ANALYST MEETING Friday 17 th May 2019
DISCLAIMER This presentation has been prepared exclusively for the purpose of the analyst meeting held on this 17 th May 2019 concerning Alteo Limited (the “Company”). This presentation contains only summary information and does not purport to be comprehensive. Partic ipants are recommended to read the Company’s latest published condensed unaudited financial statements available on the Company’s website (www.alteogroup.com). The Company has used all reasonable endeavours to provide accurate information in this presentation. In the event of a discrepancy between this presentation and the published condensed unaudited financial statements, the latter shall prevail. However, no responsibility whatsoever shall be accepted by the Company, its shareholders, directors, and officers for any prejudice resulting from reliance upon the information contained in this presentation. This presentation contains statements related to our future business and financial performance and future events or developments involving Alteo that may constitute “forward -looking statements” . These statements may be identified by words such as "expect", "look forward to", "anticipate", "intend", "plan", "believe", "seek", "estimate", "will", "project" or words of similar meaning. Such forward-looking statements are by their nature based on the current expectations and certain assumptions of Alteo's management, and are, therefore, subject to certain risks and uncertainties. A variety of factors, many of which are beyond Alteo's control, may affect Alteo's operations, performance, business strategy and results and could cause the actual results, performance or achievements of Alteo to be materially different from any future results, performance or achievements that may be expressed or implied by such forward-looking statements or anticipated on the basis of historical trends. Alteo neither intends, nor assumes any obligation, to publicly or otherwise update or revise these forward-looking statements in light of developments which differ from those anticipated. Alteo makes no representation whatsoever about the opinion or statements of any analyst or other third party. Alteo does not monitor or control the content of third party opinions or statements and does not endorse or accept any responsibility for the content or the use of any such opinion or statement.
TABLE OF CONTENTS GROUP FINANCIAL REVIEW MARKETS OUTLOOK
GROUP FINANCIAL REVIEW
ANALYST MEETING GROUP PROFITABILITY REVIEW Better sales achieved INCOME STATEMENT FOR THE PERIOD ENDED MARCH 31 by Kenyan sugar operations and Rs’ M March 2019 March 2018 % Change Property cluster Turnover 6,827 6,250 9% Normalised EBITDA 1,715 1,774 -3% Excludes crop 2017 insurance EBITDA 1,836 1,977 -7% compensation and PAT 472 618 -24% gains on sale of land PAT attributable to owners 47 113 -58% of parent Lower gains on sale of land and EPS (Rs) 0.15 0.36 -58% higher finance costs for East DPS (Rs) 0.32 0.35 -9% African sugar operations 5
ANALYST MEETING GROUP PROFITABILITY REVIEW PAT BY CLUSTER (in Rs’ M) 800 677 Sugar : Drop in results mainly driven by lower 700 profitability on sales of imported sugar by TPC 600 406 500 Energy : Lower profitability with only one plant 400 operating in the third quarter following the ceasing of 300 CEL’s operations in December 2018 200 93 81 100 Property : Results continued to improve with higher 0 -100 Sugar Energy Property property sales revenue recognition (43% works -16 -200 -152 completion on 8 villas and the sale of 4 serviced plots 2019 2018 signed)
ANALYST MEETING GROUP PROFITABILITY REVIEW SUGAR CLUSTER PROFIT (in Rs’ M) Sugar (Rs M) 2019 2018 Reported PAT (251) (155) 1120 1200 Non recurring items 123 200 1000 780 800 Normalised PAT (374) (355) 600 400 Mauritius : Lower price environment together with 200 lower volume produced. Prior year’s losses included 0 substantially higher negative movements on FV off Mauritius Tanzania Kenya -200 biological assets -155 -123 -251 -400 -288 2019 2018 Tanzania : Higher volume sold but lower margins on sales of imported sugar by TPC Kenya : Better price environment together with higher cane availability contributed to improved results. Losses include finance costs on acquisition debt contracted by holding company (SML)
ANALYST MEETING GROUP DEBT REVIEW GEARING (in Rs’ M) NET DEBT BY COMPANY (in Rs’ M) 41 25,000 30% 19,469 19,291 19,454 25% 19,226 19,035 20,000 24% 25% 944 22% 21% 12% 20% 1290 15,000 15% 558 10,000 10% 6,222 6,155 5,567 5,061 SML Sucriere des Mascareignes 5,000 2,778 5% TSC Transmara Sugar Co Ltd 1309 Alteo - 0% Alteo Limited 1653 Jun 2015 Jun-16 Jun-17 Jun-18 Mar-19 AAL Alteo Agri Ltd Net Debt Equity Gearing 360 AML Alteo Milling Ltd Anahita Estates Ltd Aestl Group gearing stood at 24% at Others March 31 2019 Rs1.5bn issue under new Note Programme is mostly for refinancing of short term facilities
ANALYST MEETING GROUP CASH FLOW REVIEW CASH FLOWS FOR THE PERIOD ENDED MARCH 31 July 1 2018 Cashflows from Capital expenditure Sale of assets and Net borrowings Dividend paid March 31 2019 operations investment 419 (409) 454 442 (389) (771) (1,288) Mostly proceeds from sale of land by Alteo Agri 9
MARKETS
ANALYST MEETING MARKETS EU MARKET SUGAR PRICES – MAURITIUS (ex MSS) Rs’000 2012 20 17.6 2013 18 15.8 15.6 2014 16 13.0 14 12.7 2015 11 12 2016 10 8.8 * * * 2017 * 8 2018 • Excludes support measures from Government GLOBAL SUGAR SURPLUS/ DEFICIT Million’ tons 7.8 7.6 6.6 6.0 2.2 1.7 0.6 3.3 -2.8 -3.7 -5.1 -10.8
OUTLOOK
ANALYST MEETING SUGAR OUTLOOK FINANCIAL YEAR • Mauritian sugar operations will continue to be affected by adverse price conditions on the EU market, however … • Crops 2017 & 2018 have been declared event years and insurance compensations will mitigate losses • Sugar cluster assets in Mauritius are currently being tested for impairment – any impairment booked in Q4 will impact EPS • The enhanced cane availability and improved average domestic price are expected to continue to be beneficial to the Kenyan operations in Q4 • In Tanzania, sales of own produced sugar should catch up with last year’s volume in Q4 as stock is cleared
ANALYST MEETING SUGAR OUTLOOK BEYOND • Early indications that crop 2019 in Mauritius will be better than 2018 and prices picking up on the EU market • Restructuring of Mauritian agri operations is ongoing – Abandonment of unviable manual fields as from crop 2019 to drive down cost of production and accelerate shift to 100% mechanisation • Mitigating lower throughput for the mill with cane from Medine factory area and additional special sugar production • Continued efforts in Kenya to further develop area under cane, optimize factory capacity and achieve economies of scale • Gap sugar import in Tanzania reduced from 130Tk to 38Tk • Distillery project at TPC progressing well – validation expected by December 2019
ANALYST MEETING ENERGY OUTLOOK FINANCIAL YEAR • Energy cluster’s year end results are expected to be lower than last year with less contribution from CEL and higher depreciation at AEnL BEYOND • AEnL’s power purchase agreement renewed for another 3 years • Negotiations with CEB for new power plant project progressing well
ANALYST MEETING PROPERTY OUTLOOK FINANCIAL YEAR • Improving trend expected in Q4 as construction of villas sold off plan progress and sales of several serviced plots are signed BEYOND • On target to achieve the completion of Anahita within the next 3 years. Debt of Rs900m repaid and some Rs700m up streamed to Alteo • Strategic master planning exercise has been completed, priority development nodes earmarked (Old Beau Champ factory zone and Beau Rivage site)
Q & A
THANK YOU Alteo Limited – Head Office Vivéa Business Park, St Pierre, 81430, Mauritius Phone: (230) 402 9050 Fax: (230) 432 0729 info@alteogroup.com
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