed Sales
Cattle Production
Revenue contribution
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• 7 Oil mills in Group (6 in operation, 1 in
construction)• 2 Refineries
Infrastructure• c.60,000 tonnes / oil storage capacity• Trucking transport fleet• Housing• Pumping facilities
• 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
• Integrated with the palm oil plantation• Important for the protein constrained
local community
RAIL• 1 sugar mill• 1 Ethanol plant• 13,500 Head of cattle
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The Liverpool refinery is now nearing completion, staffing is in place and preparations are being made for the first CPO shipment, which is currently in transit
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New BritainPalm Oil Ltd2010
Other Asset Developments
Construction nearing completion •
Staffing in place •
Commence operations during spring •2010
Key contract won with United Biscuits •
Captures greater share of margin for •NBPOL
First palm oil refinery in the EU to have a •fully segregated supply chain
For the first time being able to guarantee •fully traceable, sustainable palm oil direct from the plantation to the EU consumer
Acquired in October 2008 •
c.30,000 hectares of land •
c. 4,500 hectares of oil palm •
8,120 hectares of sugar cane •
Oil palm planting and optimisation •continues
Extremely high priced sugar market •creating a positive outlook
Ramu Agri Industries Ltd (RAIL)Liverpool Refinery
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Breeding programme at DAMI
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New BritainPalm Oil Ltd2010
CPO Pricing Update
400
450
500
550
600
650
700
750
800
850
900
950
1,000
1,050
1,100
1,150
1,200
1,250
1,300
1,350
1,400
1,450
1,500
J-06 A-06 J-06 O-06 J-07 A-07 J-07 O-07 J-08 A-08 J-08 O-08 J-09 A-09 J-09 O-09 J-10
CPO CIF Rotterdam, 2nd month forward, US$/T
CPO Pricing Update
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Delivering FFB to Numundo Mill, West New Britain
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New BritainPalm Oil Ltd2010
CPO Price Data
1,600
1,400
1,200
1,000
800
600
400
200
0J-06 A-06 J-06 O-06 J-07 A-07 J-07 O-07 J-08 A-08 J-08 O-08 J-09 A-09 J-09 O-09 J-10
0
100
200
300
400
500
600
700
CPO CIF Rotterdam (US$/MT)NBPOL share price (GBp)
NB
POL
shar
e pr
ice
(GB
p)
CPO
$ /
MT
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Empty Fruit Bunch is re-applied to the field to supplement fertiliser application after processing
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New BritainPalm Oil Ltd2010
Production Growth
1,100,000
1,200,000
800,000
900,000
1,000,000
2004 2006
Tonn
es F
FB
2005
700,000
Total Fresh Fruit Bunch (FFB) Processed
1,300,000
2007600,000
2008
1,400,000
1,500,000
2009
CAGR: 10.3%
2004 20062005 20082007
260,000
280,000
200,000
220,000
240,000
Tonn
es C
PO
180,000
Crude Palm Oil (CPO) Produced
300,000
320,000
340,000
360,000
380,000
2009
CAGR: 12.3%
30,000
31,000
23,000
24,000
27,000
28,000
29,000
2004 2006
Hec
tare
s
2005 2007
26,000
25,000
32,000
33,000
Mature Palm Plantations
2008
35,000
36,000
34,000
37,000
38,000
39,000
2009
40,000
41,000
CAGR:
9.7
%
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Inter-cropping of oil palm with cattle pasture
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New BritainPalm Oil Ltd2010
Sustainability
NBPOL has been instrumental in developing• the Roundtable on Sustainable Palm Oil (www.RSPO.org)
The RSPO has over 300 members including WWF, the Zoological Society of London and Oxfam•
NBPOL is the first RSPO member to be accredited as sustainable across its entire operation by an RSPO • accredited auditor - BSI
NBPOL has control over its harvesting, milling, refining, transportation and shipping, it can trace individual • shipments to the EU back to source
With the UK refinery it has a unique fully sustainable and traceable supply chain to the EU •
Potential future margin enhancement through sustainability and traceability credentials •
Key sales contracts achieved with Ferrero Group and United Biscuits, driven partly by NBPOL’s sustainability • and traceability credentials
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Social awareness, support, and interaction is vital in PNG, especially as NBPOL provides housing, healthcare, and education to a large proportion of its approximate 11,500 permanent employees.
NBPOL takes its responsibilities to its employees extremely seriously and recognises its obligations to the workforce which rely heavily on the company
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New BritainPalm Oil Ltd2010
Conclusions
Solid year of performance and output growth•
Palm oil market moving toward sustainability and traceability as key aspects - NBPOL is ideally placed •
Presenting a transformational acquisition adding over 50% to NBPOL’s established plantation area •
Maintaining a stable balance sheet without equity dilution•
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The information contained in this document is for information only. No representations or warranties, express or implied, •are given by the Company or any person connected with the Company as to the fairness, accuracy or completeness of the information or opinions contained in this document, any presentation made in conjunction herewith or the accompanying materials and no liability is accepted in respect thereof, to the extent permitted by law.
To the fullest extent permitted by law, none of the Company, Akur Partners LLP or any other party or any of their respective •subsidiary undertakings or affiliates or any of such person’s officers or employees, advisors or other representatives, accepts any liability whatsoever (whether in negligence or otherwise) arising directly or indirectly from the use of this document.
This document is being furnished to you on a confidential basis and may not be disclosed, reproduced or redistributed, in •whole or in part, by any medium or in any form to any other person for any purpose without the Company’s prior written consent. You shall treat and safeguard as strictly private and confidential all information contained in this document and take all reasonable steps to preserve such confidentiality. You shall not use this document or the information contained therein in any manner detrimental to the Company.
This document has been prepared for information purposes only and should not be relied upon, or form the basis for any •decision or action, by any person.
This document contains forward-looking statements that involve substantial risks and uncertainties and actual results and •development may differ materially from those expressed or implied by these statements by a variety of factors.
By accepting this document and attending the presentation you agree to be bound by the foregoing limitations. •
24 February 2010
Disclaimer
New BritainPalm Oil Ltd2010
New BritainPalm Oil Ltd2010 www.nbpol.com.pg
Phone: +44 (0)20 7472 5936
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