Financial Year Ending 31 December 2019 Results Announcement Second Quarter ended 30 June 2019 30 August 2019
2 Financial Highlights Q2 FY2019 earnings continued to be negatively impacted by weak CPO & PK prices but cushioned by lower finance costs and lower net tax 1 1 Q2 FY2019 1H FY2019 in RM’mn (YoY %) Revenue 2,875 5,881 QE Jun 2018: 3,084 (-7%) 6ME Jun 2018: 6,743 (-13%) 1 181 PBIT QE Jun 2018: 189 (-99%) 6ME Jun 2018: 578 (-69%) 27 101 PATAMI QE Jun 2018: 30 (-10%) 6ME Jun 2018: 278 (-64%) Attributable to owners of the Company 18 92 Recurring PATAMI QE Jun 2018: 313 (-94%) 6ME Jun 2018: 536 (-83%) 9 9 Non-Recurring PATAMI QE Jun 2018: -283 (>-100%) 6ME Jun 2018: -257 (>-100%) 0.4 1.5 Basic EPS 6ME Jun 2018: 4.1 (-64%) QE Jun 2018: 0.4 (-11%) ( RM’sen ) 0.3 1.3 Recurring EPS QE Jun 2018: 4.6 (-94%) 6ME Jun 2018: 7.9 (-83%) 0.1 0.1 Non-Recurring EPS QE Jun 2018: -4.2 (>+100%) 6ME Jun 2018: -3.8 (>+100%) Note: (1) Due to the change in the financial year, the performance of the current second quarter ended 30 June 2019 (Q2 FY2019) is not comparable with the second quarter of the previous financial year ended 30 June 2018, instead the performance is comparable against the quarter ended 30 June 2018 i.e. the corresponding quarter of the previous year (QE June 2018). The first half of the financial year ending 31 December 2019 (1H FY2019) is comparable again the six months ended 30 June 2018 (6ME June 2018).
3 Financial Performance by Segment Weaker Q2 FY2019 Upstream performance was largely driven by the decline in CPO & PK realised prices as well as lower sales volume Q2 FY2019 1H FY2019 Recurring PBIT in RM’mn (YoY %) TOTAL PBIT -64 19 Upstream QE Jun 2018: 403 (>-100%) 6ME Jun 2018: 686 (-97%) QE Jun 2018 Q2 FY2019 6ME Jun 2018 1H FY2019 43 156 1 181 189 578 Upstream Malaysia QE Jun 2018: 243 (-82%) 6ME Jun 2018: 496 (-69%) -99% YoY -69% YoY -2 -11 Upstream Indonesia QE Jun 2018: 92 (>-100%) 6ME Jun 2018: 103 (>-100%) -76 -95 Upstream PNG/SI QE Jun 2018: 77 (>-100%) 6ME Jun 2018: 115 (>-100%) 833 -20 -40 Upstream Liberia QE Jun 2018: -9 (>-100%) 6ME Jun 2018: -28 (-43%) 472 51 136 172 9 Downstream QE Jun 2018: 68 (-25%) 6ME Jun 2018: 133 (+2%) -8 9 -255 -283 5 17 Others * QE Jun 2018: 1 (>+100%) 6ME Jun 2018: 14 (+21%) Recurring Non-Recurring * Others refers to Sime Darby Agri-Bio Sdn Bhd, Sime Darby Research Sdn Bhd, Sime Darby Technology Sdn Bhd, Sime Darby Biotech Lab Sdn Bhd, Sime Darby Seeds Sdn Bhd, as well as investment holding companies, associates and JVs
4 4 Recurring Profits Lower YoY recurring profits primarily due to lower CPO and PK realised prices and sales volume, exacerbated by lower contribution from other Upstream operations 1H FY2019 vs 6ME Jun 2018 +52 -142 +129 -12 -32 -35 -46 +3 -578 Cost to Changes in P B I T Net positive customer Lower income Higher Liberia Others Lower stocks impact from ( -2% YoY) from Seeds & Downstream contribution 833 FFB production other results from Sugar (+4% YoY) & Upstream (+2% YoY) 796 172 OER (+0.25% operations YoY) • Lower CPO prices realised (-16% YoY) 6ME Jun 2018 1H FY2019 Recurring • Lower PK prices Recurring PBIT PBIT Recurring realised (-41% YoY) PBIT PATA M I +42 -107 +99 -34 -12 -25 +57 -31 +2 -435 Cost to Changes in Net positive Liberia Lower income customer Lower Higher Net Others stocks impact from 536 from Seeds & 561 ( -2% YoY) contribution Downstream favourable FFB production 92 other from Sugar results tax benefit* (+4% YoY) & OER Upstream (+2% YoY) (+0.25% YoY) operations 6ME Jun 2018 Recurring • Lower CPO prices 1H FY2019 PATAMI realised (-16% YoY) Recurring PATAMI Recurring • Lower PK prices PATAMI realised (-41% YoY) Note:* Tax benefit from the disposal of a subsidiary, net of an incentive of lower tax rate in June 2018
5 5 Recurring Profits Lower YoY recurring profits primarily due to lower CPO and PK realised prices and sales volume, exacerbated by lower contribution from other Upstream operations Q2 FY2019 vs QE Jun 2018 +23 -12 -123 Cost to Net positive -11 -36 -18 P B I T -24 customer impact from -17 -262 ( +4% YoY) Changes in FFB production Liberia Lower income 472 Others stocks ( flat YoY) & OER Lower from Seeds & Lower (+0.16% YoY) 278 Downstream other contribution results Upstream -8 from Sugar (-25% YoY) operations • Lower CPO prices QE Jun 2018 Q2 FY2019 Recurring realised (-15% YoY) Recurring PBIT PBIT Recurring • Lower PK prices PBIT realised (-39% YoY) PATA M I +19 -8 -93 -17 +69 -11 Net positive -26 Cost to -197 -19 -12 impact from customer Lower Changes in 313 FFB production Liberia ( +4% YoY) Lower Tax benefit Lower income contribution stocks 232 Others 18 ( flat YoY) & OER Downstream from from Seeds & from Sugar (+0.16% YoY) results disposal of a other QE Jun 2018 (-25% YoY) subsidiary Recurring • Lower CPO prices Q2 FY2019 Upstream PATAMI realised (-15% YoY) Recurring PATAMI operations Recurring • Lower PK prices PATAMI realised (-39% YoY)
6 6 Recurring Profits Lower Q2 FY2019 QoQ recurring profits amid challenging business environment Q2 FY2019 vs Q1 FY2019 -52 -55 P B I T -20 180 -9 Net impact +21 -34 -29 from lower -8 Cost to 31 -10 Changes in FFB Lower Lower income Others customer stocks production (- Downstream from Seeds & Recurring • Lower CPO prices Q2 FY2019 ( +9% QoQ) Q1 FY2019 Lower 4% QoQ) & results other Upstream PBIT realised (+0.4% QoQ) contribution Recurring Recurring PBIT OER (-0.6% (-40% QoQ) • Lower PK prices operations from Sugar PBIT QoQ) realised (-15% QoQ) PATA M I -38 -8 18 -39 +30 -20 +36 -25 74 +30 46 -15 -7 Net impact Higher • Lower CPO from lower Q1 FY2019 Lower Cost to Tax benefit Q2 FY2019 Others Recurring Lower income Changes in Lower capitalisation prices realised FFB contribution customer from disposal Recurring PATAMI from Seeds & Recurring stocks Downstream (+0.4% QoQ) of interest production (- from Sugar ( +9% QoQ) of a other Upstream PATAMI results PATAMI • Lower PK prices 4% QoQ) & subsidiary operations (-40% QoQ) realised (-15% OER (-0.6% QoQ) QoQ)
7 Non-Recurring Profits A gain on disposal in PT Mitra Austral Sejahtera (PT MAS) this quarter against impairment losses in the previous corresponding period Q2 QE 1H 6ME YoY YoY FY2019 Jun 2018 FY2019 Jun 2018 in RM’mn Non-Recurring PBIT 9 -283 9 -255 >+100% >+100% - Gain on disposal of 100% equity stake in - 9 9 PT MAS, Indonesia - - -112 -112 Impairment on assets in Liberia -157 - - -157 Impairment of investment in Verdezyne Inc - Gain of sale of land in Melaka - - 118 Impairment of rubber asset in Indonesia - - - -68 Others -14 - - -36 Non-Recurring PATAMI 9 -283 9 -257 >+100% >+100%
8 Borrowings & Gearing Ratios Higher borrowings arising from lower cash generated from operations amid weak CPO & PK prices, as well as the appreciation of foreign currencies 40% 43% 46% 46% 48% Gross RM533mn -RM468mn -RM186mn Gearing 1 NET CASH GENERATED NET CASH USED IN NET CASH USED IN FROM OPERATING INVESTING ACTIVITIES FINANCING ACTIVITIES Net 38% 40% 43% 43% 46% ACTIVITIES Gearing 2 Borrowings Borrowings as at 30 Jun 2019 increased by 6,489 7,159 7,297 7,472 7,819 (in RM’mn ) RM347mn compared to 31 Mar 2019 attributable to: Net loans raised totaling RM234mn due to lower 9,000 cash generated from operations 8,000 Borrowings increased due to the appreciation of 7,000 6,000 USD and EUR against RM by 2% and 3%, 5,000 respectively resulting in an impact of RM111mn 4,000 3,000 Finance costs in Q2 FY2019 reduced by RM15mn 2,000 (34% YoY) due to: 1,000 - Capitalisation of higher borrowing costs As at 30 Jun 2018 As at 30 Sep 2018 As at 31 Dec 2018 As at 31 Mar 2019 As at 30 Jun 2019 (RM34mn) on immature planting costs and capital WIP, which compensated the higher Borrowings (RM'mn) Capitalised Immature Planting Costs & Capital Work In Progress (RM'mn) interest expense (-RM19mn) 1 Gross Gearing is based on Total Borrowings divided by Total Equity 2 Net Gearing is based on Total Borrowings less Bank Balances, Deposits & Cash divided by Total Equity
9 Credit Ratings Moody’s reaffirmed SD Plantation’s credit ratings – A testament to the Group’s financial stability AAA, Stable Baa1, Stable Affirmed on 14 Sep’18 Affirmed on 3 Jul’19 “ SD Plantation's Baa1 ratings reflect: 1) its position as the largest palm oil producer globally by planted area, 2) Moody's expectation that SDP will maintain efficient and profitable operations that span across the palm oil value BBB+, Stable chain , and 3) SDP maintains prudent financial policies, including a Affirmed on 15 Nov’18 conservative approach to further investments. ”
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