2016 SunRice Update. Laurie Arthur, SunRice Chairman Rob Gordon, SunRice CEO. 6 9 June 2016

Transcription

1 2016 SunRice Update Laurie Arthur, SunRice Chairman Rob Gordon, SunRice CEO 6 9 June 2016

2 Agenda SunRice FY16 (C15) guidance World markets Capital Restructure Your questions and comments 2

3 FY16 Business performance FY16 (C15) results to be announced in June 2016 Challenging trading environment and market conditions during the second half of FY16 Excellent domestic and international consumer market sales demonstrate SunRice s ability to leverage brand strength Subject to audit, strong financial performance in line with last year anticipated SunRice remains well positioned for the future, but anticipates a more challenging year in FY17 3

4 FY17 (C16) Outlook Challenging trading environment in world rice markets Impacts in dairy industry likely to affect domestic sales for CopRice Potential PNG issues continue to be closely monitored, including: - Exchange rate movements (Kina has declined almost 20% against the US$ since Jan 2015) - Government policy changes - Overall macroeconomic outlook PNG Kina liquidity issues have the potential to materially impact SunRice s business in PNG in FY17: - E.G. A sudden Kina devaluation is likely to considerably reduce trading margins and reduce the intercompany receivable from Trukai to SunRice

5 Track record of delivery Strong track record of accurate market guidance for A and B Class Shareholders Demonstrated ability to balance the needs of both shareholder classes since converting to a company in 2005 and listing on the NSX in 2007 Between FY12 (C11) and FY15 (C14): - 110% increase in earnings per B Class Share and 72% dividend appreciation - 44% increase in paddy price paid per tonne for Reiziq Board continues to pursue strategies to increase value to all shareholders 5

6 7/30/2014 8/29/2014 9/28/ /28/ /27/ /27/2014 1/26/2015 2/25/2015 3/27/2015 4/26/2015 5/26/2015 6/25/2015 7/25/2015 8/24/2015 9/23/ /23/ /22/ /22/2015 1/21/2016 2/20/2016 3/21/2016 4/20/2016 5/20/2016 $USD per tonne C16 Global pricing Medium Grain $ $ $ $ $ Crop USA California 21-Month Cash Paddy Prices Cash Rice Network / Cal Rice Exchange 2014 Crop USA 2015 Crop USA Japonica surpluses still exist in China and Taiwan US MG prices have halved since mid 2014 Spot paddy cash prices continue to trade at lowest level of the US marketing year Drought-breaking rains are boosting anticipated planted area $ $ US growers are also being required to move or sell old stock by storage sheds and banks $ April-May paddy sales pricing estimated to be $60-75 per tonne under the Californian cost of production Cash Trading Date Note: Cash price does not include storage and drying costs, which are deducted from this amount Egypt has switched from exporting to importing ahead of Ramadan Source: SunRice 6

7 2013 Jan 2013 Feb 2013 Mar 2013 Apr 2013 May 2013 Jun 2013 Jul 2013 Aug 2013 Sep 2013 Oct 2013 Nov 2013 Dec 2014 Jan 2014 Feb 2014 Mar 2014 Apr 2014 May 2014 Jun 2014 Jul 2014 Aug 2014 Sep 2014 Oct 2014 Nov 2014 Dec 2015 Jan 2015 Feb 2015 Mar 2015 Apr 2015 May 2015 Jun 2015 Jul 2015 Aug 2015 Sep 2015 Oct 2015 Nov 2015 Dec 2016 Jan 2016 Feb 2016 Mar 2016 Apr 2016 May C16 Global pricing Long Grain *Creed Thai LG 100% B Thai Long Grain Pricing - US $ / mt Thai Long Grain *Selling prices listed are in U.S. dollars per tonne and for Finished Product tonnes (includes costs for milling and yield losses, packing, distribution and administrative charges) 2016 Thai rice export projections revised from 10 to 9 million metric tonnes due to drought Prices have increased due to dwindling stockpiles and the effects of El Niño 74 of the country s 77 provinces are drought-affected, with dry conditions set to continue until the monsoon season starts In April, paddy supplies tightened as exporters covered a sale of 130,000 metric tonnes to China Bullish sentiment encouraged by news that off-season crop production is expected to be reduced by up to 60% 7

8 World markets outlook A more challenging trading environment, particularly for Medium Grain as prices come off Conversely, Thailand s drought is driving Long Grain prices up Lower Riverina production has resulted in intensified global sourcing activities for SunRice Riverina paddy pricing will continue to be impacted by global supply and demand mechanics and SunRice s business needs 8

9 9 Capital Restructure update The Capital Restructure is designed to equip SunRice and all growers and shareholders for the future, enabling the company to: - Invest for growth; - Better manage business risk; and - Have greater resilience to benefit all growers and shareholders Significant time and resources have been invested to develop a structure that enables SunRice to realise these outcomes while preserving both: - Existing grower shareholder control; and - Existing economic rights of SunRice B Class investor shareholders

10 10 Capital Restructure update Timing is being impacted by developments with a joint venture (JV) partner, which recently decided SunRice s proposed Capital Restructure justifies its own review of JV arrangements SunRice is working cooperatively on the review, which is in no way impacting on the JV s trading operations We will be progressing with the Capital Restructure once the JV issue is resolved The timetable for any vote will now also take into account the need to re-establish the strong support received from growers and shareholders to date, particularly in light of recent developments in the dairy industry The Board remains firmly committed to the success of the Capital Restructure and its ability to deliver a strong future for SunRice and all shareholders

11 QUESTIONS