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www.goldenagri.com.sg
Company PresentationSeptember 2020
DISCLAIMER
2
This presentation has been prepared by Golden Agri-Resources Ltd. (“GAR” or “Company”) forinformational purposes, and may contain projections and forward looking statements that reflect theCompany’s current views with respect to future events and financial performance. These views are basedon current assumptions which are subject to various risks and which may change over time. No assurancecan be given that future events will occur, that projections will be achieved, or that the Company’sassumptions are correct. Actual results may differ materially from those projected. A prospective investormust make its own independent decision regarding investment in securities.
Opinions expressed herein reflect the judgement of the Company as of the date of this presentation andmay be subject to change without notice if the Company becomes aware of any information, whetherspecific to the Company, its business, or in general, which may have a material impact on any suchopinions.
The information is current only as of its date and shall not, under any circumstances, create anyimplication that the information contained therein is correct as of any time subsequent to the date thereofor that there has been no change in the financial condition or affairs of GAR since such date. Thispresentation may be updated from time to time and there is no undertaking by GAR to post any suchamendments or supplements on this presentation.
The Company will not be responsible for any consequences resulting from the use of this presentation aswell as the reliance upon any opinion or statement contained herein or for any omission.
© Golden Agri-Resources Ltd. All rights reserved.
CONTENTS
3
Corporate Overview 41
Key Competitive Strengths 72
Growth Strategy and Outlook 143
Financial Performance 174
CORPORATE OVERVIEW
OVERVIEW OF GAR
5
• Listed on SGX since 1999
• A leading Indonesian plantation group with integrated operations for the production of a wide range of value added palm-based products
• Broad presence in destination markets with refining facilities in China and India, sales representative offices and ex-tank operations in many large consuming countries
Planted Area (as of 30 Jun 2020)1 499,563 ha
Output of Palm Products (CPO and PK)
1H 2020 1,219,000 MT
FY 2019 2,913,000 MT
Plantation ProfileFinancial Statistics (in US$ million)
Notes:1. Including plasma2. Earnings before tax, non-controlling interests, interest on borrowings, depreciation and amortisation, net gain/loss from changes in fair value of biological assets,
foreign exchange gain/loss and exceptional items. EBITDA in 1H 2020 and FY 2019 include net fair value gain/loss on financial assets in accordance with IFRS 9 of
US$14 million loss and US$214 million gain, respectively.
1H 2020 FY 2019
Revenue 3,391 6,432
EBITDA2 189 697
Underlying Profit3 (11) 272
Equity 4,234 4,505
3. Net profit attributable to owners of the Company, excluding net gain/loss from changes in fair value of biological assets, depreciation of bearer plants, exceptional items, foreign exchange gain/loss, and deferred tax income/expense
LEADING INDONESIAN PLANTATION GROUP WITH INTEGRATED OPERATIONS
6
Notes:1. Data as of 30 June 20202. Including plasma3. Including operations under JV
Collaboration with CIRAD
Research & Development
Seedling
Dami Mas Seed Garden & SMART Biotechnology Center
Plantation & Harvesting
Planted area1,2
Total 500k haNucleus 395k haPlasma 105k ha
Mature area2
462k ha
FFB production2
4.08mn MT(1H 2020)9.87mn MT (FY 2019)
CPO Milling
No of mills46
Capacity1
13.42mn MT FFB p.a.
Basic Products
Production973k MT(1H 2020)2.31mn MT (FY 2019)
Production246k MT(1H 2020)607k MT (FY 2019)
No of plants6Capacity1
4.98mn tpa
Capacity1,3
440k tpa
CPO
Palm Kernel
Refining
Kernel Crushing
Oleo-chemicals
Processing
Branded & Unbranded Cooking Oil
Margarine
Specialty Fats
Biodiesel/FAME
PK Oil
PK Meal
Fatty Acids
Fatty Alcohol
Glycerine
Soap Noodles
No of plants9
Capacity1
1.76mn tpa
Capacity1
600k tpa
Processed Products
Biodiesel
KEY COMPETITIVE STRENGTHS
500
287 266337
213 188
594
177 213
338
0
200
400
600
GAR Astra Agro Wilmar IndofoodAgri
FirstResources
Bumitama Sime Darby IOI KLK Felda
CORE PALM PLANTATION BUSINESS LEADING IN SCALE
8
Largest plantation group in Indonesia and third largest globally in CPO production
Notes: 1. Based on latest full fiscal year data2. Felda is the largest CPO producer with about 70% of its FFB processed sourced from plasma farmers and other parties
Largest plantation group in Indonesia and second largest globally in planted area
Indonesia Malaysia
Indonesia Malaysia
Note: Based on latest publicly available information (including plasma, except Felda)
‘000 MT
‘000 ha
2.306
1.6541.903
840 8121.035
2.653
7571.023
2.820
0
1000
2000
3000
GAR Astra Agro Wilmar IndofoodAgri
FirstResources
Bumitama Sime Darby IOI KLK Felda
MANAGEMENT EXPERTISE DELIVERS HIGH PRODUCTION YIELDS
9
21,5 18,7 20,1 15,7 17,0 19,1 20,5 23,0 22,4 16,9
4,6
3,8 3,9
3,4
3,9
4,3 4,3
4,9 4,9
3,5
3,0
3,5
4,0
4,5
5,0
15,0
18,0
21,0
24,0
GAR Astra Agro Wilmar IndofoodAgri
FirstResources
Bumitama Sime Darby IOI KLK Felda
FFB CPO
4,6
3,3
0,8 0,8 0,5
0,0
1,0
2,0
3,0
4,0
5,0
Palm OilGAR
Palm OilIndustry
RapeseedOil
SunflowerOil
SoybeanOil
Palm is the highest yielding vegetable oil
GAR’s plantation yield is amongst the highest
Notes:• Based on latest full fiscal year data• CPO yield is calculated from FFB yield/ha multiplied by extraction rate
Source: Oil World and Company. Data as per 2019
GAR Age Profile
Note:Data as of 30 June 2020, include plasma. Average age is 17 years
15%8%
6%
42%29%
GAR is one of the lowest cost producers with industry-leading efficiencies
FFB y
ield
-M
T/h
a
MT/ha
Indonesia Malaysia
CPO
yie
ld -
MT/h
a
37.799
32.279
211.467144.274
73.744
Immature (0-3 years)
Young (4-6 years)
Prime 1 (7-18 years)
Prime 2 (19-25 years)
Old (>25 years)
UNRIVALLED TECHNOLOGY PLATFORM ENHANCING COMPETITIVENESS
Precision Agriculture
• Monitor and manage widely spread operations efficiently through War Room, a state-
of-the-art proprietary information technology system with block-by-block Performance
Analysis (@30 ha)
• Accurate fertiliser programme with dosage based on cost/benefit analysis using leaf
sampling
Continually taking initiatives in technological innovation to leapfrog upstream to Smart Plantation across the value chain
10
Research and Development
Research in latest plant breeding
and biotechnology results in tissue
culture planting materials - Eka 1
and Eka 2 - that can double our long-term yield
Automation
Hardware mechanisation of tools
and equipment used in farming to
enhance productivity
Digitalisation
Turn manual processes to digital
using the latest mobile technology
as enabler, e.g. eFACT
AI and Machine Learning
Use Artificial Intelligence to make
insightful decision, predict
outcome, drive efficiencies and
improve logistical capability
STRONG POSITION ACROSS THE DOWNSTREAM VALUE CHAINWITH GLOBAL DESTINATION PRESENCE
• Broad range of products includingFood, Industrial products and Biodiesel
• Focusing on sales of higher value palm based derivative products
• Operating the largest palm oil based charterthrough partnership
• Broad globalcoverage includingMiddle East and India
• Increasing presence in destination markets
• Destination refiningin China and India,and ex-tank operations in many countries
Origination of Raw Materials
Processing & Product Customisation
Logistic Excellence
Sourcing with increasing traceability:• Owned estates• Third parties
Destination Market Expertise
Our end-to-end ability in managing across the downstream value chain will enable us to better respond to supply chain disruption and monetiseproduction
11
TOWARDS RESPONSIBLE PALM OIL PRODUCTION
12
Managing COVID-19
• Employee and community safety are top priority• Complying with all government regulations wherever we
operate• Palm oil sector is strategic sector - all our facilities continue to
operate• Helping to protect employees and community e.g. mask-
making project • Supporting 40 Alternative Livelihood programmes to help
boost and maintain community resilience
On track to achieve 100% TTP for palm supply chain at end 2020
• Full TTP for nearly 84% of palm supply chain • 273 3rd-party mills reported full TTP • COVID-19 may affect timetable for TTP this year • Engaging with suppliers remotely and encouraging self-
assessment
Managing Fire and Haze
• Launched the Rumbun and Jungle Friends storybook to educate children about dangers of forest fires
• Part of long-term efforts to stem forest fires and haze • No reduction in commitment despite COVID-19
EMPOWERING COMMUNITIES
13
Employment and Infrastructure• GAR provides employment for about 171,100 people in Indonesia
• 70,200 permanent employees, 30,600 fixed-term employees and 70,300 smallholders• We promote small and micro enterprises near our operation areas• Builds and maintains public infrastructures and facilities
• Roads, bridges, places of worship and sporting facilities
Education and Healthcare
The palm oil industry is effective in creating jobs and alleviating poverty
Note: Data as per 2019
GROWTH STRATEGY AND OUTLOOK
GROWTH STRATEGY AND OUTLOOK
15
Focusing on higher value derivative
products, increasing presence and expertise in global destination markets
Expanding biodiesel facilities to support
Indonesian policy on biofuel mandate
GAR aims to be at the forefront of the evolving technological trend by intensifying strategic efforts to transform its business and build new competitive edge
Accelerated replanting with latest-generation planting
materials to transform yield curve
Embracing innovative ways of working to
achieve a higher level of efficiency and
productivity
Plantations and Palm Oil Mills
Palm, Laurics
and Others
• GAR remains confident in the robust long-term supply and demand fundamentals for palm oil supported by its high versatility (including biodiesel) and lowest cost of production
• The impact from the COVID-19 pandemic is expected to be short term depending on the severity and length of the outbreak
INDONESIA BIODIESEL
16
Indonesia Biodiesel Consumptionin million kltr
Indonesia growing biodiesel mixture mandate is a major catalyst to the industry
• Global feedstock for biodiesel is estimated to decrease by an estimated 3% in 2020 to 42.9 million MT from 45.7 million in 2019
• However, palm oil usage for feedstock continues to expand with a market share of almost 40% in 2020 from 31% in 2016
Source: Oil World, Ministry of Energy and Mineral Resources, and Aprobi
Feedstock Use for Biodiesel in 2020F
Soya oil25%
Palm oil39%
Rapeseed oil14%
Others22%
2,6
4,0
6,4
4,3
8,8
2017A 2018A 2019A 6M20A 2020F
• Indonesian B30 mandate for 2020 was allocated at 9.6mn kltr. However, the realisation is expected to be at around 8.8mn kltr due to lower consumption
• The increase of export levy to sustain biodiesel subsidy shows the Indonesian government’s commitment towards its biodiesel mandate policy
FINANCIAL PERFORMANCE
CONSOLIDATED FINANCIAL PERFORMANCE
18
Notes:1. Earnings before tax, non-controlling interests, interest on borrowings, depreciation and amortisation, net gain/loss from changes in fair value of biological assets,
foreign exchange gain/loss and exceptional items. EBITDA includes net fair value gain/loss on financial assets in accordance with IFRS 9 of US$14 million loss in 1H 2020, US$214 million gain in 2019 and US$132 million in 2018.
2. Net profit/loss attributable to owners of the Company, excluding net effect of gain/loss from changes in fair value of biological assets, depreciation of bearer plants, exceptional items, foreign exchange gain/loss, and deferred tax income/expense
3. Net of tax and/or non-controlling interests
• First half 2020 performance affected by reinstatement of CPO export levy with better second quarter results as supply chain disruption has gradually recovered
• Strong upstream business mitigated downstream business challenges
• Higher net loss in 1H 2020 impacted by foreign exchange loss and deferred tax expense, which are mainly non cash
(in US$ million) 1H 2020 1H 2019 2019 2018
Revenue 3,391 3,167 6,432 7,167
Gross Profit 389 345 831 1,007
Gross Profit Margin 11% 11% 13% 14%
EBITDA1 189 198 697 573
EBITDA margin 6% 6% 11% 8%
Underlying Profit/(Loss)2 (11) (15) 272 181
Foreign Exchange Gain/(Loss)3 (45) 3 38 (19)
Deferred Tax Income/(Expense)3 (31) 3 (19) (50)
Net Profit/(Loss) attributable to owners of the Company (157) (46) 194 (2)
661
27%
19%
11.72
1,423
(482)
1,915
1,01
261
25%
19%
1.27
155
(56)
202
140
-
561
34%
18%
3.38
411
(114
491
363
-
401
22%
17%
5.25
607
21
618
406
SEGMENTAL RESULTSPlantations and Palm Oil Mills
19
Strong improvement in 1H 2020 performance supported by the rebound in CPO market prices
Lower plantation output in 1H 2020 due to dry weather conditions last year and the replanting programme
Revenue (US$ million) 625 574 9% 1,324 1,451
EBITDA (US$ million) 132 97 36% 299 391
EBITDA margin 21% 17% 4% 23% 27%
CPO FOB Price (US$/MT) 616 496 24% 523 565
FFB Production (‘000 tonnes) 4,084 4,455 -8% 9,871 10,525Nucleus 3,215 3,444 -7% 7,617 8,112Plasma 869 1,011 -14% 2,254 2,413
FFB Yield (tonnes/ha) 8.8 9.4 -6% 21.5 22.5
Palm Product Output (‘000 tonnes) 1,219 1,293 -6% 2,913 3,049CPO 973 1,026 -5% 2,306 2,436PK 246 267 -8% 607 613
Oil Extraction Rate 21.6% 21.3% 0.3% 21.5% 21.9%Kernel Extraction Rate 5.5% 5.6% -0.1% 5.7% 5.5%
Palm Product Yield (tonnes/ha) 2.4 2.5 -5% 5.8 6.2
1H 2020 1H 2019 YoY FY 2019 FY 2018
Note: EBITDA includes allocated net fair value gain/loss on financial assets (IFRS 9) of US$3 million loss in 1H 2020, US$47 million gain in FY2019 and US$23 million gain in FY2018
OIL PALM PLANTATIONS
20
360.172 356.800 394.982 392.836
101.592 101.757104.581 104.751
30-Jun-20 31-Dec-19 30-Jun-20 31-Dec-19
Nucleus Plasma
37.79932.279
211.467144.274
73.744
Immature (0-3 years) Young (4-6 years)
Prime 1 (7-18 years) Prime 2 (19-25 years)
Old (>25 years)
Continued long-term productivity growth through replanting and technological innovation
42%
8%15%
29%
6%
• Immature and younger estates use newer-generation higher-yielding seeds for continued long-term production growth
• Accelerated replanting to around 9,900 ha in 1H 2020 Notes:
1. Total planted area including plasma 2. Average age of plantations, including plasma, is 17 years
Mature Area - ha Planted Area - ha
458,557497,587
461,764499,563
Age Profile as of 30 Jun 2020
SEGMENTAL RESULTSPalm, Laurics and Others
21
Revenue (US$ million) 3,382 3,151 7% 6,392 7,102
Sales Volume (‘000 tonnes) 4,971 5,370 -7% 10,843 10,210
EBITDA (US$ million) 58 100 -42% 398 184
EBITDA margin 1.7% 3.2% -1.5% 6.2% 2.6%
1H 2020 1H 2019 YoY FY 2019 FY2018
1H 2020 earnings were impacted by the COVID-19 outbreak with gradual improvement in the second quarter of 2020
• 1H 2020 sales volume affected by logistics issues following COVID-19 lockdown with gradual improvement in the second quarter 2020
• This also resulted in a sudden significant CPO price decline in February, further impacting our earnings
• Indonesia biodiesel is still the major catalyst to the industry with realisation of B30 programme
Notes:1. This segment refers to processing and merchandising of palm and oilseed based products i.e. bulk, branded, oleo-chemicals and other vegetable oils, as well as
production and distribution of other consumer products mainly food and beverages2. EBITDA includes allocated net fair value gain/loss on financial assets in accordance with IFRS 9 of US$11 million loss in 1H 2020, US$166 million gain in FY2019 and
US$108 million gain in FY2018
FINANCIAL POSITION
22
US$ million 30-Jun-20 31-Dec-19 Change
Total Assets 8,482 8,779 -3%
Cash and short-term investments 832 784 6%
Fixed assets1 3,636 3,720 -2%
Total Liabilities 4,248 4,274 -1%
Net Debt2 1,608 1,573 2%
Interest bearing debt 3,157 3,144 0.4%
Cash, short-term investments and liquid working capital3 1,549 1,571 -1%
Total Equity 4,234 4,505 -6%
Net Debt2/Total Equity 0.38x 0.35x
Net Debt2/Total Assets 0.19x 0.18x
Net Debt2/EBITDA4 2.34x 2.26x
EBITDA/Interest4 4.52x 4.23x
Notes:1. Includes Property, Plant and Equipment, Bearer Plants, Right-of-use Assets
and Investment Properties2. Interest bearing debt less cash, short-term investments and liquid working
capital
3. Liquid working capital is trade receivables, inventories (excluding consumables), deposits and advances to suppliers less trade payables and advances from customers
4. Calculated based on the last four quarters figures
Golden-agri-resources-ltd@GAR_Sinarmas@sinarmas_agriSinar Mas Agribusiness and Food
Golden Agri-Resources Ltdc/o 108 Pasir Panjang Road#06-00 Golden Agri PlazaSingapore 118535
Telephone : +65 65900800Facsimile : +65 65900887
www.goldenagri.com.sg
Contact Person : Richard Fung [email protected]
If you need further information, please contact: