Naim Presentation Slides - 8 July 2012
Naim Presentation Slides - 8 July 2012
Naim Presentation Slides - 8 July 2012
Disclaimer
Information contained in our presentation is intended solely for your personal reference and is strictly confidential. Such information is subject to change without notice, its accuracy is not guaranteed and it may not contain all material information about the company. Neither we nor our advisors make any representation regarding, and assume no responsibility or liability for, the accuracy or completeness of, or any errors or omissions in, any information contained herein. In addition, the information contains projections and forward looking statements that reflect the companys current views with respect to future events and financial performance. These views are based on current assumptions which are subject to various risks and which may change over time. No assurance can be given that future events will occur, that projections will be achieved, or that the companys assumptions are correct. Actual results may differ materially from those projected.
This presentation is strictly not to be distributed without the explicit consent of the Companys management under any circumstances.
Table of Contents
Brief Corporate Profile Overall Financial Performance Financial Results Analysis Segmental Breakdown Analysis Dividend Track Record Shareholding Statistics Market Outlook & Prospects Analysts Valuations
3
Integrated property developer based in Sarawak with projects covering Kuching, Miri and Bintulu.
Contracting of construction, civil engineering, oil and gas; and infrastructure projects.
5
Oil and gas services through its 34% shareholding investment in Dayang Enterprise Holdings Berhad
Property Investment
Engineering & Construction Manufacturing, Quarry Operations, Trading & Services Via Associate Dayang Enterprise Holdings Bhd
Construction
Other Businesses
Property Development
In a Nutshell
Developed more than 16,000 units of residential, commercial and industrial properties throughout Sarawak valued at more than RM 2.5 billion. Accumulated remaining land bank of 2,620 acres strategically located with estimated future GDV of RM9.5 billion. Has potential to develop commercial and other properties worth more than RM 3.0 billion in Kuching, Bintulu and Miri for injection into Real Estate Investment Trusts (REIT) in future.
Naim first investment property, Permy Mall with lettable floor area of 153,000 sq ft, was completed in December 201. It is currently 94% tenanted and generating a gross return of 12%.
Long track record in building townships, e.g. Bandar Baru Permyjaya in Miri, Desa Ilmu and Riveria in Kuching.
Low holding cost for the bulk of land bank owned by Naim as some received as payment in kind from completed construction jobs.
This provides greater flexibility in the timing for launching Naims property projects based on prevailing market demand.
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(Unit: RM million)
Year of Launch 1995 2000 2005 Completed GDV in FY2010 1,242 438 191 1,871 Completed GDV in FY2011 1,355 467 233 2,055 Remaining GDV as at 01.01.2012 (RM million) 2,000 0* 112 2,112
Properties Sold Property Development Projects Bandar Baru Permyjaya FY2010 Units 429 35 29 493 Sales Value 122 6 14 142
11
(Unit: RM million) FY2011 Unbilled Sales 41 8 7 56 Units 329 116 104 549 Sales Value 113 29 42 184 Unbilled Sales 104 43 29 176
Desa Ilmu
Riveria TOTAL
290
50%
37
633
190
12
Property Investment
13
To launch a REIT when property investment assets has reached sufficient size
The 2-storey Miri Permy Mall was completed on 28 October 2011. At present, its occupancy rate is 94% since February 2012 and is expected to generate rental income of RM8 million per annum. The estimated fair value for the building and land is RM85.0 million and RM3.6 million respectively as at 31 December 2011. The total development cost including land and building is RM52 million (land cost of RM3 million and building cost of RM49 million) with gross floor area of 275,000 sq ft and lettable floor area of 153,000 sq ft.
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Construction
15
Note: The contracts above do not include construction of NAIMs own property developments estimated at RM2.5 billion.
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Ahead of Schedule
On Schedule
Note: The above percentage is based on total 30 completed projects undertaken from January 1997 to March 2012.
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Overseas
TOTAL
154.8
2,822.5
96.8
2,203.6
Current order book will sustain earnings growth for next 2 to 3 years. Does not include projects currently bidding for. Successful bids to sustain order book and earnings beyond 2014.
Note: i. Order book includes RM1,602 million with firm contracts and RM1,221 million at LOI stage. Given our track record and past experience of 100% conversion to LOAs, we are very confident that these LOIs will become firm orders, although this cannot be guaranteed. LOI values stated are estimates only and are subject to change.
ii. Order Book reflects Naims share only. Share of JV subject to ongoing discussion with JV partners.
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Client
Federal Government Federal Government State Government Federal Government Federal Government Federal Government Federal Government State Government SPNB
Contract Value (RM million) 98.0 73.0 (Phase1) 96.1 (Phase2) 279.5 70.7 76.0 (Phase1) 33.0 (Phase2) 313.0 37.5
Completion Date May 2002 Nov 2004 Dec 2004 May 2005 May 2005 Dec 2005 Dec 2006 Feb 2008 July 2008
296.5
90.8
May 2009
April 2009
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Client
Federal Government JKR Federal Government SPNB SESCO
Completion Date May 2009 June 2010 Feb 2010 March 2010 July 2010
202.0
56.1 63.7 104.6 310.1
April 2011
Aug 2011 Oct 2011 Sept 2011 Dec 2011
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Client
Total Value to Run (1 Apr 2012) 451.80 119.75
Affordable Housing Projects Sabah Oil and Gas Terminal (SOGT) Rehabilitation & Maintenance of Fiji National Highway Bengoh Dam Resettlement Scheme Complex Islam Murum Dam Resettlement Scheme Jalan Kampung Semadang/ Bau TOTAL
560.46 244.40
Fiji Government
State Government Majlis Islam Sarawak
142.76
179.60 94.64
84.72
74.53 28.40
Mar 2010
Oct 2010 Apr 2009
Dec 2012
Jan 2013 Sep 2012
State Government
State Government
197.17
67.65 1,486.82
197.17
3.30 959.67
Aug 2012
July 2009
Aug 2013
Aug 2012
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22
2011
120 30 100 45 20 60 -
2012
160 100 45 20 80 60 20
Petronas Carigali: Topside Structural Maintenance Petronas Carigali: Integrated Minor Maintenance (IMM) Petronas Carigali: Hook-up and commissioning Murphy Sabah: Topside Major Maintenance Brunei Shell Petroleum: Charter of Dayang Zamrud Sarawak Shell & Sabah Shell: Topside Maintenance Contract Talisman Topside Maintenance Contract NEW Workboat Dayang Topaz
2,207
1,365
375
485
400.000
350.000 300.000 RM million
255.385
80.000
70.000 RM million 60.000 50.000 40.000 30.000 20.000 10.000 0.000 2007 2008 2009 2010 2011 #
250.000
200.000 150.000
181.128
127.134
196.954
44.785 28.852
100.000
50.000 0.000
Note (#): For illustrative purposes, 2007 financial performance is presented on a proforma basis as if all the subsidiaries were part of Dayang Enterprise Holdings Bhd Group since 1 January 2007. 2008 financial performance is base on 15 months period results instead of 12 months.
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Feb
Mar
Oct
Dec
Bonus Issue (1:4) completed to reward shareholders Secured TSM LOA from Carigali worth RM802 million
Secured contract extension from Murphy, estimated to be additional RM100 million Rights Issue (1:4) oversubscribed
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27
84.981
79.145 69.495 48.483 66.229 46.628 76.274 80.747
RM million
2003
2004
2005
2006
2007
2008
2009
2010
2011
Since Naim was listed on Bursa Malaysia in 2003, it has never suffered losses in any single financial year while journeying through various economic cycles and slowdown.
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724.015
30
Income from associates and joint ventures contributed significantly to the Groups overall profitability
Operating cash flows remained positive in FY2011 and sharp increase in financing net inflow after issuance of Islamic bonds
26.84%
132.04 21.55% 99.91 97.75
n/a
-56.7% n/a -51.8% -52.3%
13.88%
48.15 46.63 19.68
41.25
-52.3%
Overall, lower revenue was recognised by the property division and lower contract was completed by construction division in FY2011, compared to FY2010. Correspondently, lower profitability was recognised by both property and construction division in FY2011, compared to FY2010. However, higher profitability contributed by joint ventures (RM12.8 million) and from associate Dayang Enterprise (RM28.6 million) helped to uplift overall PBT of the Group.
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120.90 22.54 18.64% 8.12 6.72% 16.94 14.01% 12.95 12.23 5.16
103.49 14.89 14.39% 13.49 13.04% 21.55 20.82% 19.09 19.16 8.09
94.39 8.17 8.66% (0.63) (0.67%) 12.56 13.30% 9.87 10.25 4.33
93.11 18.33 19.80% 0.74 0.77% 6.11 6.93% 6.24 4.99 2.10
94.16 22.44 23.83% 11.89 12.63% 22.98 24.41% 16.86 16.08 6.79
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Financial Position
FYE 31 December (RM million) Current assets Audited FY2010 608.40 Audited FY2011 761.79 Y-o-Y Change 25.2%
Current liabilities
Current ratio (times) Short term debt Long term debt Total debt Total equity (including MI) Total debt to total equity ratio Cash reserves Net cash / (net debt)
245.95
2.47 104.40 20.71 125.11 739.46 0.17 39.21 (85.90)
140.21
5.43 7.91 339.09 347.00 763.50 0.45 213.46 (133.54)
-43.0%
119.8% -92.4% 1537.3% 177.4% 3.3% 164.7% 444.4% 55.5%
0.12
724.02 250.00 2.90
0.17
747.18 250.00 2.99
41.7%
3.2% 0.0% 3.1%
The bulk of short debt has been refinanced by long term debt where Naim utilised long term debt to fund long term assets and/or long gestation development projects, after Naim successfully issued RM300 million Islamic Bonds in 2011.
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Financial Liquidity
FYE 31 December (RM million) Operating cash flows Investing cash flows Financing cash flows Net increase/(decrease) in cash Cash and cash equivalents at beginning of period Effect of exchange rate changes
Audited FY2010
49.48 (50.62) (49.86) (51.01) 89.70 -
Audited FY2011
35.30 (51.78) 190.57 174.10 38.69 (0.01)
Y-o-Y Change
-28.7% 2.3% -482.2% -441.3% -56.9% n/a
38.69
212.78
450.0%
The operating cash flow remained positive indicating cautious approaches are always adopted by Naims management in its business conduct in both FY2010 and FY2011. The bulk of the investing cash outflow in FY2011 was due to subscription of Dayang Enterprise Holdings Bhds rights issue in Feb 2011 (RM43.5 million), capex (RM31.4 million) and acquisition of property investment assets (RM30.1 million); compared to capex and acquisition of property investments assets incurred in FY2010 (RM52 million). The huge net financing net inflow was mainly due to successful issuance of RM300 million Islamic bonds in 2011. The risks of funding mismatch has been reduced to a lower level because a series of medium to long term bonds were issued with tenures ranging from 3 years (RM150 million), 5 years (RM125 million) to 10 years (RM25 million).
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Naim has successfully issued RM300 million Islamic bonds in 2011 with a series of medium to long term bonds were issued with tenures ranging from 3 years (RM150 million), 5 years (RM125 million) to 10 years (RM25 million). Naim debt securities is rated AA3 by Rating Agency Malaysia for its RM500 million Islamic Commercial Paper and Medium Term Note Issuance Programme. This is one the highest rating awarded to Naim amongst property development and construction company. The RM300 million bonds has enable Naim to lock in fixed funding cost over the 3 to 5 years beside allowing Naim in using long term funding to finance its long term assets and long gestation property development project over the next 3 to 5 years.
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Audited FY2011
411.89 117.18 259.49 30.16 5.06
% 100.0% 56.6%
% 100.0% 39.1%
% 100.0% 44.5%
% 100.0% 51.6%
Construction
Any Other Biz Property Investment
43.10
3.85 -
39.8%
3.6% 0.0%
74.14
4.74 -
57.2%
3.7% 0.0%
91.23
0.03 -
55.5%
0.0% 0.0%
28.21
(0.57) 3.29
44.1%
-0.9% 5.2%
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Audited FY2011
411.89 117.18 259.49 30.16 5.06
Audited 1Q FY2012
94.16 42.12 43.20 7.24 1.60
% 100.0% 44.7% 45.9% 7.7% 1.7% 1Q FY2012 Gross Profit Margin 23.8% 28.6%
Audited FY2010
164.44 73.18
% 100.0% 44.5%
% 100.0% 51.6%
% 100.0% 53.6%
Construction
Any Other Biz Property Investment
91.23
0.03 -
55.5%
0.0% 0.0%
28.21
(0.57) 3.29
44.1%
-0.9% 5.2%
10.82
(1.12) 0.70
48.2%
-5.0%
25.0%
-15.5% 43.8%
3.2%
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Segmental Performance
Property Development
FYE 31 Dec (RM million) Revenue Gross Profit Gross Profit Margin Audited FY2008 Audited FY2009 Y-o-Y Change Audited FY2010 Y-o-Y Change Audited FY2011 Y-o-Y Change
209.77
61.23 29.2%
169.99
50.65 29.8%
-19.0%
-17.3% 2.1%
162.94
73.18 44.9%
-4.1%
44.5% 50.7%
117.18
33.01 28.2%
-28.1%
-54.9% -37.2%
Lower sales of property was registered in 2010 (RM145 million) resulted in lower revenue and profit were recognised in FY2011 compared to 2011 (RM219 million). Approx. 70% of property sales was achieved in 2H 2011 and it is expected to contribute positively over next 2-years.
Construction
FYE 31 Dec (RM million) Revenue Gross Profit Gross Profit Margin Audited FY2008 279.75 43.10 15.4% Audited FY2009 347.96 74.14 21.3% Y-o-Y Change 24.4% 72.0% 38.3% Audited FY2010 418.77 91.23 21.8% Y-o-Y Change 20.4% 23.1% 2.2% Audited FY2011 259.49 28.21 10.9% Y-o-Y Change -38.0% -69.1% -50.0%
Construction contracts with lower profit margin were completed in FY2011 compared to FY2010, coupled with lack of new major contracts secured in 2011 resulted in lower revenue achieved in FY2011.
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Segmental Performance
Any Other Businesses
FYE 31 Dec (RM million) Revenue Gross Profit Gross Profit Margin Audited FY2008 34.20 3.85 11.3% Audited FY2009 48.97 4.74 9.7% Y-o-Y Change 43.2% 23.1% -14.0% Audited FY2010 30.98 0.03 0.1% Y-o-Y Change -36.7% -99.3% -98.9% Audited FY2011 30.16 (0.57) -1.9% Y-o-Y Change -2.6% -2000.0% -2000.0%
Property Investment
FYE 31 Dec (RM million) Revenue Gross Profit Gross Profit Margin Audited FY2008 Audited FY2009 Y-o-Y Change Audited FY2010 Y-o-Y Change Audited FY2011 5.06 3.29 65.0% Y-o-Y Change -
Property investment income was mainly derived from the rental of property held for investment during 2011, including the launch of Naims Hypermall Shopping Mall in Miri, Sarawak in Nov 2011.
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Note: Since Naim was listed in 2003, it has consistently rewarded its shareholders with unbreakable dividend track record since its first full financial year of 2003 until 2011. However, the dividend payout ratio has to be adjusted lower in 2009 & 2010 in view of economy recession and early recovery of economy, where Naim had set its priority to preserve its cash resources during that challenging period.
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Net Dividend Per share Total (RM (sen) million) 3.24 3.24 6.48 3.60 5.04 8.64 5.04 3.60 8.64 10.8 10.80 5.11 5.84 10.95 8.10 8.10 16.20 8.952 12.465 21.417 12.465 8.802 21.267 26.405 26.405 12.494 14.278 26.772
2003
28%
2004
28%
2005
28%
2006
28%
11.25 11.25 22.50 12.50 17.50 30.00 17.50 12.50 30.00 37.50 37.50 17.50 20.00 37.50
2007
27%
2008
26% (Note)
2009
2010
2011
Note: With effect from 2008, all the subsequent dividend payout is base on tax exempt single tier dividend where gross and net dividend per share are the same. However, the actual net dividend payout is still lower than indicative gross dividend due to Naim is exempted from paying dividend to its treasury shares.
45
46
6,546,000 12,055,000
Shareholding Statistics
48
Shareholding Structure
49
50
Continue to expand into new markets and reap recurring income from investment property Property investment assets will continue to provide consistent rental incomes Plan to develop our prime land bank near Bintulu Airport over next 5 years
Construction order book is expected to improve in 2012 and beyond Bidding more than RM2 billion value of projects
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Street Mall
Total
Kuching/Kota Samarahan 2Q 2012 Riveria Service Apartment
Total
Bandar Baru Permyjaya, Miri 1Q 2012 1Q 2012 2Q 2012 2Q 2012 3Q 2012 3Q & 4Q 2012 Total
Semi Detached & Detached Shop lot Semi Detached, Detached & Terrace Shop lot Shop lot Semi D, Terrace, Apartment & Shop lot
RM40 million RM50 million RM135 million RM45 million RM80 million RM50 million RM400 million RM600 million
Grand Total
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37
5 5 16 991 2,620
251
91 37 92 1,447 9,527
Note: Land size and GDV are estimates only and are subject to changes.
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2 3
4.5 42.0
91 2,321
4 5
83 959
22 1,807
1
2 3
4 5 6
Riveria Perdana, Mixed development township, Kota Samarahan residential projects New Samalaju Township (Bintulu) Township for residential accommodation and supporting amenities
55
Land Bank 1,033 acres SIBU Timber Pop est. 257,800 Land Bank 0 acres Current Land Bank - 2,620 ac KOTA SAMARAHAN Education and Medical Hub Pop est. 85,495 Land Bank 463 acres Potential Land Bank 7,177 ac
KUCHING Capital City Pop est. 634,500 Land Bank 123 acres
Slide 56
2010
2015
2010
2015
Source: CH Williams Talhar Wong & Yeo Sdn Bhd. May 2010
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Various companies are coming to SCORE, such as Tokuyama Malaysia Sdn Bhd, OM Materials Sarawak Sdn Bhd, Asia Minerals Ltd and Press Metal Bhd.
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4.0
2.5 1.5 6.0 1.2 4.0 4.0
3.5
4.0 4.0 4.0 6.0 47.7
(RM4.0b)
Bintulu
Pulp and Paper Mill (RM4.0b) Bintulu Samalaju Port (RM1.2b) Balingian Coal Fired Plant (RM2.5b) LNG Train 9 (RM6.0b)
(RM4.0b)
Central oil distribution terminal Palm oil industrial cluster Integrated port Halal hub
(RM3.5b)
(RM4.0b)
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Analysts Valuations
Date Forecast Net Forecast Net Profit FY2012 Profit FY2013 (RM million) (RM million) Target Price (RM)
AmResearch
TA Securities Kenanga Research
28 May 2012
28 May 2012
55.5
73.9
71.1
76.5
2.88
2.57
28 May 2012
73.7
86.6
2.94
Simple Average
67.7
78.1
2.80
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Historical Valuation
Year 2003 2004 2005 2006 2007 2008 2009 2010 2011
EPS (sen) # 19.39 27.84 32.04 27.09 31.20 33.32 35.85 41.25 19.68
NTA/Share (RM) 1.52 1.69 1.84 1.95 2.15 2.35 2.61 2.86 2.95
6.10 1.10
At the highest price of Naim at RM 6.10 in 2007, it was traded at 19 times PER and close to 3.0 times book value base on 2007 EPS and NTA per share At the lowest price of Naim at RM 1.10 in 2008, it was traded at 3 times PER and close to 0.5 times book value base on 2008 EPS and NTA per share
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69
Thank You
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Appendices
71
Board of Directors
Datuk Abdul Hamed Bin Haji Sepawi Chairman Sulaihah Binti Maimunni Executive Director Datu (Dr) Haji Abdul Rashid Bin Mohd Azis Independent NonExecutive Director Haji Jeli Bohari Bin Biha @ Jeli Umik Independent NonExecutive Director Professor Dato Abang Abdullah Bin Abang Mohamad Alli Independent NonExecutive Director
Datuk Haji Hamden Bin Haji Ahmad Senior Independent Non-Executive Director
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2003
The Malaysia Construction Industry Excellence Award
2004
The Malaysia Construction Industry Excellence Award Industry Excellence for Construction Award Builder Of The Year Award
2008
Property Man of The Year by FIABCI MALAYSIA
2007
Malaysia Construction Industry Excellence Award (MCIEA) 2007 Contractor Award : Grade G7
2005
KPMG Shareholder Value Award Construction & Properties Sector Corporate, Social & Environment Responsibility Award 17th International Construction & Global Quality Management Award
2009
SHEDA Excellence Awards Top Developer in Residential Development for Public Listed Group
2010
The Sarawak Chief Minister's Environmental Award 2010
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646.02
146.72 22.71% 126.33 19.55% 80.14 76.27 31.20
523.72
108.18 20.66% 104.30 19.92% 83.07 80.75 33.32
566.92
129.53 22.85% 115.53 20.38% 84.99 84.98 35.85
612.69
164.44 26.84% 132.04 21.55% 99.91 97.75 41.25
EPS (sen)
19.68
FY2011 represents one of the lowest revenue and profitability achieved by Naim in a single financial year, comparatively from FY2007 to FY2011.
75
76.40
66.90
84.50
96.00
39.23
The normalised profit after tax and normalised net profit attributable to shareholders included profits from associates companies and joint ventures.
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2.12
49.96 0.53 50.49 558.26 0.09 93.09 42.60 539.32
2.15
54.05 3.44 57.49 611.88 0.09 57.12 (0.37) 587.65
2.09
130.92 10.08 141.00 674.32 0.21 90.10 (50.90) 652.36
2.47
104.40 20.71 125.11 739.46 0.17 39.21 (85.90) 724.02
5.43
7.91 339.09 347.00 763.50 0.45 213.46 (133.54) 747.18
2.16 250
2.35 250
2.61 250
2.90 250
2.99 250
All the Net Assets/Share were calculated based on share capital of 250.0 million ordinary shares for year-on-year comparison purpose. 77
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