Kaset Thai International Sugar Corporation PCL 5 September 2019 Page 1 of 20
Important Notice This presentation is confidential. This presentation is not a prospectus. This presentation does not constitute or form part of any offer for sales or solicitation of any offer to buy any securities nor shall it or any part of it form the basis of or be relied on in connection with any contract or commitment whatsoever. This presentation has been prepared for the purpose of providing certain individuals with business, financial and other information concerning Kaset Thai International Sugar Corporation Company Limited (“KTIS”) The information contained in this presentation is intended solely for your personal reference only. If you are not an intended recipient, you must not read, disclose, copy, circulate, retain, distribute or take any action in reliance upon this material. This presentation is not intended to substitute your own analysis and investigation, and should not be considered a recommendation to any recipient of this presentation. Some statements contained herein are forward-looking statements identified by the use of forward- looking terminology such as “may” , “will” , “expect” , “anticipate”, “intend” , “estimate” , “continue”, “plan” or ot her similar words, which are subject to various risks and uncertainties. These statements include statements with respect to KTIS’s corpo rate plans, strategies and beliefs and other statements that are not historical facts. This presentation is prepared based on the assumptions and beliefs of KTIS’s management in light of the information currently available to KTIS involving risks and unce rtainties which may cause the actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. Nothing in this presentation is, or shall be relied on as promise or representation of KTIS as to the future. For more information, contact : IR@ktisgroup.com Page 2 of 20
Agenda 9M-2019 Operating Results Sugar & Bio Industry Trends Page 3 of 20
9M-2019 Operating Results Page 4 of 20
Summary of Operating Results -S1 Total Revenues Total Expenses Net Profit Income Tax Benefits Income tax expenses and others Net Profit (Loss) Unit: Baht million Other Income Financial Costs Sales & Services Revenues Selling & Admin. Expenses Cost of Sales & Services 14,218 218 14,849 849 15,000 22 22 15,000 10,768 768 251 251 10,749 749 294 294 2,634 634 70 70 331 331 228 228 10,000 10,000 2,341 341 13,901 901 19 19 200 10,437 437 5,000 5,000 11,964 964 8,110 110 (631) 1) 0 0 9M-20 9M 2018 18 9M-20 9M 2019 19 9M-20 9M 2018 18 9M 9M-20 2019 19 -800 (Oct.’17 - Jun.’18) (Oct’18 - Jun.’19) (Oct’17 - Jun.’18) (Oct’18 - Jun.’19) 9M-20 -2018 9M-20 -2019 (Oct’17 - Jun.’18) (Oct’18 - Jun.’19) Total revenues decreased due to lower revenues from sugar business, despite slight increases in revenue from bio business and other income Total expenses decreased due to decreases in cost of sales & services, SG&A and financial costs Net profit was higher than last year Page 5 of 20
Summary of Operating Results -S2 Sales & Service Revenues Gross Profit & Margin Unit: Baht million 4.2% GP - Sugar GPM - Sugar 6.3% GP - Bio GPM - Bio 8.3% Sugar 2,327 327 Paper Pulp 1,937 937 8.1% 40% 9M-2018 Ethanol 36.2 .2% 1,371 371 33.4 .4% Electricity 1,500 1,253 253 Others 20% 73.0% 14.4 .4% 955 955 6.7% 684 684 5.6% 0 0% 9M 9M-20 2018 18 9M-20 9M 2019 19 10.2% (Oct’17 - Jun.’18) (Oct’18 - Jun.’19) Sugar Paper Pulp 11.6% 9M-2019 Ethanol Electricity 9.0% 63.7% Others Page 6 of 20
Sugar Revenue Sugar Revenue Sugar Sales Volume (‘000 Ton) & Price (Baht) Unit: Baht million Sugar - Domestic Domestic Sales Volume Domestic Selling Price * Sugar - International International Sales Volume International Selling Price 10,153 153 1,000 12,000 Molasses 797 797 18,4 ,488 457 457 18,000 16,9 ,908 6,644 644 530 530 8,000 516 516 6,557 557 500 614 614 13,000 3,867 867 393 393 4,000 10,6 ,684 9,83 839 3,140 140 184 184 137 137 2,261 261 0 8,000 0 9M 9M-20 2018 18 9M-20 9M 2019 19 9M 9M-20 2018 18 9M 9M-20 2019 19 (Oct’17 - Jun.’18) (Oct’18 - Jun.’19) (Oct’17 - Jun.’18) (Oct’18 - Jun.’19) Molasses Sales Volume (‘000 Ton) & Price (Baht) Production 2017/18 2018/19 Molasses Sales Volume Molasses Selling Price 200 Thailand Cane 134.9 131.0 MMT 4,000 Sugar 147.1 145.8 MBg 3,792 792 Molasses 5.5 5.9 MMT 3,112 112 100 KTIS Cane 11.6 9.9 MMT 3,000 Sugar 11.9 10.3 MBg 121 121 166 166 Molasses 0.5 0.5 MMT 0 2,000 9M 9M-20 2018 18 9M 9M-20 2019 19 Source: Office of the Cane and Sugar Board, 31 May 2019 (Oct’17 - Jun.’18) (Oct’18 - Jun.’19) Note: * white & refined sugar selling price only Page 7 of 20
Pulp Revenue Pulp Revenue Sales Volume (ton) & Selling Price (Baht) Pulp - Domestic Domestic Sales Volume Domestic Selling Price Unit: Baht million Pulp - International International Sales Volume International Selling Price 1,131 131 51,551 551 25,000 1,200 935 935 39,952 952 45,000 23,6 ,619 800 23,3 ,346 42,199 199 927 927 30,000 700 700 21,8 ,895 29,964 964 400 21,9 ,960 15,000 236 236 9,988 988 205 205 9,352 352 0 0 20,000 9M-20 -2018 9M-20 -2019 9M-20 -2018 9M-20 -2019 (Oct’17 - Jun.’18) (Oct’18 - Jun.’19) (Oct’17 - Jun.’18) (Oct’18 - Jun.’19) Pulp revenue decreased as a result of lower international pulp sales volume, despite higher average pulp selling price Page 8 of 20
Ethanol Revenue Ethanol Revenue Sales Volume (‘000 Liter) & Selling Price (Baht) Ethanol - Domestic Domestic Sales Volume Domestic Selling Price Unit: Baht million Ethanol - International International Sales Volume International Selling Price 54,902 902 60,000 30 1,500 48,164 164 1,215 215 1,159 159 40,000 25 1,000 24.0 .06 22.1 .12 20,000 20 500 0 0 15 9M-20 -2018 9M-20 -2019 9M-20 -2018 9M-20 -2019 (Oct’17 - Jun.’18) (Oct’18 - Jun.’19) (Oct’17 - Jun.’18) (Oct’18 - Jun.’19) Ethanol revenue increased due to higher sales volume, despite lower average ethanol selling price Page 9 of 20
Electricity Revenue Electricity Revenue Electricity Supplied (MWH) & Selling Price (Baht) Electricity Revenue Electricity Supplied Selling Price Unit: Baht million 3.20 1,200 300,000 3.10 3.10 3.04 800 200,000 342,49 498 3.00 288,48 484 1,062 062 877 877 400 100,000 2.90 0 0 2.80 9M 9M-20 2018 18 9M 9M-20 2019 19 9M 9M-20 2018 18 9M-20 9M 2019 19 (Oct’17 - Jun.’18) (Oct’18 - Jun.’19) (Oct’17 - Jun.’18) (Oct’18 - Jun.’19) Revenue from electricity business increased, as a result of both higher electricity sold and higher average electricity selling price per unit Page 10 of 20
Sugar & Bio Industry Trends Page 11 of 20
Positive Factors for Sugar The global balance in 2019/20 will switch from surplus 1.1mil MT in 2018/19 to deficit -5.8mil MT due to global consumption growth and a large fall in Indian production. (If realized, this would be the largest deficit since 2008/09) CS Brazil Production until 1H Aug has been worse than last crop. Sugarcane 350mil MT (+0.03%) / Sugar 15.5mil MT (-6.34%) Sugar Mix 35.38% (-0.92%pts) / ATR 130.89kg/cane (-3.92%) Net short position of fund/spec is approaching to latest record and can do short cover in the next few months. Page 12 of 20
Negative Factors for Sugar The record delivery against July No.11 and August No.5 contract. Thailand featured unusually heavily in both expiries, delivering 0.6mil MT of raws and 0.8mil MT of white/refined. The BRL has fallen to BRL4.1/USD from BRL3.72/USD at the middle of July following larger-than-expected interest rate cuts. Macro uncertainty caused by the US-China trade dispute. The macro uncertainty is also putting pressure WTI oil Prices, which remain in the USD 50-60/bbl range. Page 13 of 20
World Sugar Price – 10 Years Source: Reuters Page 14 of 20
World Sugar Price – 5 Years Source: Reuters Page 15 of 20
Production Surplus/Deficit (2019-2020) World Sugar Supply / Demand Balance Source: LMC Page 16 of 20
Brazilian Real / USD vs. ICE No.11 Source: Reuters Page 17 of 20
BRL and THB / USD (2013-2019) 40 5 4.5 4 35 3.5 3 30 2.5 2 1.5 25 USD_THB 1 USD_BRL 0.5 20 0 01-Jan-13 01-Jan-14 01-Jan-15 01-Jan-16 01-Jan-17 01-Jan-18 01-Jan-19 Source: Investing.com Page 18 of 20
Price Comparison (2013 – 2019) Eucalyptus Pulp & Bagasse Pulp 450 550 650 750 850 Jan-13 Apr-13 Jul-13 Oct-13 Baga Bagasse ( Euc Eucal Jan-14 alyptus Apr-14 ptus ( e (CF Jul-14 CFR) (CIF Oct-14 CIF) R) Jan-15 Apr-15 Jul-15 Oct-15 Jan-16 Apr-16 Jul-16 Oct-16 Jan-17 Apr-17 Jul-17 Oct-17 Jan-18 Apr-18 Source: RISI + Company Jul-18 Oct-18 Jan-19 Apr-19 Jul-19 Page 19 of 20
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