Ann Joo Resources Bhd. · MYX:ANNJOO
Ann Joo Resources Bhd — Shareholder Meeting (June 2022)
26 slides from Ann Joo Resources Bhd's shareholder meeting presentation, Jun 15, 2022
Slide 1: 26th Annual General Meeting
26th ANNUAL GENERAL MEETING Presents by: Dato’ Lim Hong Thye, Group Managing Director 15 June 2022
Slide 2: Part 01: 2021 Review
Part 01 2021 Review 2
Slide 3: Scorecard – Review of 2021 Strategic Initiatives
SCORECARD – REVIEW OF 2021 STRATEGIC INITIATIVES RECORD NET PROFIT EXPORT @ RM243M SALES TONNAGE Optimise ❑ Revenue ↑ 26% Aggressive Financial ❑ Export tonnage to China & Exports ❑ Net profit ↑ 343% due Performance SEA countries to ↑ steel prices (vs ❑ Exports @ 47% of MD RM100m Net Loss in 2020) sa
Slide 4: Group Performance Highlights (2021 vs 2020)
GROUP PERFORMANCE HIGHLIGHTS (2021 VS 2020) RECORD PERFORMANCE AMID CHALLENGING LANDSCAPE REVENUE PROFIT/(LOSS) AFTER TAX NET ASSETS NET GEARING RM2,396M RM243M RM1,323M 0.72X (2020: RM1,891M) PAT Margin: 10.14% (2020: RM1,106M) (2020: 0.78x) (2020: LAT RM100M) 26.71% 343% 19.62% 7.69% SOARING STEEL
Slide 5: International Steel Prices vs Malaysia Steel Prices
INTERNATIONAL STEEL PRICES VS MALAYSIA STEEL PRICES 1H2021 : STEEL PRICES ON UPWARD TREND IN TANDEM WITH STRONG MARKET RECOVERY 2H2021 : HEIGHTENING PRICE VOLATILITY INTERNATIONALLY VS DOMESTIC PRICE MOVEMENT RELATIVELY STABLE RM/MT MALAYSIA vs INTERNATIONAL STEEL PRICE (RM/MT) 4,600 Malaysia Rebar
Slide 6: Market Cap of Malaysia Steel Players
MARKET CAP OF MALAYSIA STEEL PLAYERS MARKET CAPITALIZATION (1996 – 30.5.2022) To Date Oct 2011 AJ continues to be the largest steel 1996 2008 AJ’s BF counter by market cap despite AJ listed on Subprime Commissioned challenging market landscape RM’mil main market Oct 2007 Crisis Merger of AJR & 2016-
Slide 7: Part 02: Financial Performance
Part 02 Financial Performance 7
Slide 8: Financial Highlights 2021
FINANCIAL HIGHLIGHTS 2021 RM’000 2021 2020 Y-o-Y % INCOME Revenue 2,395.7 1,891.2 ↑ 26.7% ➢ ↑ revenue due to ↑ average selling STATEMENT prices of steel products EBITDA 339.2 19.5 ↑ 1,639.5% Pretax Profit/(Loss) 255.7 (74.3) ↑ 444.1% ➢ ↑ profit due to ↑ average selling price despite ↑ in one-off exp
Slide 9: 2021's Revenue & Profitability
2021’S REVENUE & PROFITABILITY RECORD PERFORMANCE ATTRIBUTABLE TO HIGHER STEEL PRICES & IMPROVED PROFIT MARGIN REVENUE (RM’Mil) PROFITABILITY (RM’Mil) PBT/(LBT) PAT/(LAT) 2021 2,396 256 2021 243 2020 1,891 (74) 2020 (99.99) 2019 2,221 (162) 2019 (90) 150 2018 2,322 2018 150 2,195 253 2017 2017 205 9
Slide 10: Key Current Assets & Liabilities Position
KEY CURRENT ASSETS & LIABILITIES POSITION Key Current Assets & Liabilities Position (RM’mil) Inventories Net Receivables* Net Borrowings (Trade lines) Net Gearing Ratio 1,325 1,393 1,095 240 1,129 344 967 971 1,003 957 248 257 857 789 269 0.81 0.78 1,085 0.73 0.72 0.64 967 971 1049 957 847 789 872 8
Slide 11: Long-Term Financial Performance
LONG-TERM FINANCIAL PERFORMANCE ANN JOO GROUP PROFIT AFTER TAX (RM’Mil) 2021 Ann Joo’s 2007 2016 Record Profit 2006 Privatisation China steel AJSB (Malayawata) became of AJSB sector reform 2020 subsidiary of AJR 243 Emergence 198 2013-2015 205 of Covid-19 2000 China Factor : Pandemic Malayawata’s Ma
Slide 12: Performance Highlights: 1Q2022 vs 4Q2021
PERFORMANCE HIGHLIGHTS : 1Q2022 VS 4Q2021 LOWER REVENUE BUT HIGHER PROFIT ON LOWER ONE-OFF EXPENSES REVENUE PROFIT AFTER TAX NET ASSETS NET GEARING RM673M RM32.9M 0.66X PAT Margin: 4.89% RM1,376M (4Q21: RM739M) (4Q21: 0.72x) (4Q21: RM16.5M; 2.24%) (4Q21: RM1,323M) 8.9% 99.4% 3.1% 8.3% STEEL, FUEL &
Slide 13: Financial Highlights 1Q22
FINANCIAL HIGHLIGHTS 1Q22 RM’000 1Q22 4Q21 Q-o-Q % 1Q22 vs 4Q21: INCOME Revenue 673.2 739.3 ↓ 9% STATEMENT ➢ ↓ revenue mainly due to ↓ sales EBITDA 62.6 31.2 ↑ 101% tonnage for both domestic and export Pretax Profit/(Loss) 42.2 10.3 ↑ 310% markets Basic EPS (sen) 6.01 3.05 ↑ 97% ➢ ↑ pretax profit ma
Slide 14: Financial Performance of Long-Product Producers
FINANCIAL PERFORMANCE OF LONG-PRODUCT PRODUCERS Yearly Profit /(Loss) Before Tax Quarterly Profit /(Loss) Before Tax (2021 vs 2020) (1Q22 vs 4Q21) (RM’000) 2021 (RM’000) 1Q22 2020 4Q21 255,665 42,184 Ann Joo Ann Joo (74,306) 10,336 5,888 153,381 Southern Southern 40,301 (82,183) (29,054) 421,326 * L
Slide 15: Part 03: Industry Outlook
Part 03 Industry Outlook 15
Slide 16: 2022 Key Market Dynamics
2022 KEY MARKET DYNAMICS HIGH VOLATILITY IN CHINA ECONOMIC RECOVERY PACE COMMODITY PRICES ❑ Slowing property sector ❑ Volatile Coking Coal prices influenced by: ❑ Ongoing tensions with Western world ➢ supply tightness caused by Australia ❑ China’s Covid Lockdowns hit manufacturing, logistic & weathe
Slide 17: International Steel Prices vs Malaysia Steel Prices
INTERNATIONAL STEEL PRICES VS MALAYSIA STEEL PRICES REGIONAL STEEL PRICE DISPARITY : CHINA’S COVID LOCKDOWNS & RUSSIA-UKRAINE CONFLICTS RM/MT MALAYSIA vs INTERNATIONAL STEEL PRICE (RM/MT) Malaysia Rebar Price (RM/mt delivered) China Domestic Shanghai Rebar HRB400 (EXW) 4,600 * MS 146 standard ≈ HRB
Slide 18: Key Raw Material Prices – Iron Ore & Scrap
KEY RAW MATERIAL PRICES – IRON ORE & SCRAP Iron Ore Price (2021-2022) Scrap Price (2021-2022) Scrap HMS, East Asia Import CFR $/t Scrap HMS, Turkey CFR $/t USD/MT IODEX 62% Fe / North China import CFR As at 230 As at USD/MT 14 Jun 22 14 Jun 22 620 190 560 150 500 110 440 70 380 Jan-21 Mar-21 May-21
Slide 19: Key Fuel Prices – Coking Coal & Coke
KEY FUEL PRICES – COKING COAL & COKE RECENT COKING COAL PRICE VOLATILITY CAUSED BY RUSSIA-UKRAINE WAR : GLOBAL ENERGY SUPPLY CHAIN DISRUPTIONS USD/MT Premium Hard Coking Coal (PHCC) & Met Coke Price (2021-2022) Nov 2021 850 Sharp decline on China’s effort to cool overheating coking coal price May 20
Slide 20: Malaysia Export & Import Tonnage
MALAYSIA EXPORT & IMPORT TONNAGE MALAYSIA LONG PRODUCT EXPORT MALAYSIA LONG PRODUCT EXPORT DECLINED SURPASSED 7 MIL MT FOR 2 CONSECUTIVE YEARSH ON WEAKER CHINA DEMAND Yearly Malaysia Long Products Export & Import (‘000 Quarterly Malaysia Long Products Export & Import MT) (‘000 MT) Export - Bar Impor
Slide 21: China Export & Import Position
CHINA EXPORT & IMPORT POSITION CHINA EXPORT & IMPORT INFLUENCED BY CHINA WEAK DOMESTIC DEMAND CHINA’S POLICIES ON STEEL TRADE LED TO DECLINING IMPORT Yearly China Steel Export & Import Quarterly China Steel Export & Import (‘Mil MT) (‘Mil MT) Export - Finished Steel Import - Finished Steel Export -
Slide 22: Part 04: Strategic Direction
Part 04 Strategic Direction 22
Slide 23: Strategic Direction
STRATEGIC DIRECTION PROACTIVE WORKING CAPITAL MANAGEMENT 1 Proactive inventory management and receivables collection on the back of surging raw material & fuel costs as well as volatility in foreign currency exchange rate AGGRESSIVE EXPORTS 2 Continue to actively export to regional countries, where
Slide 24: Thank You
THANK YOU KEY STEEL INDUSTRY WEBSITES INCLUDE: 1. miti.gov.my 2. steelbb.com 3. mysteel.net 4. seaisi.org 5. worldsteel.org
Slide 25: Investment Research on Ann Joo
Investment research on Ann Joo 25
Slide 26: Research Reports Based on 1Q22 Results
RESEARCH REPORTS BASED ON 1Q22 RESULTS RESEARCH HOUSE DATE OF RECOMMENDATION TARGET PE NET PROFIT EPS REPORT PRICE (X) (RM MIL) (SEN) (RM) FY22 FY23 FY22 FY23 FY22 FY23 KAF-Seagroatt & 30/05/2022 Buy 2.30 5.4 3.9 165.8 229.2 27.0 37.3 Campbell Securities Kenanga 30/05/2020 Underperform 1.25 17.4 20.