Interim Performance Presentation 1H 2020: first half period ended 30 June 2020.

www.goldenagri.com.sg

GOLDEN AGRI-RESOURCES LTD Interim Performance Presentation Half year ended 30 June 2020

14 August 2020

Disclaimer

This presentation has been prepared by Golden Agri-Resources Ltd. ("GAR" or "Company") for informational purposes, and may contain projections and forward looking statements that reflect the Company's current views with respect to future events and financial performance. These views are based on current assumptions which are subject to various risks and which may change over time. No assurance can be given that future events will occur, that projections will be achieved, or that the Company's assumptions are correct. Actual results may differ materially from those projected. A prospective investor must make its own independent decision regarding investment in securities.

Opinions expressed herein reflect the judgement of the Company as of the date of this presentation and may be subject to change without notice if the Company becomes aware of any information, whether specific to the Company, its business, or in general, which may have a material impact on any such opinions.

The information is current only as of its date and shall not, under any circumstances, create any implication that the information contained therein is correct as of any time subsequent to the date thereof or that there has been no change in the financial condition or affairs of GAR since such date. This presentation may be updated from time to time and there is no undertaking by GAR to post any such amendments or supplements on this presentation.

The Company will not be responsible for any consequences resulting from the use of this presentation as well as the reliance upon any opinion or statement contained herein or for any omission.

© Golden Agri-Resources Ltd. All rights reserved.

2

Contents

1	Executive Summary	4
2	Financial Highlights	6
	3 Segmental Performance	9
4	Strategy and Outlook	13
5	Appendix	17

3

Executive Summary

Executive Summary

A gradual recovery from supply chain disruption results in better second quarter performance

EBITDA (US$ million)

150		132
100	97	100
		58
50
0

Plantation and palm oil		Palm, laurics and others
mills		1H19		1H20

1H 2020 vs 1H 2019
Revenue	US$3,391 mn	7%
EBITDA	US$189 mn	4%
Underlying loss1	US$11 mn	26%
Palm product output 1.22 mn MT	6%
CPO FOB price	US$616/MT	24%
2Q 2020 vs 1Q 2020
Revenue	US$1,734 mn	5%
EBITDA	US$105 mn	24%
Underlying profit1	US$14 mn	n.m
Palm product output 604,000 MT	2%
CPO FOB price	US$556/MT	17%

Note:

1. Net loss attributable to owners of the Company, excluding net effect of net gain/loss from changes in fair value of biological assets, depreciation of bearer plants, exceptional items, foreign exchange gain/loss, and deferred tax income/expense

5

Financial Highlights

Financial Performance

US$ million	1H 2020	1H 2019	YoY	2Q 2020	1Q 2020	QoQ
	Revenue	3,391	3,167	7%	1,734	1,657	5%
	Gross Profit	389	345	13%	190	198	-4%
	EBITDA1	189	198	-4%	105	84	24%
	Underlying Profit/(Loss)2	-11	-15	-26%	14	-25	n.m
	Net gain/(loss) from changes in	-4	-2	90%	5	-9	n.m
	fair value of biological assets3
	Depreciation of bearer plants3	-59	-47	25%	-31	-28	13%
	Foreign exchange gain/(loss)3	-45	3	n.m	-15	-30	-48%
	Deferred tax income/(expense)3	-31	3	n.m	-28	-4	688%
	Exceptional items3	-5	11	n.m	-5	-	n.m
	Net loss attributable to
	owners of the Company	-157	-46	238%	-61	-95	-36%

• Better second quarter results with gradual recovery from supply chain disruption
• Strong upstream business mitigated downstream business challenges
• First half 2020 performance affected by reinstatement of CPO export levy
• Higher net loss impacted by foreign exchange loss and deferred tax expense, which are mainly non cash

Notes:

1. 1H 2020 EBITDA includes net fair value loss on financial assets in accordance with IFRS 9 of US$14 million

2.Net loss attributable to owners of the Company, excluding net effect of net gain/loss from changes in fair value of biological assets, depreciation of bearer plants, exceptional items, foreign exchange gain/loss, and deferred tax income/expense

3. Net of tax and/or non-controlling interests
	7

Financial Position

US$ million	30-Jun-20	31-Dec-19 Change
Total Assets	8,482	8,779	-3%
Cash and short-term investments	832	784	6%
Fixed assets1	3,636	3,720	-2%
Total Liabilities	4,248	4,274	-1%
Net Debt2	1,608	1,573	2%
Interest bearing debt	3,157	3,144	0.4%
Cash, short-term investments and liquid working	1,549	1,571	-1%
capital3
Total Equity	4,234	4,505	-6%
Net Debt2/Total Equity	0.38x	0.35x
Net Debt2/Total Assets	0.19x	0.18x
Net Debt2/EBITDA4	2.34x	2.26x
EBITDA/Interest4	4.52x	4.23x

Notes:

1. Includes Property, Plant and Equipment, Bearer Plants, Right-of-use Assets and Investment Properties
2. Interest bearing debt less cash, short-term investments and liquid working capital

1. Liquid working capital is trade receivables, inventories (excluding consumables), deposits and advances to suppliers less trade payables and advances from customers
2. Calculated based on the last four quarters figures

8

Segmental Performance

Segmental Results

Plantations and Palm Oil Mills

Strong improvement in performance supported by the rebound in CPO market prices

		1H 2020	1H 2019	YoY
	Revenue (US$ million)	625	574	9%
	EBITDA (US$ million)	132	97	36%
	EBITDA margin	21%	17%	4%
	CPO FOB Price (US$/MT)	616	496	24%
	FFB Production ('000 tonnes)	4,084	4,455	-8%
	Nucleus	3,215	3,444	-7%
	Plasma	869	1,011	-14%
	FFB Yield (tonnes/ha)	8.8	9.4	-6%
	Palm Product Output ('000 tonnes)	1,219	1,293	-6%
	CPO	973	1,026	-5%
	PK	246	267	-8%
	Oil Extraction Rate	21.6%	21.3%	0.3%
	Kernel Extraction Rate	5.5%	5.6%	-0.1%
	Palm Product Yield (tonnes/ha)	2.4	2.5	-5%

Lower plantation output due to dry weather conditions last year and the replanting programme

Note:1H 2020 EBITDA includes allocated net fair value loss on financial assets (IFRS 9) of US$3 million

10

Oil Palm Plantations

Continued long-term productivity growth through replanting and technological innovation

Mature Area - ha		Planted Area - ha
461,764	458,557	499,563	497,587
101,592	101,757	104,581	104,751
360,172	356,800	394,982	392,836
30-Jun-20	31-Dec-19		30-Jun-20	31-Dec-19
			Nucleus		Plasma

• Immature and younger estates use newer- generation higher-yielding seeds for continued long-term production growth
• Accelerated replanting to around 9,900 ha in 1H 2020

Age Profile as of 30 Jun 2020

15%	8%
37,799	6%
73,744
32,279

144,274

	211,467
29%	42%

	Immature (0-3 years)		Young (4-6 years)
	Prime 1 (7-18 years)		Prime 2 (19-25 years)
	Old (>25 years)

Notes:

1. Total planted area including plasma
2. Average age of plantations, including plasma, is 17 years

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Segmental Results

Palm, Laurics and Others

Earnings were impacted by the COVID-19 outbreak with gradual improvement in the second quarter of 2020

	1H 2020	1H 2019	YoY
Revenue (US$ million)	3,382	3,151	7%
Sales Volume ('000 tonnes)	4,971	5,370	-7%
EBITDA (US$ million)	58	100	-42%
EBITDA margin	1.7%	3.2%	-1.5%

• Sales volume affected by logistics issues following COVID-19 lockdown with gradual improvement in the second quarter 2020
• This also resulted in a sudden significant CPO price decline in February, further impacting our earnings
• Indonesia biodiesel is still the major catalyst to the industry with realisation of B30 programme

Notes:

1. This segment refers to processing and merchandising of palm and oilseed based products i.e. bulk, branded, oleo-chemicals and other vegetable oils, as well as production and distribution of other consumer products mainly food and beverages
2. 1H 2020 EBITDA includes allocated net fair value loss on financial assets in accordance with IFRS 9 of US$11 million

12

Strategy and Outlook

Growth Strategy and Outlook

GAR aims to be at the forefront of the evolving technological trend by intensifying strategic efforts to transform its business and build new competitive edge

Accelerated replanting with		Expanding biodiesel
latest-generation planting		facilities to support
materials to transform		Indonesian policy on
yield curve	Plantations	Palm,	biofuel mandate
Embracing innovative	and Palm	Laurics	Focusing on higher
Oil Mills	and Others
ways of working to			value derivative
achieve a higher level			products, increasing
of efficiency and		presence and expertise in
productivity		global destination markets

• GAR remains confident in the robust long-term supply and demand fundamentals for palm oil supported by its high versatility (including biodiesel) and lowest cost of production
• The impact from the COVID-19 pandemic is expected to be short term depending on the severity and length of the outbreak

14

Indonesia Biodiesel

Indonesia growing biodiesel mixture mandate is a major catalyst to the industry

Feedstock Use for Biodiesel in 2020F

•	Global feedstock for biodiesel is estimated to
	decrease by an estimated 3% in 2020 to
	42.9 million MT from 45.7 million in 2019
•	However, palm oil usage for feedstock
	continues to expand with a market share of

Others

22% Soya oil

25%

Rapeseed

almost 40% in 2020 from 31% in 2016

Indonesia Biodiesel Consumption

in million kltr

oil

14%

Palm oil

39%

2.6

8.8

6.4

4.03.6

• Indonesian B30 mandate for 2020 was

allocated at 9.6mn kltr. However, the

realisation is expected to be at around 8.8mn

kltr due to lower consumption

• The increase of export levy to sustain

biodiesel subsidy shows the Indonesian

2017A

2018A

2019A

5M20A

2020F

Source: Oil World, Ministry of Energy and Mineral Resources, and Aprobi

government's commitment towards its

biodiesel mandate policy

15

Towards Responsible Palm Oil Production

Managing COVID-19

• Employee and community safety are top priority
• Complying with all government regulations wherever we operate
• Palm oil sector is strategic sector - all our facilities continue to operate
• Helping to protect employees and community e.g. mask- making project
• Supporting 40 Alternative Livelihood programmes to help boost and maintain community resilience

On track to achieve 100% TTP for palm supply chain at end 2020

• Full TTP for nearly 84% of palm supply chain
• 273 3rd-party mills reported full TTP
• COVID-19may affect timetable for TTP this year
• Engaging with suppliers remotely and encouraging self- assessment

Managing Fire and Haze

• Launched the Rumbun and Jungle Friends storybook to educate children about dangers of forest fires
• Part of long-term efforts to stem forest fires and haze
• No reduction in commitment despite COVID-19

16

Appendix

Age Profile

Immature and younger estates use newer-generationhigher-yielding planting materials that will further boost production growth in the future

		Immature	Young	Prime 1	Prime 2	Old	Total
	hectares	(0-3 years) (4-6 years) (7-18 years) (19-25 years) (>25 years)
	30 June 2020
	Nucleus		34,810	31,236	186,712	98,386	43,839	394,982
	Plasma		2,989	1,043	24,755	45,889	29,905	104,581
	Total Area		37,799	32,279	211,467	144,274	73,744	499,563
	% of total planted area	8%	6%	42%	29%	15%	100%
	31 December 2019
	Nucleus		36,036	29,130	181,134	108,266	38,270	392,836
	Plasma		2,994	2,059	24,527	54,005	21,166	104,751
	Total Area		39,030	31,189	205,661	162,271	59,436	498,587
	% of total planted area	8%	6%	41%	33%	12%	100%

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If you need further information, please contact:

Golden Agri-Resources Ltd c/o 108 Pasir Panjang Road #06-00 Golden Agri Plaza Singapore 118535

Tel: [phone]

Fax: [phone]

www.goldenagri.com.sg

Contact Person: Richard Fung [e-mail]

golden-agri-resources-ltd @GAR_Sinarmas @sinarmas_agri @GARSinarmasagri

Sinar Mas Agribusiness and Food