1q2019 opportunity day · 5/16/2019 · cpko (mpob) : usd/ton fa (icis) : usd/ton natural fatty...
TRANSCRIPT
1Q2019 Opportunity DayThursday, May 16, 2019
Disclaimer
This presentation includes forward-looking statements that are subject to risks and uncertainties,including those pertaining to the anticipated benefits to be realized from the proposals describedherein. This presentation contains a number of forward-looking statements including, in particular,statements about future events, future financial performance, plans, strategies, expectations,prospects, competitive environment, regulation and supply and demand.
GGC has based these forward-looking statements on its views with respect to future events andfinancial performance. Actual financial performance of the entities described herein could differmaterially from that projected in the forward-looking statements due to the inherent uncertainty ofestimates, forecasts and projections, and financial performance may be better or worse thananticipated. Given these uncertainties, readers should not put undue reliance on any forward-lookingstatements.
Forward-looking statements represent estimates and assumptions only as of the date that they weremade. The information contained in this presentation is subject to change without notice and GGCdoes not undertake any duty to update the forward-looking statements, and the estimates andassumptions associated with them, except to the extent required by applicable laws and regulations.
Page 2
Agenda
Highlights
Palm Oil Market Update
Financial Performance
GGC Going Forward
Page 3
Key Highlights
1Q2019 Highlights
+ Natural FA prices were being in competitive range to synthetic FA+ FA Supply was tight due to plant shutdown in EU and China+ Improve FA sales volume compares to 1Q2018
+ ME plant 2 has commenced the commercial operation on April 5, 2019.
+ Mandate of B7 + Gov. has attempted to build up demand of B20
+ Extend price subsidies on B20 = B7-5 THB/litre(From Feb 19 to Jul 19)
+ Government targets to increase no. of B20 gas station to 1,000 stations
- Consolidated EBITDA -32% YoY - ME EBITDA -98% YoY + FA EBITDA +192% YoY
- High competition led to narrow margin- Glycerine price drop from glut supply- CPO prices continue downward trend due to high inventory in domestic and international market
ME Business Unit: FA Business Unit:
Financial Performance:
- FA Plant planned shutdown during 1 - 11 January 2019 for changing catalyst
Palm Oil Market Updates Financial PerformanceGGC Going ForwardHighlights
Plant Operation :
- CPKO prices continue downward trend due to high inventory in domestic and international market
Page 4
20.34
16.94 16.04
19.57
1Q18 4Q18 1Q19 FY18 1Q18 4Q18 1Q19 FY18
5.14 5.22 4.87 5.19
1Q18 4Q18 1Q19 FY18
24.6621.78 20.74
24.15
1Q18 4Q18 1Q19 FY18
1Q2019 Operation Highlights
ME (EPPO) : THB/Litre
METHYL ESTER (B100) BUSINESS UNIT
Biodiesel Mandate
ME EPPO P2F : THB/Kg
GGC’s ME Operational Performance
B7 B7 B7 B7
Page 5
CPO (DIT) : THB/Kg
119% 112% 102% 113%
1Q18 4Q18 1Q19 FY18
102,754 97,431 (2)
94,703 (1)
374,922
1Q18 4Q18 1Q19 FY18
18026 21
509
1Q18 4Q18 1Q19 FY18
Adjusted EBITDA (MB)
Sales Volume (Tons)
THB/Kg 1Q18 4Q18 1Q19 FY18
ME EPPO 28.51 25.18 23.98 27.91
ME1 Plant Utilization Rate
Note: The company could only realize the total sales volume from ME plant 1 because ME plant 2 is under testing run for commercial operation in 4Q18 and 1Q19. (1) In 1Q19, Sales volume from ME plant 2 = 15,678 tons(2) In 4Q18, Sale volume from ME plant 2 = 7,109 tons
Note: Utilization rate calculated base on nameplate capacity of ME1
Palm Oil Market Updates Financial PerformanceGGC Going ForwardHighlights
419535 553
471
1Q18 4Q18 1Q19 FY18
1,7841,395 1,365 1,568
1Q18 4Q18 1Q19 FY18
1,138
717 677 914
1Q18 4Q18 1Q19 FY18
FATTY ALCOHOLS BUSINESS UNIT
CPKO (MPOB) : USD/Ton
FA (ICIS) : USD/Ton
Natural Fatty Alcohols regainedCompetitiveness vs. Synthetic ones
FA Market P2F : USD/Ton
GGC’s FA Operational Performance
Plant Utilization RateCrude Oil Price (WTI) : USD/BBL
Ethylene Price (USGC) : USD/Ton
Synthetic FA (C1215) Price : USD/Ton
Natural Mid Cut FA (C1214) Price : USD/Ton
1Q2019 Operation Highlights
63 59 55 65
1Q18 4Q18 1Q19 FY18
669 660 614 643
1Q18 4Q18 1Q19 FY18
2,3811,764 1,565
2,039
2,160 1,562 1,502 1,742
1Q18 4Q18 1Q19 FY18
101%129%
111% 115%
1Q18 4Q18 1Q19 FY18
24,235 33,442
24,798
114,784
1Q18 4Q18 1Q19 FY18
264 284 196
877
1Q18 4Q18 1Q19 FY18
Adjusted EBITDA (MB)
Sales Volume (Tons)
Page 6
Palm Oil Market Updates Financial PerformanceGGC Going ForwardHighlights
Agenda
Highlights
Palm Oil Market Update
Financial Performance
GGC Going Forward
Page 7
ProjectMethyl Ester
Plant 2Refined Glycerin
Plant 2Biocomplex
Phase 1
CapacityMethyl Ester
200 KTARefined Glycerin
20 KTASugarcane : 2.4 mm TPAEthanol : 186 mm LPA
CAPEX 1,650 MB 326 MB 7,500 MB (GGC hold 50%)
Project Progress Update COD Awarded EPC 2Q19Site Preparation
Loan Agreement SignedEPC Selection
Scheduled COD 5 Apr 2019 2Q20 Early of 1Q21
COD as of Apr 5, 2019
Projects Timeline
Refined GlycerinPlant 220 KTA
Methyl Ester Plant 2200 KTA
BiocomplexPhase 1
Sugarcane : 2.4 mm TPA
Ethanol : 186 mm LPA
2018End
2019End
2020End
Page 8
Palm Oil Market Updates Financial PerformanceGGC Going ForwardHighlights
Agenda
Highlights
Palm Oil Market Update
Financial Performance
GGC Going Forward
Page 9
2Q19 Highlights of Palm Oil & Oleochemicals MarketME Chain ME Price & Spread
FA Price & Spread FA Chain
ME:• ME demand in Q2/19 remains healthy due to supportive Biodiesel
policies from government;- Target to implement B10 as an optional fuel for diesel car in May’19- B20 demand is accelerating with increase no. of B20 stations- Government also plans to extend B20 subsidiary program at 5 THB/L from end of May’19 to Jul’19
- Gap of ME (B100) vs B7 price encourages some users to use ME (B100) directly
CPO:• Local CPO price is slightly firmer amid healthy demand from EGAT and
Biodiesel producers• Local CPO stock Mar’19: 434,244 tons Apr’19: 383,957 tons
FA:• FA demand is still healthy amid tight supply• Natural FA price still has advantage over Synthetic FA• Some Chinese producers were forced to shutdown due to strict Safety
and EnvironmentalCPKO:• CPKO price is moving sideway due to ending of palm harvesting season
in Malaysia and Indonesia• However, CPKO price is still pressured by high inventory level
Page 10
Palm Oil Market Updates Financial Performance GGC Going ForwardHighlights
5.2 5.0 4.8 4.9 5.1 5.1 5.3 5.2 4.9 5.6 5.0 5.2
39.5
34.430.5
28.6 28.5 28.9 29.025.2 24.0 23.7
33.3
27.9
30.8
25.822.4 20.5 20.3 20.8 20.2
16.9 16.0 15.3
24.9
19.6
0.0
5.0
10.0
15.0
20.0
25.0
30.0
35.0
40.0
45.0
1Q17 2Q17 3Q17 4Q17 1Q18 2Q18 3Q18 4Q18 1Q19 Apr-19 FY17 FY18
THB/KG Spread ME CPO
424 584 433 488 419 468 463 535 553 580 483 471
2,243 1,783 1,820
2,054 1,784
1,570 1,521 1,395 1,365 1,263
1,975
1,568 1,516
999 1,156
1,304 1,138
919 882 717 677 570
1,244 914
0
500
1,000
1,500
2,000
2,500
1Q17 2Q17 3Q17 4Q17 1Q18 2Q18 3Q18 4Q18 1Q19 Apr-19 FY17 FY18
USD/TSpread FA CPKO
Palm Oil Market Updates Financial PerformanceGGC Going ForwardHighlights
Opportunity: Potential to increase Biodiesel blending rate
Page 11
*GGC expected B20 from diesel passenger car maximum consumption 157 ML/M -> B100 30.2 ML/M ( additional from B7 19.6 ML/M)
8.816.7
25.7
40.0
50.055.0
60.566.6
73.280.5 81.3 82.1
0.00
15.00
30.00
45.00
60.00
75.00
90.00
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
ML/MForecast
2019 Forecast B20 Demand
MOEN reported B✓ 20 consumption in Apr’19: ̴40 ML (increased by 55% from previous month)As of Mar✓ ’19, there are 207 stations(B20) nationwide and expanding up to 1,000 stations by the end of this yearGovernment also plans to prolong B✓ 20 subsidiary program at 5 THB/L from end of May’19 Jul’19
Palm Oil Market Updates Financial Performance GGC Going ForwardHighlights Palm Oil Market Updates Financial PerformanceGGC Going ForwardHighlights
Opportunity: Potential to increase Biodiesel blending rate
B10 Development Timeline
Next StepB10 Mandate
JAMA recommends B100 and B10 specification;B100, MG < 0.4% wt.B10 Water < 200 ppm
97 models of
accepted B20
DOEB announced B10 and B100 specification as JAMA suggestion
MOF announced the Excise Tax for additional Biodiesel Blending Ratio
15th May 2019
22nd Apr 2019
15th May 2019
11st Mar 2019
Page 12
Palm Oil Market Updates Financial Performance GGC Going ForwardHighlights Palm Oil Market Updates Financial PerformanceGGC Going ForwardHighlights
Agenda
Highlights
Palm Oil Market Update
Financial Performance
GGC Going Forward
Page 13
Consolidated Financial Performance
Sales Revenue (MB) EBITDA & Adjusted EBITDA* (MB) /Adjusted EBITDA Margin* (%)
1Q191Q18 4Q18
ME EBITDA ME Adjusted EBITDA FA EBITDA FA Adjusted EBITDA
Consolidated Adjusted EBITDA Margin
Net Profit (MB) & Net Profit Margin (%)
FY18
Page 14
2,774 2,079 1,714
9,913 1,857
1,575 1,102
6,312
4,631 3,654
2,816
16,225
1Q18 4Q18 1Q19 FY18
ME Business Unit FA Business Unit
64 443 (1) 22
-1,161 (2)
1Q18 4Q18 1Q19 FY18
1.4%
12.1%
0.8%
163 180
1 26 3 21
429 509
48
264
285 284
140 196
494
877
211
444
286 310
143 217
923
1,386
9.6% 8.5% 7.7% 8.5%
-7.2%
Note:(1) In 4Q18, net profit was recorded 443 MB which was included tax income
from deferred tax assets amounting to 272 MB. (2) In FY18, net profit was recorded -1,161 MB which was included tax
income from deferred tax assets amounting to 356 MB and expenses from raw materials derogation amounting to 2,004 MB.
Palm Oil Market Updates Financial Performance GGC Going ForwardHighlights Palm Oil Market Updates Financial PerformanceGGC Going ForwardHighlights
Financial Position
Statements of Financial Position
Cash and Cash Equivalent
Account Receivable, Inventory, and other
Current Assets
PP&E
Non-current Assets
Other Liabilities
Interest Bearing
Debt
Shareholders’
Equities
December 31, 2018Baht 13,084million
Key Financial Ratios
Repayment Plan Cash FlowsMillion Baht
Million Baht
Million Baht
528
935
(2,292)
2,575 1,745
*
*Cash from IPO was spent in ME2 project of 1,150 MB and WC 308 MBEnding Cash had not included short-term investment of 1,350 MB
March 31, 2019Baht 12,799 million
Page 15
338
441
567
765
2019 2020 2021 2022
2,387
+252-90 -17
2,532
BeginningCash
OperatingCash Flows
CAPEX &Investment
Financing EndingCash
7,923 11,073 9,708 9,730
2,689
2,400 2,120 2,121
FY16 FY17 FY18 1Q19
0.3 0.2 0.2 0.2
1.8 2.1 2.3 2.2
Palm Oil Market Updates Financial Performance GGC Going ForwardHighlights Palm Oil Market Updates Financial PerformanceGGC Going ForwardHighlights
Performance 1Q19 vs. 1Q18Net Profit : Million Baht
Operating ProfitsIn 1Q19, operating profits was lower than 1Q18, mainly from these factors;• The lower profitability of ME due to aggressive market competition and decreasing of sales volume• A decrease in refined glycerine price regarding to supply glut
Stock Gain/(Loss) & NRV
In 1Q19, the company recognized stock loss & NRV of 74 MB due to downward trend in CPO & CPKO prices. However, it was improved from 1Q18 by 159 MB due to improving inventory management.
Gain/(Loss) from FX
In 1Q19, the company recorded loss of 3 MB against loss of 27 MB in 1Q18 due to the impact from THB appreciation, in which THB was appreciated by 1.7% in 1Q19 and in 1Q18 was appreciated by 3.7%
Palm Oil Market Updates Financial Performance GGC Going ForwardHighlights Palm Oil Market Updates Financial PerformanceGGC Going ForwardHighlights
Performance 1Q19 vs. 4Q18
Page 17
Operating ProfitsIn 1Q19, operating profits was lower than 4Q18, attributed to the lower EBITDA of fatty alcohols due to lower sales volume from FA plant planned shutdown for changing catalyst and low seasonal demand in this quarter.
Stock Gain/(Loss) & NRV
In 1Q19, the company recognized stock loss & NRV of 74 MB while recorded stock & NRV of 24 MB in 4Q18, primarily due to downward trend in CPO and CPKO prices.
Net Profit : Million Baht
-50 -2 -4
Palm Oil Market Updates Financial Performance GGC Going ForwardHighlights Palm Oil Market Updates Financial PerformanceGGC Going ForwardHighlights
T H A N K Y O U
Global Green Chemicals Public Company Limited
555/1 , Energy Complex, Building A, 4th Floor,
Vibhavadi Rangsit Road, Chatuchak, Chatuchak,
Bangkok 10900, Thailand
Tel: +66(0) 2 558 7306
Tel: +66(0) 2 558 7345
Fax: +66(0) 2 558 7301www.ggcplc.com
For further information or enquiries,
please contact our Investor Relations Team : [email protected]
Page 18
Appendix
Palm Oil & Oleochemicals Market
14.76
CP
KO
CP
O
2016 2017 2018
Gly
ce
rin
e
29
.63
30
.10
29
.02
32
.26
33
.93
33
.50
37
.49
34
.00
31
.05
30
.00
29
.63
30
.80
31
.40
31
.97
28
.97
26
.91
26
.77
23
.84
23
.05
22
.13
22
.11
21
.59
20
.73
19
.12
19
.10
21
.28
20
.37
18
.97
20
.16
23
.2
21
.59
20
.09
19
.03
17
.89
16
.22
16
.72
17
.04
16
.32
15.00
20.00
25.00
30.00
35.00
40.00
45.00
Jan
-16
Feb
-16
Mar
-16
Ap
r-1
6
May
-16
Jun
-16
Jul-
16
Au
g-1
6
Sep
-16
Oct
-16
No
v-1
6
Dec
-16
Jan
-17
Feb
-17
Mar
-17
Ap
r-1
7
May
-17
Jun
-17
Jul-
17
Au
g-1
7
Sep
-17
Oct
-17
No
v-1
7
Dec
-17
Jan
-18
Feb
-18
Mar
-18
Ap
r-1
8
May
-18
Jun
-18
Jul-
18
Au
g-1
8
Sep
-18
Oct
-18
No
v-1
8
Dec
-18
Jan
-19
Feb
-19
Mar
-19
CPO_DIT(B/kg)
92
4
1,0
02
1,1
56
1,2
86
1,2
05
1,3
04
1,2
76
1,4
38
1,4
81
1,3
75
1,5
15
1,6
25
1,7
76
1,5
84
1,1
88
95
0
1,0
65
98
2
98
9
1,1
26
1,3
52
1,3
32
1,3
38
1,2
43
1,2
56
11
48
10
09
98
5
91
6
85
4
87
1
90
3
87
1
77
7
66
8
70
6
74
8.9
3
67
9.3
8
60
1.7
4
-
500
1,000
1,500
2,000
Jan
-16
Feb
-16
Mar
-16
Ap
r-1
6
May
-16
Jun
-16
Jul-
16
Au
g-1
6
Sep
-16
Oct
-16
No
v-1
6
Dec
-16
Jan
-17
Feb
-17
Mar
-17
Ap
r-1
7
May
-17
Jun
-17
Jul-
17
Au
g-1
7
Sep
-17
Oct
-17
No
v-1
7
Dec
-17
Jan
-18
Feb
-18
Mar
-18
Ap
r-1
8
May
-18
Jun
-18
Jul-
18
Au
g-1
8
Sep
-18
Oct
-18
No
v-1
8
Dec
-18
Jan
-19
Feb
-19
Mar
-19
CPKO(USD/Ton)
0
200
400
600
800
1000
1200
Spread(USD/Ton) RGL(USD/Ton) CGL(USD/Ton)Page 20
Key Performance By Business Unit
Page 21
ME
TH
YL
ES
TE
R (
B100)
BU
SIN
ES
S U
NIT
FA
TT
Y A
LC
OH
OL
S
BU
SIN
ES
S U
NIT
(1) Nameplate Capacity 300,000 tons per year from ME1 (2) In 1Q2019, GGC had sales volume form ME2 of 15,678 tons (3) In 4Q2018, GGC had sales volume form ME2 of 7,109 tons (4) Conversion ratio: 0.865 tons = 1,000 litres(5) Adjusted EBITDA refers to EBITDA excluding impact of Stock Gain/(Loss) and NRV
(1) Adjusted EBITDA refers to EBITDA excluding impact of Stock Gain/(Loss) and NRV
Consolidated Income Statement
Page 22
MB % MB % MB % MB % MB %
Sale Revenue 2,816 100 4,631 100 (1,815) (39) 3,654 100 (838) (23)
Feedstock (1,975) (70) (3,522) (76) 1,547 (44) (2,575) (70) 600 (23)
Net Realizable Value (NRV) (7) (0) 2 0 (9) (450) (4) 0 (3) 75
Product to Feed Margin 834 30 1,111 24 (277) (25) 1,075 29 (241) (22)
Variable Costs (403) (14) (495) (11) 92 (19) (484) (13) 81 (17)
Fixed Costs (133) (5) (126) (3) (7) 6 (163) (4) 30 (18)
Stock Gain/(Loss) (67) (2) (235) (5) 168 (71) (20) (1) (47) 235
SG&A (110) (4) (72) (2) (38) 53 (140) (4) 30 (21)
Other Income 22 1 28 1 (6) (21) 18 0 4 22
EBITDA 143 5 211 5 (68) (32) 286 8 (143) (50)
Depreciation and Amortization (111) (4) (139) (3) 28 (20) (125) (3) 14 (11)
EBIT 32 1 72 2 (40) (56) 161 4 (129) (80)
Net Financial Costs (4) (0) (5) (0) 1 (20) (5) (0) 1 (20)
FX Gain/Loss(1) (3) (0) (27) (1) 24 (89) (1) (0) (2) 200
Share of Profit/(Loss) from investment 1 0 20 0 (19) (95) 9 0 (8) (89)
Income Tax Expenses (4) (0) 4 0 (8) (200) 7 0 (11) (157)
Net Profit bef extra items 22 1 64 1 (42) (66) 171 5 (149) (87)
Extra item net of tax(2) - n.a. - n.a. - n.a. 272 7 (272) (100)
Net Profit after extra items 22 1 64 1 (42) (66) 443 12 (421) (95)
QoQ1Q2019 1Q2018 YoY 4Q2018
Notes : (1) Including Gain/(Loss) from FX and Derivatives (2) Extra item was tax income from deferred tax assets amounting to THB 272 million.