cb industrial product holding berhad · cb industrial product holding berhad equipping palm oil...

CB Industrial Product Holding Berhad Equipping Palm Oil Industries Around The World

Investor Presentation

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Adjusted CBIP Price Bursa Plantation Index

Our History and Background

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History and Background

Established in 1980s and listed on the Main Board

of Bursa Malaysia Securities Berhad in 2005

Primarily involved in 3 business segments:

Palm oil engineering;

Special purpose vehicle retrofitting; and

Oil palm plantation and milling

The first publicly-listed player in the palm oil

engineering sector globally

Joint-holders of the Modipalm Continuous

Sterilization milling system patent together with the

Malaysian Palm Oil Board

Markets are centralised in Indonesia, Malaysia and

the African/Central American region

Historical Share Performance

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Adjusted CBIP Price Adjusted CBIP Volume

RM CBIP Shares

RM Index Point

Aug 13 Nov 16

Aug 13 Nov 16

CAGR: -3.79%

CAGR: 13.12%

323

522 590 601

554

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100

200

300

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500

600

700

Key Group Financial Highlights

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(RM million)

Revenue

FY11 FY12 FY13 FY14 FY15

Profit Before Taxation

(RM million)

71

99

126

107

140

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40

60

80

100

120

140

160


Shareholders’ Funds

(RM million)

381

484 530

599 669

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200

300

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500

600

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800


PATAMI

(RM million)

105

240

98 91 94

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100

150

200

250

300


0.46

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0.05 0.04 0.03

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20,000

25,000


Borrowings Gross Gearing Ratio

Notes:

^ After adjusting for bonus issue of 134,445,974 amd 272,008,473 new

ordinary shares

º Includes special dividend of 15 sen per share

⃰ Includes special dividend of 4 sen per share

Key Group Financial Highlights

4

RM’000 Times

Low Gearing Ratio Attractive Dividend Payout

• Funding flexibility

• Capability to undertake strategic acquisitions

and/or organic expansion

• Stable dividend policy with a target of

approximately 30% PATAMI payout ratio

• Attractive annual reward to shareholders while

maintaining growth momentum

17.5

7.5 5 5.5 10

90%

17% 27%

32%

56%

0%

20%

40%

60%

80%

100%

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10

15

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FY11º FY12 FY13 FY14 FY15*

Gross Dividend Per Share^ Payout Ratio

sen % of PATAMI

Latest Quarter Review

5

Movement of CBIP mimics the movement of the Bursa Malaysia Plantation

Index, which is largely dependent upon the price of CPO

Third Quarter Results Review

Continuing Operations Quarter ended

30 September

% change 9 months period ended

30 September

% change

2016 2015 2016 2015

(RM’000) (RM’000) (RM’000) (RM’000)

Revenue 140,691 124,013 13.44 391,673 357,278 9.62

Profit from operations 35,566 21,810 63.07 77,355 72,089 7.30

Share of results of associates and

jointly-controlled entity

5,510 3,385 62.77 6,599 2,460 168.25

Profit before taxation 40,831 24,873 64.16 83,087 73,617 12.86

Profit after taxation 32,787 16,127 100.33 61,310 56,360 8.78

Revenue for the quarter and 9 months

period ended 30 September 2016

increased 13.44% and 9.62%

respectively mainly due to higher billing

for both the palm oil engineering and

special purpose vehicles division

Profit after taxation was higher for the

quarter and 9 months period ended 30

September 2016 mainly due to higher

revenue and margin for the special

purpose vehicles division offset by lower

profit margin from the palm oil

engineering division

Latest Quarter Review

6

Revenue Breakdown

Profit Before Taxation Breakdown

9 months period ended 30 September 2016 9 months period ended 30 September 2015

Palm Oil Engineering

83%

Special Purpose Vehicles

17%


80%


20%

Profit Before Taxation 9 months period ended 30 September % change

2016 2015

(RM’000) (RM’000)

Palm Oil Engineering 64,622 70,112 (7.77)

Oil Palm Plantation (3,345) (3,806) (12.11)

Special Purpose Vehicles 15,211 4,851 213.56

Share of results of associates and jointly-controlled entity 6,599 2,460 168.25

Total 83,087 73,617 12.86


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Palm Oil Engineering – Services

One stop centre turnkey contractor

for Modipalm Continuous

Sterilization palm oil mills

Our services and products

encompass the following:

Earthwork/site preparation;

Civil construction;

Mill engineering; and

Supply, installation, testing and

commissioning of machineries

and equipment

Palm Oil

Engineering – Core

Products

Screw Press

Digester Continuous Sterilizer


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Palm Oil Engineering - Robust Performance

265,057

341,379 317,621

447,428 428,593

45,234 77,551 81,535 92,286

114,181

17.07%

22.72%

25.67%

20.63%

26.64%

0.00%

5.00%

10.00%

15.00%

20.00%

25.00%

30.00%

0

50,000

100,000

150,000

200,000

250,000

300,000

350,000

400,000

450,000

500,000


Revenue PBT PBT Margin

PBT margin has grown from 17.07% in

FY11 to 26.64% for FY15

The significant improvement over the

years can be mainly attributable to:

Proven and exclusive technology in

our Modipalm Continuous Sterilization

mills;

Economies of scale;

Declining steel price; and

Improvement in project

implementation


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Palm Oil Engineering - Robust Performance

RM’000 Orderbook growth is underpinned by a

backlog of RM493million as at 3Q2016

Despite declining trend in CPO price,

product branding and global recognition

surrounding our Modipalm Continuous

Sterilization palm oil mill have been

sustaining our orderbook

Recurring Clients

71%

New Clients

29%

Recurring Clients

30% New

Clients 70%

Clientele

Expansion

2011 2014

There has been an influx of

new clients, being clients

other than Astra, Wilmar,

Felda, TH Plantations,

Tradewinds and Sime Darby

Notable new clients secured

include Jaya Tiasa, TDM,

Sime Darby, Sinarmas

Group, United Plantations

Bumitama Agri, Ahmad Zaki

and Rimbunan Hijau

478,000

517,000

495,000

477,000

493,000

450,000

460,000

470,000

480,000

490,000

500,000

510,000

520,000

3Q2015 4Q2015 1Q2016 2Q2016 3Q2016

Orderbook


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Higher Oil Recovery

Our Modipalm Continuous

Sterilization palm oil mills utilizes

a continuous conveyor chamber

for sterilization process, as

opposed to conventional batch

processing

In conventional batch process, oil

are loss during extraction process

as spillage of oil occurs during

mobilization process for the batch

processing

19.47

20.27 20.4

1919.219.419.619.8

2020.220.420.6

BeforeConversion

Year ofConversion

AfterConversion

Mill 1

18.51 18.89

20.4

17.518

18.519

19.520

20.521

BeforeConversion

Year ofConversion

AfterConversion

Mill 2

Oil Extraction Rate (%)

Oil Extraction Rate (%)

Historical Performance Post

Conversion

Our Modipalm mill also

eliminates the need for

recovery of empty bunch oil,

which are low quality oil with

high wax content


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Operator Cost Savings

-

200,000

400,000

600,000

800,000

20Tonnes/Hour

30Tonnes/Hour

45Tonnes/Hour

60Tonnes/Hour

Savings (Monthly Wage including OT: RM1000)



Estimated Cost Savings for

Continuous Sterilizer Mills(RM)

Operator requirement for the Continuous

Sterilization mill is minimal

Automation of mill reduces role of operator’s to

supervision only

Performance of mill is not highly dependent on

labour performance

Conventional Mills Continuous

Sterilization Mills

Estimated Operator Requirement (No.)

Mill Size Conventional

Mills

Modipalm Continuous

Sterilization Mills

20 Tonnes/Hour 40 16





12

Maintenance Cost Savings

Machineries Horizontal sterilizers, cages, tractors,

skid-steer loaders, railway tracks,

cages, transfer carriages, winches,

capstans and mono-rail hoists or

cage tippers

Fresh fruit bunch conditioner

and Continuous Sterilizer

Approximate Annual

Maintenance Cost

Conventional Mills Continuous Sterilization Mills

300,000

400,000

500,000

600,000

150,000 200,000

250,000 300,000

-

100,000

200,000

300,000

400,000

500,000

600,000

700,000

20 Tonnes/Hour 30 Tonnes/Hour 45 Tonnes/Hour 60 Tonnes/Hour

Conventional Mills Continuous Sterilizer Mills

Estimated Maintenance

Cost For Machineries

(RM)


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Total Cost Savings

A 45 tonnes per hour Continuous

Sterilization mill;

Total operator for mill is 24;

Average monthly wage including overtime

reimbursement is approximately

RM1,500.00; and

Total maintenance cost for the machineries

involved in sterilization process is

approximately RM250,000 per annum

We assume based on the following scenarios:

A 45 tonnes per hour conventional mill;

Total operator for mill is 50;

Average monthly wage including overtime

reimbursement is approximately

RM1,500.00; and

Total maintenance cost for the machineries

involved in sterilization process is

approximately RM500,000 per annum

Conventional Sterilizer Continuous Sterilizer Savings

(RM)

Estimated annual labour cost 900,000 432,000 468,000

Estimated annual

maintenance cost

500,000 250,000 250,000

Total (200,000 MT FFB per annum) 718,000

Cost Savings (RM/FFB) 3.59


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Conventional Mills Continuous Sterilization Mills

Eliminates arduous

manual tasks and labour

requirement is strictly for

supervision purposes

Oil spillage is close to non-

existent which allows for a

clean working environment

Non-pressurized and

relatively safe sterilization

process

Zero accident track record

Safety


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Quality

Deterioration of bleachability index

(DOBI), is an analytical procedure

intended for quality control of crude

palm oil

Indicates the ease of refining and

predicts its oxidative status

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0.50

1.00

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3.50

4.00

DOBI Value

Sludge Oil

Poor

Fair

Good

Excellent

DOBI Performance of Modipalm

Continuous Sterilizer Mills

Environment

Conventional

Mills

Continuous

Sterilization

Mills

Smoke emissions from Continuous

Sterilization mills are generally cleaner as

opposed to intermittent black smokes from

conventional mills

Steam consumption for Continuous

Sterilization mills are also relatively

constant


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Our Projects In Malaysia (2008 – Present)


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Our Projects In Indonesia (2008 – Present)


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Our Projects In Central America/Africa (2008 – Present)


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Major Customers and Project References

Continuous Sterilisation

Country Customer No. of

mills

Malaysia/Indonesia Felda Group 13

Wilmar 11

Sime Darby 9

TH Plantations 9

Astra Agro Lestari 8

London Sumatra 5

Tradewinds 4

TDM 3

PT Smart 2

Bumitama 2

Others 20

Subtotal 86

Thailand, Papua New Guinea,

Africa and Central America

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Total Modipalm continuous

sterilisation mills

102

Total conventional mills

41

Grand total

143

Country/Region Market breakdown

Indonesia 45%

Malaysia 40%

Central

America/Africa

15%

Market Breakdown


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A 51% owned subsidiary, our special

purpose vehicles division has grown

from contributing RM57 million in

revenue in 2011 to more than

RM262 million in 2013 and RM152

million in 2014

Focused primarily in bulky supply of

specialised vehicles for government

authorities and agencies

262,054

152,423 123,363 41,139

20,885 25,797

15.70% 13.70%

20.91%

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5.00%

10.00%

15.00%

20.00%

25.00%

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100,000

150,000

200,000

250,000

300,000

FY13 FY14 FY15

Revenue PBT PBT Margin

RM’000

Orderbook for the special purpose vehicles

as at 3Q2016 is RM530 million

RM’000

90,000 35,000 35,000

217,000

530,000

0

100,000

200,000

300,000

400,000

500,000

600,000

3Q20154Q20151Q20162Q20163Q2016

Orderbook


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The special purpose vehicles division is

gradually expanding its products

portfolio, with products ranging from

helicopters, machine gun stabilizers

and military related vehicles

Successfully secured a contract to

supply 2 units of AW189 helicopters for

a total contract amount of RM201

million as at 1Q2016

Sarawak

Kumpulan Kris Jati

Land area: 16,567 ha

Planted: 11,492 ha

Solar Green

Land area: 5,567 ha

Planted: 4,638 ha

Bahtera Bahagia

Land area: 4,269 ha

Planted: 4,214 ha

Plantation and Milling

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Jointly-

controlled entity/

Associate

Total planted

area

Effective

equity

interest

Effective

group

planted

area

(ha) (%) (ha)

Solar Green Sdn

Bhd

4,638 50.0 2,319

Kumpulan Kris

Jati Sdn Bhd

11,492 30.0 3,448

Bahtera Bahagia

Sdn Bhd

4,214 30.0 1,264

Total 20,344 7,031

Effective Group Interest Breakdown

Oil Palm Cultivation – Mature Plantation Assets

Plantation and Milling

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Oil Palm Cultivation – Immature Plantation Assets

We have a greenfield

landbank of approximately

86,000 hectares, mostly

situated in Kalimantan Tengah,

Indonesia, of which 8,877

hectares has been planted as

at 3Q 016

Future planting to be targeted

at approximately 2,000

hectares per year

Registered Office

Further Information

24

Registered Office

CB Industrial Product Holding Berhad

Lot 4, Jalan Waja 15

Kawasan Perusahaan Telok Panglima Garang

42500 Telok Panglim Garang

Selangor Darul Ehsan

Telephone No.: 03 3122 2786

Facsimile No.: 03 2122 1336

E-mail: [email protected]

Website: www.cbip.com.my

Contact Person

Lim Zee Yang

Investor Relations & Corporate Affairs

CB Industrial Product Holding Berhad

Telephone No.: 03 3122 2823

Cellphone No.: 012 6303451

Facsimile No.: 03 2122 1336

E-mail: [email protected]

Disclaimer

Certain statements in this presentation are based on historical results which may not be

reflective of future results. Other statements, including without limitation, those regarding

our future prospects, strategies and objectives of our Group, which are forward-looking in

nature, are subject to uncertainties and contingencies. Although we believe that the

expectations reflected in such forward-looking statements are reasonable at this time, there

can be no assurance that such expectations will subsequently materialise. The inclusion in

this presentation should not be regarded as a representation or warranty by our Group or

our management team that the plans and objectives of our Group will be achieved.
mailto:[email protected]

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