padico holding investors’ presentation 2009. agenda the palestinian economy overview of padico ...
TRANSCRIPT
Agenda
The Palestinian Economy
Overview of PADICO
PADICO Financial Statements
Future Plans 2010 – 2013
About Palestine
The Palestinian Territory landscape is 6,020 sqkm, divided into the West Bank, East Jerusalem (5,655 sqkm) and Gaza Strip (365 sqkm).
The Palestinian National Authority governs the West Bank and Gaza Strip. It was established in 1994, pursuant to the Oslo Accords between the PLO and the government of Israel.
The Palestinian Economy’s Key Indicators
DemographicsDemographics
Total Population 4,016,416
Literacy Rate 94%
Median age 18 years
Life expectancy at birth 73.5 years3000
3500
4000
4500
5000
1997 1999 2001 2003 2005 2007
GDP Trend
25%
14% 14% 13% 11% 9%5% 5% 5%
Real GDP growth rate increased by 2% in 2008 compared to 2007
Estimated growth in 2009 is 6.4%
2010 real GDP growth is projected to be 7.5%
GDP by Sector
GDP Trend
Amounts in USD millions
Risk Management
PADICO manages the risk associated with the political and economic environment through:
Sector diversification, with the concentration being on sectors characterized as defensive sectors that are associated with infrastructure, real estate and telecommunications.
A financial portfolio that invests in regional and international equity markets, that is separated from the main operations of the holding company through a subsidiary; Rawan International Investment Co.
PADICO Investments - by sector
A Highlight Of Our Key Investments
Capital* 185.7
% ** 31.7
Capital 14.1
% 62.7
Capital 10.00
% 78.0
Capital 26.5
% 60.1
Capital 4.9
% 41.5
Capital 70.5
% 70.9
*Authorized capital in USD millions ** % owned by PADICO ***Holding as of 31-12-2009
Capital 26.5
% 55.3
Results from some of our key investments
Profits 1997USD 14.3 million
Listed Companies 199719
Operating Profits 1998USD (40.4) thousand
Total Assets 1997USD 17.2 million
Profits 2009USD 99.2 million
Listed Companies 200939
Operating Profits 2009USD 4.8 million
Total Assets 2009USD 114 million
Consolidated Income Statement Summary
(Amounts in USD thousand)
2006
2007
2008
2009
Operating Revenue 18,697
16,971
26,250
31,018
Profits from Associates 16,515
23,267
39,508
29,529
Revenue (Loss) from investment portfolios
8,047
11,608
(8,128)
340
Revenues from Consolidation
- - - 15,449
Recovery of Provision for a loan granted to an affiliate
- - - 6,359
Total Revenues 59,813
64,366
59,815
85,478
Operating Expenses 13,023
11,276
16,984
20,270
Total Expenses 31,686
28,393
36,075
43,147
Net Profit 27,688
35,560
22,526
42,236
Net profits increased by 87.5% in 2009 compared to 2008 due to:
An increase in operating revenues by 18%, backed by the performance of PPC and consolidated revenues of PRICO.
Registration of positive revenues from the investment portfolios compared to a total loss of USD 8.1 million in 2008.
The recovery of provision for a loan granted to an associate (PTIC) amounting USD 6.4 million, following the restructuring process.
Revenues & Net Profit
27,688
35,560
22,526
42,236
2006 2007 2008 2009
Amounts in USD thousand
CAGR= 15%
Net ProfitRevenue Sources
Amounts in USD thousand
Consolidated Balance Sheet Summary
(Amounts in USD thousand)
2006 2007 2008 2009
Cash at banks 35,500 21,523 20,720 20,862
Current assets 100,352 98,134 73,805 79,475
Total assets 452,527 455,699 530,028 620,197
Current liabilities
62,440 44,249 60,198 83,430
Total liabilities 112,051 105,132 144,883 190,492
Total equity 340,476 350,567 385,145 429,705
Outstanding shares
249,989 249,989 250,000 250,000
452,527 455,699530,028
620,197
2006 2007 2008 2009
Amou
nts i
n U
SD th
ousa
nd
CAGR = 11%
Total Assets
Total Assets increased by 17% in 2009 compared to 2008 due mainly to the consolidation of PRICO which led to increases of around USD 121 million in:
Projects in progress Real estate investmentsIntangible assets
Profitability Ratios
6%
8%
5%
7%
8%
10%
7%
10%
2006 2007 2008 2009
ROA ROE
0.12
0.14
0.09
0.17
2006 2007 2008 2009
An increase of 89%
Am
ount
s in
US
D
EPS ROA & ROE
Capital Structure
39% 34% 39%
222%
123%95%
2007 2008 2009
Debt/Equity Current Ratio
New Loans were used for expansionary
purposes; acquisition of affiliates
Debt Ratios
Stock Ratios
2006 2007 2008 2009
Closing Share Price (USD)
2.98 2.23 1.21 1.19
BV/ Share (USD)
1.29 1.33 1.38 1.47
EPS (USD) 0.12 0.14 0.09 0.17
P/E (x) 24.8 15.93 13.44 7.0
P/BV (x) 2.31 1.68 0.87 0.82
Market Capitalization (USD Million)
465 558 303 298
Multiples
Real Estate Restructuring Plan
Merging and acquiring 16 companies into one holding company.The value of the transaction is USD 95 millionPADICO to own a controlling stake in the new holding.
Phase one has been completed relating to the due diligence of the related companies in addition to the valuations.
Restructuring of current separate entities is being finalized, in terms of loans repayment and capital reductions.
Business plan is being finalized for the new holding
StatusSynergiesRationale
Cost synergies:
Integration in HR, IT and operations practices; especially in terms of purchases and usage of equipment.
Revenue synergies:
Market and client business integration:
Consolidate PADICO activities in the real estate into one structure
Establish a strong and a leading company in Palestine
The new holding to concentrate on real estate development, management and contracting
Transaction Summary
Manufacturing Sector Restructuring Plan
Consolidating 6 companies into one holding company.The value of the transaction is USD 9.7 millionPADICO owns a controlling stake in the holding (PIIC).
The holding has acquired most related companies in PADICO Portfolio
The holding to finalize an internal restructuring and add a strong marketing department
StatusSynergiesRationale
Cost synergies:
Integration in HR, IT and operations practices, especially in terms of acquiring raw materials.
Revenue synergies:
Market, client business integration especially in terms of effective distribution.
Consolidate PADICO activities in the manufacturing sector into one structure
Establish a strong and a leading company in Palestine
The new holding to invest in Oil production, carton, plastics and packaging industry, in addition to Poultry.
Transaction Summary
PSE Restructuring Plan
Transforming the PSE from a private shareholding company to a public shareholding company
Separate the depository and clearance centre from the trading activities
PADICO to reduce its holdings in the PSE from 76% to around 50%
The Government approved the transformation
In the process of marketing the PSE to a strategic investor
StatusRationale
Corporate governance implementation
Attract strategic international investors into the PSE.
Transaction Summary
Power Generation
There is only one Power Generation Plant in Palestine based in the Gaza Strip and provides only 30% of the electricity needs there.
In the West Bank, Palestinians import around 2 million MWh/ year from Israel to match the demand.
Electricity tariffs are higher than neighboring countries by around 30%.
Sec
tor
Ove
rvie
w
PADICO will establish a power generation station located in Northern West Bank, with a total capacity of 400 MWh.
The estimated cost will be USD 300 million, USD 120 million will be financed through equity, while the USD 180 million will be debt.
The plant is expected to start operations by end 2012.
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Solid WasteS
ecto
r O
verv
iew
1.4 million tones of municipal waste is generated every year in the West Bank and Gaza Strip
The average growth in waste generation is estimated at 4% per year, depending on population growth, economic growth and the extent to which people adopt consumer and disposable lifestyles.
PADICO established the first recycling company in Palestine (including the composting) “ The Palestinian Recycling Company”.
The new company's first pilot projects will be building, managing , and operating a recycling facility in Nablus with a total cost of USD 2 million, to start operations mid 2010
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Waste WaterS
ecto
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verv
iew
The average quantity of wastewater in Palestine is over 100 mcm per year
More than 75% of the waste water go into the ground 80% of the collected wastewater can be retreated and
utilized for irrigation.
PADICO will be the first private company to enter the water sector in Palestine.
An MOU has been signed with Jenin Municipality to upgrade the wastewater treatment plant.
The project estimated cost is around USD 1- 2 million, and will start operations beginning of 2011.
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Contact Information
PADICO Holding
Ramallah- Palestine
Tel: + 970 2 240 3336
Fax: + 970 2 240 3363
P.O.Box: 1708 Ramallah- Palestine
Email: [email protected]