The DSN Group was originally established as a wood products manufacturer. We expanded into the plantation sector in 1997, building upon our relationships within local communities. Both business segments are growing, but the palm oil business is growing at a higher rate.
Palm oil accounted for 69% of total revenue in 2015, down from 72% in 2014, driven by lower CPO average selling prices. Our history of expansion has accelerated in recent years, with the acquisition of ten new oil palm estates since 2010, and two in the past year.
We also took a controlling interest in Tanjung Kreasi Parquet Industry, a manufacturer of globally branded engineered flooring in 2012.
These subsidiaries provide long-term opportunities for expansion in both of our core businesses.
DSN Group is a
growing, and green,
producer of palm oil
and wood products
sold into global
markets. DSN
plantation operations
are among the most
productive in the sector.
DSN Group FY 2015 Results Update
Mill Production: CPO, PK & PKO ('000 tons)
Revenue: CPO, PK & PKO (Rp trillions)
ASP: CPO, PK & PKO (Rp millions)
Mill Efficiency & Effectiveness: OER & FFA (%)
189
0.09 0.12 0.040.07 0.050.21 0.040.20
2011 2012 2013 2014 2015 Planted Area: Total, Nucleus & Plasma ('000 ha)
Mature Area: Total, Nucleus & Plasma ('000 ha)
FFB Harvested: Total, Nucleus & Plasma (million tons)
Yield per Hectare: FFB, CPO & PK - Nucleus only (tons)
56 61
Land Area ('000 Ha) Avg Age (Yrs) Yield
Estate Province Mature Planted Total Avail. HGU PB IL Mature Area*
Our estates are clustered across East, West and Central Our estates are clustered across East, West and Central Kalimantan, with acquisitions AAN & MNS in the West
Nucleus (‘000 ha)
DSN acquired 2 18,000 ha estates in 2015. AAN is partially planted while MNS is greenfield. At year end, we had 69,291 ha nucleus and 51,783 ha of mature estates with an average ages of 7.5 and 9.5 years respectively. Our FFB yield was 26.2 tons/ha. Our land bank now totals just over 94,000ha after 3 estates were dropped – DBL, MAL and RUT. In addition to expiring Ijin Lokasi, these estates were unlikely to allow for development in light of recent changes in industry policy.
PSA 2010 W. Kal. - 1.2 10.6 9.4
DPS 2010 W. Kal. - 1.2 6.1 4.9
MNS 2015 W. Kal. - - 18.0 18.0
PWP 2004 C. Kal. 7.6 8.7 15.2 6.4
Total 51.8 69.3 163.6 94.3 35% 12% 53% P
M
Our plasma area spans 20,920 ha at the end of 2015, or 30% of our planted area. DSN manages 17,914 ha under a BoT model, which results in higher yields and revenues for plasma holders, while DSN benefits from milling margins. DSN retains a 5% management fee from FFB revenues. The plasma holders claim 30% of the remainder, while 70% services bank loans, upkeep and maintenance of the estate prior to breaking even. Annual Estate Growth History
Acquiring AAN in Q2 provided nearly 1,900 ha of nucleus and 800 ha of plasma, of which 1,200 ha were mature.
Our commitment to plasma holders is a critical element in the success of DSN’s palm oil activities, often easing title conversion, and minimizing the prospect of social disturbances.
Cum. Area 8.8 8.8 11.9 15.2 19.9 23.5 31.1 35.1 41.2 45.0 49.4 52.1 57.9 62.8 69.3
Plasma % 0% 6% 7% 9% 14% 18% 22% 28% 30%
Our planting and age profile to date suggests an average 10% annual growth in FFB production through 2018
Based on area planted through 2015
Our planted areas will all mature by 2019. The yield expansion of the sizeable Young Mature areas should offset the decline in Old
Despite the adverse weather in 2015, nucleus yields Despite the adverse weather in 2015, nucleus yields remained at 26.2 t/ha, while plasma yields expanded
In 2015, DSN produced 1.35 million tons FFB from nucleus estates, with an additional 138 thousand tons from plasma. In aggregate, FFB output increased by 8.2% from 2014, with a nucleus yield of 26.2 tons per hectare and a plasma yield of 22.6 tons per hectare.
3rdparty purchases were
We are a member of the Roundtable on Sustainable Palm Oil (RSPO), and strive to comply with global RSPO and the 10% of our total planted area, for conservation purposes
Our most developed cluster er -- with 5 estates, 5 CPO Mills
Our most develo
- is nearly the size of Singapore
CPO mill capacity designed for peak production 71% of our planted area is
Stable FFB yields and a slightly lower OER generated 6.2 Stable FFB yields and a slightly lower OER generated 6.2 tons of CPO per hectare, with an FFA level of just 2.57%
CPO production expanded by 4.2% in 2015, with an Oil Extraction Rate (OER) of 23.6% for the year. Palm Kernel production rose by 13.6% to 60,598 tons, with most used by our Palm Kernel Oil mill which produced 20,489 tons of PKO.
Our CPO production quality improved during the year, with aggregate FFA levels of just 2.57%. The maximum monthly FFA level from our own production was just 2.88% Q4.
DSN’s productivity, at 6.2 tons of CPO per hectare in 2015, DSN s productivity, at 6.2 tons of CPO per hectare in 201 is consistently ahead of peers, whatever the age profile
Source: Company reporting and analyst research
With FFB yields remaining stable in 2015 at 26.2 tons per hectare, CPO yields dropped slightly to 6.2 tons per hectare, largely as a result of a 1% drop in the OER.
Expanding domestic refining capacity, coupled with our
ding domestic refining capacity, coupled with our nd
pan h
h-quality product, ensures robust demand for our CPO
Our customers are
2014 20110 10.84 52 214219
2013 9 - 7.11 - 67
-Revenue A SP
Costs were lower during the year, and the seasonality of Costs were lower during the year, and the seasonality o fertilizer application led to expanding margins in Q4
P
Cost of Sales (IDR b n) 2015 2014 2013 2012 2011
Fertilizer 337.2 324.7 288.7 326.7 193.7
Labor 479.5 401.0 336.0 274.3 166.1
Others 267.1 328.6 244.7 224.3 227.4
FFB Purchased 517.1 663.5 294.1 179.1 69.0
Milling 105.6 101.6 99.5 65.1 33.6
Total cash cost 1,706.5 1,819.3 1,263.0 1,069.5 689.7
C
Cost as a % of total
Fertilizer 19.8% 17.8% 22.9% 30.5% 28.1%
Labor 28.1% 22.0% 26.6% 25.6% 24.1%
Others 15.7% 18.1% 19.4% 21.0% 33.0%
FFB Purchased 30.3% 36.5% 23.3% 16.7% 10.0%
Milling 6.2% 5.6% 7.9% 6.1% 4.9%
Unit Cash Costs from Internal FFB Only
IDR/ton CPO 3.64 3.73 3.38 3.90 3.46 USD/ton CPO 272 314 323 416 394
U
Unit Cash Costs from Internal FFB, net of revenues for FFB, PK & PKO
IDR/ton CPO - net 3.00 3.00 3.04 3.45 2.97 USD/ton CPO - net 224 253 291 367 338
Avg IDR/USD Rate 13,360 11,878 10,451 9,380 8,779
Our total cash cost
We are the 4thlargest wood that all logs and sawn timber purchased for our operations are sourced from sustainable forest resources.
DSN is also a leading wood products manufacturer with reputable DSN is also a leading w
Wood P roduc ts Operating Summary
Q4-2015 Q3-2015 QoQ Δ% 2015 2014 YoY Δ% 2013
Sales Volume
Wood P roduc ts Financ ial Summary (I DR bn)
Q4-2015 Q3-2015 QoQ Δ% 2015 2014* YoY Δ% 2013
T
Total debt / equity 1.7x 1.7x 1.7x 1.5x 1.8x 1.9x
Net debt / equity 1.3x 1.5x 1.3x 1.0x 1.5x 1.6x
Net debt / EBITDA 3.2x 3.4x 3.2x 1.8x 2.8x 3.3x
* Restated
Full Year 2015 Financial Summary
Note: Annual Financial Statements are audited by Siddharta & Wijaja, Registered Public Accountants - a Member Firm of KPMG International.
** Consolidated adjusted profit excludes the impact of unrealized financing forex gains/losses
14-Jun-13 14-Dec-13 14-Jun-14 14-Dec-14 14-Jun-15 14-Dec-15
0 250 500 750 1,000
0.0 0.5 1.0 1.5 2.0 2.5 3.0
14-Jun-13 14-Dec-13 14-Jun-14 14-Dec-14 14-Jun-15 14-Dec-15 DSNG Daily Share Price (rp/share) & Trading Volume (shares)
DSNG Share Price vs. IDX & Agri Index
For additional information, please refer to our website at:
www.dsn.co.id
If you have additional questions or requests, you may contact us at:
investor.relations@dsngroup.co.id
IDX DSNG Agri
