TDM meeting , 2nd Aug 2012.
Reps met: Amir Mohd Hafiz ( CFO)
Abdul Khalif Salleh ( Group Head Healthcare)
Strategy;
a) Co will be streamlining it’s portfolio to just 2,
ie Plantation & Healthcare. Before 2004, it had about 10 different
portfolios, down to 4 ( plantation, healthcare, poultry & hotel by 2009),
& was brought down to just 2 by 2011. To focus to what they do best now.
Even on plantation, will just be involved on planting, no upstream or
downstream activities planned.
Plantation
-
Co currently has 39,033 ha ( 83% in Trengganu, 17% in
Kalimantan). 84% aged between 4-20 years. Group land-bank in Kalimantan 36.775
ha. TDM plans to plant 7000 ha /year from 2012-2018. ( of this 7000 ha, 5000ha
will be on INTI basis, while 2000 on PLASMA. INTI refers to development of Co’s
own plantation, while PLASMA is for the cultivation of plantation land for the
local community in Indonesia. The cost of developing the PLASMA will be borne
by the community with TDM managing on behalf). Cost per ha of replanting @
RM10k/ha, new planting @ RM15/ha. Total capex for 2013 RM40-50m.
-
profits from plantation mostly from planting, minimal
from the mill processing business.
-
FFB production for 1HY 2012 is 8% lower than 1HY 2011.
But, as per usual cycle, pdtn expected to improve from July onwards. ( July mom
+48% over June). YTD ASP at RM3200, expect this to fall to RM3000 for 2HY2012.
( RM3200 fro 1HY2011 as well).
-
Agency cost vs PBT stands at only 18%, one of the
lowest in the industry. This is an indication of it’s efficient production
level.
Healthcare
-
Currently has 4 hospitals ( Taman Desa, Kelana Jaya,
Kuantan & Kuala Trengganu), either 100% owned on close to that ( partially
owned by doctors).
- Co to sell itself as provider of secondary care, community based
healthcare service provider. “ Convenience” to be a main consideration when
deciding on location or feasibility of new hospitals acquired.
-
Healthcare div
to contribute about RM10m for 2012. Currently building 2 new hospitals ( 150
beds each), 1 in Kuantan & 1 in K Trengganu to relocate the current
operations. Present facilities insufficient to cater to growing needs. Capex
about RM150m per hospital. Funding to be a mix of internal funds & bank
financing.
-
Co do not
expect the PAT mix between plantation & healthcare to change much in the
coming 3-5 years.
Others
-
HY results to
be announced next week.
-
Stock
illiquidity, no immediate plans to address issue, may do so later.
-
IR activities
: management only actively meeting market players the past 6-7 months. Reckons
low volume traded on shares due to it’s smallish size, small free float (65%
owned by Trengganu Inc & PACs), and possibly legacy issues.
