new britain palm oil limited - nbpol new britain palm oil limited financial performance 2008 2007...
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New Britain Palm Oil Limited
July 2009
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New Britain Palm Oil Limited
New Britain Palm Oil (NBPOL)
New entrants face a 3 - 4 year lead-in time until the production of Oil Palm fruit
• Largeplantationcompany(over46,000hectaresplanted),producingpalmoil,foundedin1967
• Totallandbankofapprox85,000ha
• Historyofprofitabilityanddividendgrowth
• EstablishedEUcustomerbase
• Fullverticalintegrationfocusedonsustainabilityandtraceability
• Oneofthehighestoilyieldingcompaniesintheindustry
• AkeycompanytothePapuaNewGuineaeconomy
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New plantings and more mature palms
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New Britain Palm Oil Limited
Financial PerformanceFinancial Performance
2008 2007 2006USD’000 USD’000 USD’000
Revenue 352,219 224,954 133,764EBITDA 124,170 94,493 41,349Profit before tax 106,282 81,882 29,295Profit after tax 76,433 59,182 21,430Profit attributable to shareholders 74,835 58,767 21,617Earnings per share 0.517 0,41 0,18
Years ended 31 December
EXCLUDING IAS 41
Thesefiguresareunaudited
3monthsended31March2009
3monthsended31March2008
Sales (USD (m)) 73.8 82.7PBT (excluding IAS 41) USD (m)) 27.6 36.7CPO Produced (Mt) 87,690 73,648PKO Produced (Mt) 7,755 7,116Average CPO price per Mt achieved (USD) 747 954
1st Quarter Highlights
(Note:USDexchangeratesasat31March2009and31March2008respectively)
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View across NBPOL plantation showing Kumbango refinery
Kumbango refinery
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New Britain Palm Oil Limited
Interim Results
Highlights:
• 1stQuartercrop22%aheadof‘08
• Extractionrateupto22.89%(22.65%:‘08)eventhoughwetweather
• Palmpriceaveragein1stquarter$747vs$954
• CostofImportsdramaticallydown
• Newmillcommencedbuilding
• 2MethaneCaptureplantsbeingconstructed
• Cashreserveslessbankborrowingsof$54.6mat31.03.09
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Collecting Oil Palm Fruit (Fresh Fruit Bunch, FFB)
Delivering FFB to Numundo Mill
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New Britain Palm Oil Limited
• Palm production over past 10 years expanded byhectaragenotyieldimprovement
• Landbecomingscarcerandmorecontroversial• NBPOLtargetingacombinedoilyieldof30mtFFBand
30%extraction(ietargetof9mtofoil/hectare)• Credit squeeze halted land expansion for most of
industry• Hedging (ie smoothing income) allows NBPOL to
continuetoexpandonschedule• Newinvestmentsandgrowthallfundable
Palm Oil
Source:USDA
Crop composition of land used globally to produce vegetable oils
Composition of global vegetable oil production
Soya
Sunseed
Rape
Palm
62%17%
15%6%
37%
16%11%
36%
0 0.50 1.00 1.50 2.00 2.50 3.00 3.50
GloballyachievedOilyield(tonnes/Ha)
Indicativeoilyields
4.00 4.50
PalmOil(WorldAverage)
Rape
Sun
SoyaSource:USDA/NBPOL
5.00 5.50 6.00
PalmOil(NBPOL)
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Numundo Mill, FFB processing capacity of approximately 80 tonnes per hour
Mosa Mill, FFB processing capacity of approximately 60 tonnes per hour
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New Britain Palm Oil Limited
Market Update
• CurrentCPOCIFRotterdamPrice- AMJ09US$575.00 JAS09US$572.50 OND09US$572.50
• MalaysianpalmoilstockasatendJan091.83mlnMT,downfrom2.27mlnMTasatendNov08
• Chinarapeseedcropaffectedduetopoorweather.Chinaimportingmorepalmandsoya
• Argentinesoybeancropreducedduetopoorweatherto42-45mlnMT–2007/846.50mlnMT
• Palmstillcheapestoilvscompetitiveoils
• Productionstillgrowinginpalm–credit/economicsituationreducingrapeseedandsoyproduction
• Highinputcostshavehadanimpactonfertiliserapplication
• Salestodate: 2009156850MTatUS$780.00approx(40%) 201021000MTatUS$621.21average
Source:Reuters
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Kumbango refinery, built in 2003 (shown in foreground) produces a range of value added products
Palm kernel oil production facilities
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New Britain Palm Oil Limited
29-06-2007
27-07-2007
24-08-2007
21-09-2007
19-10-2007
16-11-2007
14-12-2007
11-01-2008
08-02-2008
07-03-2008
04-04-2008
02-05-2008
30-05-2008
30-06-2008
25-07-2008
22-08-2008
19-09-2008
17-10-2008
14-11-2008
12-12-2008
09-01-2009
(SourceSBOCBOTClosesReutersEuropeanVegoilCloses)
Commodity Price Movements
1400.00
1000.00
800.00
600.00
400.00
200.00
0.00
-200.00
1600.00
1400.00
1200.00
1000.00
800.00
600.00
400.00
200.00
0.00
CPO CIF RDM & CBOT SBO & ULSD NY US$ PMT SPREAD
US$
PMT
US$
PMT
CBOTSBOUD$PMT
CPOCIFUS$PMT+/-TOCBOTSBO
CPOCIFRDMUS$PMT
-400.00
1200.00
ULSDFuturesNYHarbour
CPOCIFRDMUS$PMT+/-TOULSDFuturesNYHarbour
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Delivery of FFB
Sterilisation of FFB
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New Britain Palm Oil LimitedSoft Commodity Market in Flux:
New Demand, Lower Inventories
Endingstocksas%ofannualusage
5%
10%
15%
20%
25%
30%
35%
40%
89/90
World Stock / Usage Ratios Wheat Corn
0% 90/91
91/92
92/93
93/94
94/95
95/96
96/97
97/98
98/99
99/00
00/01
01/02
02/03
03/04
04/05
05/06
06/07
07/084 Main Oils
Source:USDANov2008
08/09(f)
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Palm oil storage and infrastructure at NBPOL
Palm oil storage at NBPOL
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New Britain Palm Oil Limited
Source:ReutersEuropeanVegoilcloses
Palm Oil Price
• Palmoil (asallcommodities) ispricedonthemarginofsupply/demand
• Demand is resi l ient asincreasingly urbanised Asiandemandcontinues
• Government tariffs benefittingpalm
• New palm oil supply takes 3-4yearsfromplantingtocommercialharvesting
• Averagepriceachieved toDec2007US$686
• Averagepriceachieved toDec2008US$926
WEIGHTED AVERAGE 2nd & 3rd POSITIONS WEEKLY CLOSES CPO CIF RDM US$ PMT
US$P
MT
1600.00
1400.00
1200.00
1000.00
800.00
600.00
400.00
200.00
0.00
12-01-2007
09-02-2007
09-03-2007
05-04-2007
04-05-2007
01-06-2007
29-06-2007
27-07-2007
24-08-2007
21-09-2007
19-10-2007
16-11-2007
14-12-2007
11-01-2008
08-02-2008
07-03-2008
04-04-2008
02-05-2008
30-05-2008
30-06-2008
25-07-2008
22-08-2008
19-09-2008
17-10-2008
14-11-2008
12-12-2008
09-01-2009
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Kimbe port, showing NBPOL bulk storage infrastructure
Loading a bulk carrier from the Kimbe port terminal
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New Britain Palm Oil Limited
• Papua New Guinea (PNG) is aCommonwealthcountry
• Independentanddemocraticsince1975
• Standard & Poor´s rating of PNGlong-termforeigncurrency israted`B+´withastableoutlook
• Standard&Poor´s long-term localcurrencyratingis`BB-´
• The Intelligence Unit of TheEconomist rates overall PNG riska`C´similartoSouthAfrica,ChinaandBrazil
• There isnohistoryofgovernmentinterventionintheexportingofpalmoilorinsettinglocalprices
• PNG’seconomy isstill strongwithGDPhigherthanpopulationgrowth
NBPOL´s Area of Operation
MainareaofNBPOLoperation
RamuAgri-IndustriesLtd
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Numundo beef cattle ranch, integrated with palm oil plantations. NBPOL currently has c.4,000 head of cattle
Dami Oil Palm Research Station is one of the world´s largest producer of oil palm seeds
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New Britain Palm Oil Limited
PalmOilSales
SeedSales
CattleProduction
Revenue contribution
Plantations • Landbank85,000ha• Morethan50,000hectaresunderNBPOL
cultivation• Morethan25,000maturehectarescultivated
bysmall-holderssupplyingNBPOL
Milling and Refining• 6OilmillsinGroup• 1RefineryinNewBritain
Infrastructure• c.60,000tonnes/oilstoragecapacity• Truckingtransportfleet• Housing• Pumpingfacilities
NBPOL Today
• Highly respected plant breedingresearchanddevelopment
• Vitalforsuccessofwiderbusiness• Growing customer base around the
world• NBPOL isoneof theworld’s largest
privateseedproducers
• c.4,000headofbeefcattlein2006• Integrated with the palm oil
plantation• Importantfortheproteinconstrained
localcommunity
RAI• 1sugarmill• 1Ethanolplant• 13,500Headofcattle
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NBPOL invests in housing, schools and hospitals for its employees
Employee housing at Mosa
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New Britain Palm Oil Limited
Production Growth
1,100,000
1,200,000
800,000
900,000
1,000,000
2004 2006
TonnesFFB
2005
700,000
Total Fresh Fruit Bunch (FFB) Processed1,300,000
2007600,000
2008
140,0002004 20062005 20082007
260,000
280,000
200,000
220,000
240,000
TonnesCPO
180,000
160,000
Crude Palm Oil (CPO) Produced
300,000
320,00030,000
31,000
23,000
24,000
27,000
28,000
29,000
2004 2006
Hectares
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
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Latest photo of refinery
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New Britain Palm Oil Limited
UK Refinery
• A 170,000mt pa capacity refinery costing£18 million funded from the Company’scash reserveswith start-up first quarter ofFY2010
• Planning permission granted and workcommenced
• Will create a dedicated supply chain fromtheCompany’splantationstothecustomer’sdoor–fromseedtofinishedproduct
• WillgivetheCompanyaccesstothevalue-addedendoftheEUpalmoilmarket
• Will provide the potential for marginenhancement through the ability to supplyhighqualityoilwhichissustainable,traceableandRSPOcertified
• Assists with phasing of logistics to largervesselstherebyreducingpertonnerates
Tate & Lyle storage
Pipes from Tate’s to ships Ship berth
Derby Road Site
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NBPOL plants all of its palms by ´identified progenies´
Nursery beds at Mosa
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New Britain Palm Oil Limited
Energy Self Sufficiency
• 5mwbiomasspowerplantcommissionedatKumbango-willreducedieselrequirementsatthissitebyapprox1millionlitresp.a.
• CurrentlybuildingMethaneCaptureattwomillsiteswithafurthertwotofollowin2010
-duetocompleteend09forfirsttwomills -willgenerateapprox+2mwperunit -plustotalcarboncreditsofapprox170,000CER(all4units)
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Coral reefs close to NBPOL plantations
Aerial view of New Britain coastline
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New Britain Palm Oil Limited
• NBPOLhasbeeninstrumentalinbringingintoexistenceaninternationalorganisationseekingtoimprovethesustainabilitycredentialsofthePalmOilIndustry,theRoundtableonSustainablePalmOil(www.RSPO.org)
• TheRSPOhasover300members representingproducers,consumers, the foodandchemical industriesand19NGOorganisations(includingWWF,theZoologicalSocietyofLondonandOxfam)
• TheCompanyisthefirstRSPOmembertobeaccreditedassustainableacrossitsentireoperationinNewGuineabyanRSPOaccreditedauditor-BSI
• NBPOLhascontroloveritsharvesting,milling,refining,transportationandshipping,henceitcantraceindividualshipmentstotheEUbacktosource,vitaltoprovingthesustainabilityofitsoil
• NBPOLhasbeencertifiedtotheISO14001standardforenvironmentalprotectionandmanagement
• Potentialfuturemarginenhancementthroughsustainabilityandtraceabilitycredentials
Sustainability
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NBPOL receives tax credits from the PNG government for infrastructure projects
NBPOL has an active road building programme supported by tax credits
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New Britain Palm Oil Limited
Short Term
• AccelerateplantingprogrammeinNewBritain• AccelerateplantingprogrammeintheSolomon
Islands• Increasecapacityofmills• Increasestoragecapacityatportsideby50%• Constructnewbridgingandroadinfrastructure• Increasecapacityofpalmkernelcrushingmill• Developnewbiomassfiredpowerplant• Developcarboncreditprojects• Seekappropriateacquisitionsoflandandrelated
businesses
Longer Term
• Plantanddevelopadditionalhectarage• Potentiallygrowbyacquisition• Buildthreenewmills,Malilimi,Numundo2,
Silovuti• Seekappropriateacquisitionsoflandandother
businesses
Short and Long Term Aims
2007
40,000
45,000
50,000
20,000
25,000
30,000
35,000
2008 2009 2010 2011
Five Year Projection of NBPOL Planted Area
Hec
tare
s
65,000
55,000
60,000
Production output expected to double within 7/8 years
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Methane Capture being built at one of the 2 sites currently in development during 2009
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New Britain Palm Oil Limited
Summary
• Companywith40yearhistoryofcontinuedgrowth
• Consistentlyprofitableanddividendpaying
• Oneoftheworld’slowestcostproducersofpalmoil
• Expandingannuallywithcontinuedopportunityforsignificantexpansion
• AstrongEUbasedcustomerbase
• Commitmenttosustainabilityandproducttraceability
• Strong,secureproductionlocatedinastabledemocraticcountry
New Britain Palm Oil Limited
www.nbpol.com.pg