15 August 2012 | E | If t tI...2012/08/15 · UMScontinues to serve clients from its Ayudhya Plant at ly significantlyhigher costs 2011 SamutSakorn Plant has been shutdown for more

Thoresen Thai Agencies Plc.

3QFY12 Earnings UMS Goodwill Impairment

15 August 2012 T t | E | I f t t15 August 2012 Transport | Energy | Infrastructure

TTA: 3QFY12 Briefing

AgendaAgenda

3QFY12 net profit 3QFY12 net profit UMS goodwill impairment Business‐unit performance reviewBusiness unit performance review Q&A

Page 2 | 3QFY12 Briefing


3QFY12 Net Profit3QFY12 Net Profit Goodwill Impairment Performance Review3QFY12 Net Profit3QFY12 Net Profit Goodwill Impairment Performance Review

1,000 Reported Net Profit/(Loss) Baht millions

332

‐

500

3QFY11

2QFY12 3QFY12

(205)

(1,000)

(500)

Q

Baht 2,319 millionUMS G d ill I i

(2,000)

(1,500) UMS Goodwill Impairment

(2,351)

Page 3 | 3QFY12 Briefing Transport | Energy | Infrastructure


3QFY12 Net Profit Goodwill ImpairmentGoodwill Impairment Performance Review3QFY12 Net Profit Goodwill ImpairmentGoodwill Impairment Performance Review

2009 2011 2012RationaleRationaleRationaleRationaleUMS is working through significant challenges in its business

Jul 2011Jul 2011Jul 2011Jul 2011 All coal operators in Samut Sakorn

ordered to seize operations after protests from environmental groups

UMS continues to serve clients from its Ayudhya Plant at significantly higher costsly

2011

significantly higher costs Samut Sakorn Plant has been

shutdown for more than 12 months with continuing risks

mCh

ad Lue

k: 14 Ju

over a permanent reopening of this plant

Khom

Page 4 | 3QFY12 Briefing Transport | Energy | Infrastructure


3QFY12 Net Profit Performance ReviewGoodwill ImpairmentGoodwill Impairment3QFY12 Net Profit Performance Review

2009 2010 2011 2012RationaleRationale

Goodwill ImpairmentGoodwill Impairment

RationaleRationaleUMS is working through significant challenges in its business

Dec 2011Dec 2011Flows of 0‐5 mm coal sales Dec 2011Dec 2011 Samut Sakorn has placed three conditions

to reopen the Plant, including Removal of 0‐5 mm inventory,

Flows of other‐sized coal sales

Improvements to the port and warehouses, and

Waste water treatment upgrades Decision made to aggressively sell Decision made to aggressively sell

0‐5mm coal inventory to cement plants in Saraburi to resume the original, high‐efficiency two‐plant operations as soon as possible

High transport costs resulted in losses at EBITDA level

54% of the stockpile roughly 245 000

BangkokBangkok

Transport | Energy | Infrastructure

54% of the stockpile, roughly 245,000 tonnes have been removed and sold







Bangkok Bangkok Bangkok

Prior to Jul‐11:Normal two‐plant

Jul‐11 to Oct‐11:One‐plant operations

dh l l

Oct‐11 to Dec‐11:No operations

b l

Dec‐12 to Now:One‐plant operations

h l foperations Ayudhya Plant also serving customers in Samut Sakorn

in Oct‐Nov, but sales affected well into Jan‐12

with aggressive sales of 0‐5mm inventory to be able to petition for reopening of Samut Sakorn Plant

Transport | Energy | InfrastructurePage 6 | 3QFY12 Briefing






122122

75

UMS EBITDAas consolidated on TTA’s P&L

Bangkok Bangkok Bangkok

44

7 17

Prior to Jul‐11:Normal two‐plant

Oct‐11 to Dec‐11:No operations

b l

Jul‐11 to Oct‐11:One‐plant operations

dh l l

Dec‐12 to Now:One‐plant operations

h l f

7 (15)

operations in Oct‐Nov, but sales affected well into Jan‐12

Ayudhya Plant also serving customers in Samut Sakorn

with aggressive sales of 0‐5mm inventory to be able to petition for reopening of Samut Sakorn Plant

(54)


1QFY11 2QFY11 3QFY11 4QFY11 1QFY12 2QFY12 3QFY12





RationaleRationaleContinuing risks to permanently reopening

Samut Sakorn Provincial Government mandated three pre‐conditions for any reopening of the Samut Sakorn Plant: Complete removal of 0‐5 mm coal inventory, Upgrades to the port and flooring of its warehouse, and Improvements to the waste water treatment systemImprovements to the waste water treatment system.

The Plant has been closed for 12 months, even as it meets or exceeds all government environmental standards. Its ability to recommence operations, even after meeting three pre‐conditions, remains beyond TTA’s control.g p , y

Currently, weak coal prices could cause wider losses for the rest of 0‐5 mm coal stock reduction program

Given the continuing risks over a permanent reopening of the Plant, BOD asked forGiven the continuing risks over a permanent reopening of the Plant, BOD asked for a mid‐year review of this investment




2009 2010 2011 2012MethodologyMethodology


MethodologyMethodologyRecalculation of value‐in‐use

BOD mandated a number of forward operating assumptions to calculate value‐in‐use that capture the adverse external conditions UMS is operating under

UMS’ value‐in‐use has decreased significantly based on those conservative assumptions

The calculation of value‐in‐use was performed using projected free cash flows covering the next five years

Cash flows beyond the five‐year period were extrapolated using the estimated growth rates and a discount rate of 3.6% and 14%, respectively

A non‐cash impairment loss against goodwill of THB 2,319 million was recognised in our Q3FY2012 income statement

332 500

1,000 Reported Net Profit/(Loss) Baht millions

(205)

(1,500)

(1,000)

(500)

‐3QFY11

2QFY12 3QFY12

Baht 2,319 millionUMS Goodwill Impairment


(2,000)

(2,351)


3QFY12 Net Profit Performance ReviewPerformance ReviewGoodwill Impairment3QFY12 Net Profit Performance ReviewPerformance Review

2009 2010 2011 20123QFY12 Results Snapshot3QFY12 Results Snapshot

Goodwill Impairment

3QFY12 Results Snapshot3QFY12 Results SnapshotStrong operating results

B ht illi 3QFY11 2QFY12 3QFY12 % %Baht millions 3QFY11 2QFY12 3QFY12 %yoy %qoq

Revenues 4,376 3,529 4,810 10% 36%

Costs 3,307 2,819 3,608 9% 28%

Gross profits 1,069 710 1,201 12% 69%

SG&A 519 480 525 1% 9%EBITDA 551 230 677 23% 194%

EBIT 213 (116) 350 64% 402%

Profits before EI (16) (281) 130 900% 146%

Extraordinary items 310 (19) (2 333)Extraordinary items 310 (19) (2,333) Minority interests (28) 51 (56) Forex impacts 65 43 (92) Net profit 332 (205) (2 351) 809% 1045%


Net profit 332 (205) (2,351) ‐809% ‐1045%



3QFY12 Net Profit Performance ReviewPerformance ReviewGoodwill Impairment3QFY12 Net Profit Performance ReviewPerformance ReviewGoodwill Impairment

Thoresen ShippingThoresen ShippingThoresen ShippingThoresen ShippingIncreasingly resilient in low freight rate environment

Effective cost control, higher efficiency

3003 000

,BDI (quarter average)Normalised EBIT

BDI

Breakeven at lower fleet TC rates Increased chartered‐in vessels at the bottom of the cycle

2,364

1,365 1,379 1,534 1,928

1,024128

200

300

2,000

3,000 B Thor Insuvi to add to operating results in 4QFY12

867 1,024

22 41

0

100

0

1,000

Baht Millions

(59)(17)

(71)

(6)

‐100‐1,000

EBIT


‐200‐2,000

T




3QFY12 Net Profit Performance ReviewPerformance ReviewGoodwill Impairment3QFY12 Net Profit Performance ReviewPerformance ReviewGoodwill Impairment

Mermaid MaritimeMermaid Maritime Subsea vessels were 78.3% utilised Drilling rigs were 76.3% utilised MTR‐1 resumed work in mid‐May

Mermaid MaritimeMermaid MaritimeOperating through its high season

+123%

y Both rigs contracted through November 2011

Effective cost control, higher 333400Baht MillionsT

efficiency

Subseavessel utilisation rate

347

333

200

300

EBIT

As consolidated

75.7% 89

.4%

55.3% 59.0%

78.3%FY11 FY12

Subsea vessel utilisation rate149

(38) (60)0

100 Calendar‐da

As consolidated on TTA’s P&L

49.2%

51.9%

7

(109)(142)‐200

‐100

FY11 FY12monsoon season

ay utilisation rate

Q1 Q2 Q3 Q4


‐300Q1 Q2 Q3 Q4


3QFY12 Net Profit Performance ReviewPerformance ReviewGoodwill Impairment



BaconcoBaconcoBaconcoBaconcoStrong performance for Baconco

Delayed fertiliser purchases materialised in 3QFY12

93 EBITBaht Millions

Delayed fertiliser purchases materialised in 3QFY12 Export markets helped drive sales and profits Pressures on margins continued to ease All warehouses 90%+ utilised,

64 76 79

40 47 39

T

,New project to add 30,000 sq.m.over next 2 years

400

00

00

600

00 61,800

UMETonnes

13 8% 14.3%ARGI

NS

51,

46,30

46,00

50,6

46,30

35,800

VOLU11.3%

13.8%

8.6% 9.2% 9.9%12.2%

GROS

S M

Q1 Q2 Q3 Q4 Q1 Q2 Q3



V2011 2012





Unique Mining ServicesUnique Mining Services Flowsof 0‐5 mm coal salesUnique Mining ServicesUnique Mining ServicesGood progress of 0‐5mm sales, resulting in losses

VOLUME

Flows of other‐sized coal sales

Flows of 0 5 mm coal sales

350

400

450

300,000

400,000

500,000

0‐5mm SS0‐5mm NLOther sizes SS

VOLUMETonnes

Bangkok

fl di

200

250

300

0

100,000

200,000 Other sizes NL

Initiatives as back‐up plan:

flooding

109

61 29 50

100

150

‐300,000

‐200,000

‐100,0001QFY11 2QFY11 3QFY11 4QFY11 1QFY12 2QFY12 3QFY12

Normalised EBITBIT

p p Alternative production site Floating terminals Run‐of‐mine coal imports

(7) (1)

(35)

(70) ‐100

‐50

0

‐600,000

‐500,000

‐400,000

,

EB

Baht Millions Profitability expected to return once the Samut Sakorn plant is reopened or alternative solution


(70),is implemented





Strong operating resultsStrong operating resultsStrong operating resultsStrong operating results

Income statement

... But overshadowed by the goodwill impairment charge

Baht millions 3QFY11 2QFY12 3QFY12 %yoy %qoq

Revenues 4,376 3,529 4,810 10% 36%

Freight charges 1,212 753 934 ‐23% 24% Offshore services 1,454 996 1,753 21% 76%S l 1 640 1 705 2 045 25% 20%

(281)130 310

3QFY113QFY11

2QFY122QFY12 3QFY123QFY12

Sales 1,640 1,705 2,045 25% 20%

Costs 3,307 2,819 3,608 9% 28%

Gross profits 1,069 710 1,201 12% 69%

SG&A 519 480 525 1% 9%EBITDA 551 230 677 (2 333)

Profits before EIExtraordinary itemsMinority interests

EBITDA 551 230 677 23% 194%

EBIT 213 (116) 350 64% 402%

Profits before EI (16) (281) 130 900% 146%

Extraordinary items 310 (19) (2,333) Mi it i t t (28) 51 (56)

(2,333)Forex impacts

B h 2 319Minority interests (28) 51 (56) Forex impacts 65 43 (92) Net profit 332 (205) (2,351) ‐809% ‐1045%

Baht 2,319UMS Goodwill Impairment





Financial positionFinancial positionFinancial positionFinancial positionTTA remains financially sound

/30 S 11 30 J 12

0.74D/E

30‐Sep‐11 30‐Jun‐12

Cash & cash equivalent 3,797 4,409 Short‐term investments 984 1,059 Goodwill, net 3,817 1,499

0.56

0 27

0.45 0.470.57Total assets 48,032 45,585

Short‐term debts 3,685 3,522 Long‐term debts 10,688 12,099 Total liabilities (TL) 17 216 18 083 0.27

0.22Total liabilities (TL) 17,216 18,083 Retained earnings 21,487 18,016 Total equities (TE) 30,816 27,502 TL/TE 0.56 0.66

Sep‐06 Sep‐07 Sep‐08 Sep‐09 Sep‐10 Sep‐11 Jun‐12D/E 0.47 0.57 Net D/E 0.31 0.37





Cash flowsCash flowsCash flowsCash flowsStrong improvement in cash flow generating ability

9 th

1,163NET OPERATINGCASH FLOWS

9‐month

807

CASH FLOWS

‐1059MFY129MFY12

9MFY119MFY11

9MFY109MFY10


105



3QFY12: operationally strong 3QFY12: operationally strong with one large nonwith one large non cashcashwith one large nonwith one large non‐‐cash cash goodwill impairment charge…goodwill impairment charge…


Thoresen Thai Agencies Plc.

3QFY12 Earnings UMS Goodwill Impairment

15 August 2012 T t | E | I f t t15 August 2012 Transport | Energy | Infrastructure

Documents

15 August 2012 | E | If t tI...2012/08/15 · UMScontinues to serve clients from its Ayudhya Plant at ly significantlyhigher costs 2011 SamutSakorn Plant has been shutdown for more