UNAUDITED Q1 FY2015 ANALYSTS’ BRIEFING 27 May 2015
Contents OVERVIEW 3 FINANCIAL HIGHLIGHTS 8 PROJECT STATUS 17 KEY TAKEWAYS 20 1/21
OVERVIEW
Present Domestic and International Footprint International Independent Water Production & Power Generation Malaysian Independent Power Generation Az Zour South Combined Cycle Power Plant 1,200.0 MW (1) Merak Coal-Fired Prai Power Power Plant Plant Souk Tleta IWP Hidd IWPP 120.0 MW (1) 350.0 MW 71,400 m 3 /day 164,000 m 3 /day 55 tonnes/hour 372.0 MW SEV Power Plant 1,221.6 MW Al Ghubrah IWP ( under construction ) GB3 Power Plant 85,950 m 3 /day Shuaibah Phase 3 480.0 MW Expansion IWP 17,850 m 3 /day Macarthur Wind Shuaibah Phase 3 Farm Kapar Power IWPP 210.0 MW Plant 105,600 m 3 /day 968.0 MW 108.0 MW Port Dickson Domestic Power Plant 7,249.4 MW Total power generating capacity 436.4 MW International 2,249.0 MW (2) Domestic Tanjung Bin Power Plant 5,346.0 MW Total effective power generating capacity International 1,890.0 MW Tanjung Bin Energy Power Plant 690.0 MW (2) (under construction) 1,000.0 MW 1,640,000 m 3 /day Total water production capacity Note: 358,850 m 3 /day Total effective water production capacity Based on the Company’s effective capacity (1) Provides Operations & Maintenance (“O&M”) services only and is not based on effective capacity O&M’s business presence (2) Excludes Az Zour South Combined Cycle Power Plant and Merak Coal-Fired Power Plant 3/21
Our Targets 2015 2020 International International 10% 30% Local Local 90% 70% Total: 6,036 MW nett Total: 10,000 MW nett 9,700 generation capacity 5,826 MW current generation capacity 300 MW Renewable 210 MW Renewable 530,000 m 3 /day Desalination 358,850m 3 /day Desalination O&M: O&M: 4,000 MW 2,220 MW 2,800,000 m 3 /day 1,421,000 m 3 /day 4/21
Further Expand Power Generation Platform in Malaysia Total Portfolio Growth Target – Effective Power Generation Capacity (Domestic & International) (MW) 10,000 7,036 6,036 (1) Current 2016E 2020E Domestic International Expansion Opportunities: 1 Tanjung Bin Energy Power Plant expected to commence commercial operations in 2016 Participate in a 1,300 MW co-generation power plant that forms part of PETRONAS’ Refinery and Petrochemicals Integrated 2 Development (“RAPID”) in Southern Johor (2) 3 Exploring possibility of new 1,000 MW coal-fired plant at Tanjung Bin site to export power to Singapore Exploring posibility of a new 1,000 MW coal-fired power plant in North Peninsular Malaysia to export power to Thailand, to capitalise on 4 the substantial energy demand-supply gap in Thailand Existing land site of ~400 hectares with ready access to transmission infrastructure to accommodate expansion and building of 5 additional plants Leverage on land bank with long remaining land leases life with ~47 years (3) for further capacity expansion or contract extension 6 beyond life of existing PPAs 7 Pursue additional investments or acquisitions with attractive returns Notes: (1) As at 20 March 2015. (2) In the midst of discussions. (3) Average lease life. 5/21
Grow International Presence in Power Generation and Water Production International Expansion Focus 1 Cooperate with strategic partners in international projects Lower-cost financing Specific expertise Competitive advantage in securing projects Risk mitigation 2 Focus on stable, developed and mature energy markets Established merchant power markets Stable regulatory, legal and power market structure UK Entry for new participants relatively seamless Develop capabilities to become merchant power operator MENA 3 Emerging countries with high GDP-growth and expanding energy markets and Turkey Substantial energy demand-supply gap Shortfall in domestic investments in the energy sector Southeast Malaysia-based companies have been successful in international expansion Asia and in these countries Australia South Africa 4 Leverage experience and track record Consolidate market share in existing countries of operation Increase market share in target countries Pursue greenfield, brownfield projects and acquisition opportunities Pursue additional investments on selective basis Profitable projects with geographical diversification Investments to expand portfolio without significant capital commitments Financed through combination of internally generated funds and/or borrowings 6/21
FINANCIAL HIGHLIGHTS
Key Financial Parameters Q1 FY2015 Q1 FY2014 Increments Q4 FY2014 RM’mil RM’mil RM’mil Revenue 1,347 1,238 1,482 9% Profit from operating activities 335 227 388 48% PBT 176 45 202 291% PATMI 104 3 113 3,367% EBITDA 630 489 674 29% EPS * 2.90 sen 0.07 sen 3.15 sen 3,833% • * EPS calculated based on 3,582,080,000 number of share after completion of the Pre IPO exercise : Bonus Issue and Subdivision of Shares excluding the conversion of RCPS 8/21
Financial Results Better results largely due to the improved performance of Tanjung Bin power plant Q1 FY2015 Q1 FY2014 Variance Variance RM’mil RM’mil RM’mil % Revenue 1,347 1,238 109 9% Cost of sales (898) (870) (28) (3%) Gross profit 449 368 81 22% Other income 8 4 4 100% Administrative expenses (81) (62) (19) (31%) Operating expenses (41) (83) 42 51% Profit from operating activities 335 227 108 48% Interest income 45 39 6 15% Finance costs (214) (229) 15 7% Share of associates and JV’s profit 10 8 2 25% Profit before taxation 176 45 131 291% Income tax expenses (55) (29) (26) (90%) Profit for the period 121 16 105 656% Profit attributable to: Owners of the Company 104 3 101 3,367% Non-controlling interests 17 13 4 31% 9/21
Revenue Mix Total revenue Power generation revenue comprises: RM1.22b RM1.12b RM1.24b RM1.35b Q1 FY2015 Q1 FY2014 Capacity Payment Capacity Payment RM573m RM484m 9% 10% 7% 8% 10% 10% 12% 33% 38% 43% 42% RM1.22b 90% 90% RM1.12b RM1,215 Energy Payment Energy Payment 1% RM642m RM632m 6% 5% 13% 5% 18% 30% Q1 FY2015 Q1 FY2014 71% Power Generation Others 51% TBP SEV GB3 PPSB PDP 10/21
Impact of IC Interpretation 4 • The adoption of IC interpretation 4 has resulted in the PPAs of our subsidiaries to be accounted for as operating leases. • Revenue from capacity payments are recognised on a straight-line basis over the term of the relevant PPA. • Previously, these PPAs were accounted for as normal sale and purchase contracts. Q1 FY2015 Q1 FY2014 Actual capacity Actual capacity payments Revenue payments Revenue received recognised Variance received recognised Variance RM'mil RM'mil RM'mil RM'mil RM'mil RM'mil TBP 314 244 70 274 205 69 SEV 146 186 (40) 148 186 (38) PPSB 41 38 3 41 38 3 GB3 42 57 (15) 66 56 10 PDP * 49 49 - - - - 592 574 18 529 485 44 Lease Accounting (IC4) impact in prior years RM2,400 RM180mil Actual capacity RM290mil RM2,200 payments received Revenue recognised RM2,000 RM1,800 FY2012 FY2013 FY2014 * Acquisition of PD Power was completed in Q2 2014. 11/21
Breakdown of Costs Q1 FY2015 Q1 FY2014 17% 18% Finance Cost Finance Cost 3% RM214m RM229m 7% Admin RM81m Admin 7% RM62m 5% Cost of Sales Cost of Sales RM870m RM898m 70% 73% Major cost components: : Fuel costs, depreciation and amortisation of intangible assets. Cost of sales : Interest expense for project financing Finance costs : Staff-related costs, professional fees, contributions and corporate social responsibility activities & Admin depreciation of office equipment and furniture and fittings : insurance premiums, cess fund created by the Energy Commission, sales taxes and duties, Other licence fees, coal handling fees and amortisation and impairment of intangible assets relating to an associate Note : We would potentially incur the majority of this year’s maintenance costs in Q2, and the same will be reflected in our Q2 results. 12/21
Debt Analysis Debt profile by foreign currency Debt profile by interest rate terms RM1.9b Floating 10% RM1.2b rate 6% RM0.3b 2% Fixed rate RM17.0b RM15.9b 94% 88% RM USD AUD Q1 FY2015 Pro Forma Post IPO Gearing Ratio 4.4x 2.8x Net Gearing Ratio 3.6x 2.1x Weighted Average Cost of Debt 5.51% 5.43% 13/21
Capital Expenditure (RM) 556m 11m 51m Tanjung Bin Energy Plant C-Inspection Cost (major) Others Majority of the capital expenditure were related to the construction and 494m development of the Tanjung Bin Energy Power Plant which is mostly funded by 157m non-recourse borrowings. 5m 66m 86m Q1 FY2015 Q1 FY2014 14/21
Sustainable Long Term Return To Shareholders Dividend Payout Target FY2015: - 100.0% 92.4% • Dividend payout ratio of not less than 70% of 75.2% 80.0% consolidated profit to 300 shareholders 257 60.0% RM’mil 150 149 40.0% 150 INTERIM DIVIDEND Interim single-tier dividend of 20.0% 3 sen per share for FY2015 Books closure date :12 June 2015 Payment date: 8 July 2015 - 0.0% FY2013 FY2014 Interim 2015 Ordinary shares dividend Payout ratio Dividend Payout Ratio is calculated by dividing total ordinary dividends declared in respect of the financial year by the profit attributable to the owners of our Company of the respective financial years. 2014 consolidated profit is higher, hence the drop in % 15/21
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