Transcript Slide 1

Investor Presentation
2Q &1H 2010
About PADICO Holding
Who We Are
•
PADICO HOLDING is a limited, public shareholding
company which was established in 1993, through an
initiative by distinguished Palestinian and other Arab
businessmen in Diaspora.
•
The Company's paid in capital is 250 million
shares/USD.
•
The Company’s core mission is to develop and
strengthen the Palestinian economy through investing
in vital economic sectors.
•
This mission is being fulfilled through a well
structured, focused and resourceful
group of
associates and affiliates operating in a wide array of
sectors including real estate, telecommunications,
tourism, industry and financial services
•
The Company has been listed on the Palestine
XCHANGE since 1997. PADICO HOLDING’s
shareholder profile is diverse and includes major
investors from Palestine as well as international
markets, exceeding 11,000 shareholders.
The PADICO Advantage
1.
The Board of Directors enjoys vast international experience in a broad range of sectors.
This makes the board composition strong with a balanced blend of skills and
experience, allowing it to offer all guidance required to achieve the Company’s goals.
2.
PADICO Holding has played a pioneer role in developing the Palestinian economy
through establishing a number of innovative projects including founding the first stock
exchange, establishing the first telecommunications company, building the first
industrial zone in the Gaza strip, and introducing 5 star hospitality services to Palestine
through founding the Intercontinental Jaser Palace in Bethlehem, and the Movenpick
hotels in Gaza and Ramallah.
3.
PADICO HOLDING has a 16 year track record of leading a consistently superior
financial performance despite regional political and economic instability. This makes
PADICO a true model for investment in Palestine.
4.
PADICO HOLDING has been listed on Palestine XCHANGE (PX) since 1997, which
guarantees high levels of transparency.
5.
The Company’s flexible and highly diversified investment strategy which focuses on
executing investments in various economic sectors as well as geographical locations, has
enabled the company to continuously generate profits.
Our Investment Strategy
Effective
CSR
Pioneer CSR strategy and Socially
Responsible Investments (SRI)
Risk Management
PADICO HOLDING manages risk
associated with the political and
economic environment through:
Sector diversification, with the
concentration being in defensive
sectors such as infrastructure, real
estate and telecommunications.
Separating the Company’s
financial portfolio from its main
operations, and assigning it to
Rawan International Investment
Co., a PADICO HOLDING
subsidiary.
PADICO HOLDING’s Investments by sector
Our Investment Outlook (1)
• FIRST: Concluding The Restructuring Process
The future plan focuses on concluding the restructuring
process which involves merging investments in the real
estate, tourism, manufacturing and financial sectors under
the umbrella of specialized companies, in addition to
divestiture of underperforming investments and others in
which PADICO HOLDING does not own a controlling
stake.
Real Estate & Tourism Sectors Restructuring Plan
Merging 16 subsidiaries operating in the real estate and tourism
sectors into a single Holding with a paid in capital of $ 200 Million.
PADICO HOLDING will own a controlling stake in the new holding.
Due diligence of the companies has already been conducted, and the
new Holding’s business plan is currently being finalized.
Manufacturing Sector Restructuring Plan
Consolidating 6 industrial companies under the umbrella of Palestine
Industrial Investment Company (PIIC).
PADICO HOLDING will own a controlling stake in the new
Holding.
The new Holding has already acquired most related companies in
PADICO HOLDING’s Portfolio.
The Holding is currently amid settling its internal restructuring and
creating an efficient marketing department.
Palestine XCHANGE (PX) Restructuring Plan
Transform the PX from a private shareholding company to a
public shareholding company.
Separate the Depositary, Clearance and Settlement Center from
trading activities.
PADICO HOLDING will reduce its holdings in the PX from
78% to around 51%,
The Palestinian Ministry of National Economy has approved
the transformation, and PADICO HOLDING is currently in the
process of marketing its stake to strategic investors.
Our Investment Outlook (2)
SECOND: Reducing Borrowings and Costs
Decreasing Bank Loans
Decreasing Costs
Future plan stresses the need to
gradually reduce PADICO
HOLDING’s borrowings so as not
to exceed 25% of owners’ equity,
in comparison with the current rate
of 34%.
Future plan calls for reducing
general, administrative and
operational costs which in turn
increases liquidity and allows
for a consistent dividend policy.
A Highlight Of Our Key Investments
Capital*
185.65
Capital
68.51
Capital
16.9
Capital
26.13
% **
31.7
%
70.9
%
62.7
%
42
Capital
26.45
Capital
10.00
Capital
26.5
%
60.1
%
78.0
%
55.3
*Authorized capital in USD millions
** % owned by PADICO
***Holding as of 30-6-2010
PADICO HOLDING’s
Financial Statements
Consolidated Income Statement Summary
(Three months ended June 30)
Amount USD thousand
2Q
2009
2Q
2010
Change
%
Operating Revenue
7,208
14,986
108%
Share of Associates’
results of Operations
9,961
8,510
(15)%
Gain From Financial
Assets Portfolio
975
799
(18)%
Gain From Business
Combination of
Subsidiaries
-
-
-
Other Revenue
353
2,135
505%
Total Revenues
18,497
26,430
43%
Operating Expenses
4,894
10,573
116%
General & Admin.
Expenses
4,789
4,295
(10)%
Finance cost
1,691
1,583
(6)%
Total Expenses
11,374
16,451
45%
Net Profit
6,946
9,731
40%
• When compared to 2Q2009, 2Q
2010 has witnessed:
- 108% increase in operating
revenue.
- 43% growth in total revenues.
- (10)% decrease in general &
administrative expenses.
- 40% increase in net profit.
Consolidated Income Statement Summary
(Six months ended June 30)
Amount USD thousand
1H 2009
1H 2010
Change %
Operating Revenue
13,293
25,152
89%
Share of Associates’ results of
Operations
18,266
18,715
2.5%
Gain From Financial Assets
Portfolio
636
1,806
184%
Gain From Business
Combination of Subsidiaries
6,145
-
(100)%
Other Revenue
1,924
1,219
(37)%
Total Revenues
40,264
48,640
21%
Operating Expenses
8,573
15,910
86%
General & Admin. Expenses
8,392
8,643
3%
Finance cost
3,292
3,199
(3)%
Total Expenses
20,257
27,752
37%
Net Profit
19,797
20,388
3%
When compared to 1H 2009, 1H
2010 has witnessed:
• 89% growth in operational
revenue
accredited
to the
restructuring plan currently being
implemented, and the enhanced
operational
efficiency
at
subsidiaries’ level.
• 21% growth in total revenues.
• 49% growth in operating income
after excluding nonrecurring
items.
• 3% growth in net profit.
Revenue Sources
Revenue Sources/ USD Million
2009
%
1H
2010
Operating Revenue
13.29
33%
25.15
52%
11.86
89%
Share of Associates’ Results of
Operations
18.27
45%
18.72
38%
0.45
2%
Gain From Financial Assets
Portfolio
0.64
2%
1.81
4%
1.17
184%
Gain From Business Combination
of Subsidiaries
6.15
15%
-
0%
(6.15)
(100)%
-
0%
1.75
4%
1.75
100%
Other Revenue
1.92
5%
1.22
3%
(0.71)
(37)%
Total Revenue
40.26
100%
48.64
100%
8.38
21%
Gain From Sale Investment in
Properties
%
Change
%
Consolidated Balance Sheet Summary
2009
1H 2010
Chang
e%
Cash & Financial
Investments
95,425
90,847
(5)%
Investment in Associates
308,120
315,644
2%
Investment in Properties
69,431
63,457
(9)%
Other Assets
147,221
161,362
10%
Total assets
620,197
631,310
2%
Total Assets
Amounts in $ thousand
Amount / USD thousand
700,000
600,000
500,000
620,197
631,310
2009
1H 2010
530,028
455,699
400,000
300,000
200,000
100,000
0
2007
2008
Time Period
Loans & Credit
Facilities
165,803
153,288
(6)%
Other liabilities
24,689
25,785
4%
Total liabilities
190,492
179,073
(6)%
Total equity
429,705
452,237
5%
Outstanding shares
250,000
250,000
-
Total liabilities decreased by 6% due to a
decline in loans & credit facilities from
$165.8 million in 2009 to $153.29
million in 1H 2010, accredited to the
Company’s strategy of reducing
borrowings and debt obligations.
Key Subsidiaries and Affiliates
Paltel Group
• Established in 1995 as the first
Palestinian telecommunication
company. The Group’s services
cover all aspects of the
communication spectrum.
• Number of subscribers has
increased by 27% in 1H 2010
when compared to 1H 2009 to
reach 2.58 million.
• Growth in operating income
amounted to 12% when
comparing 1H 2010 to 1H
2009.
1H
2009
1H
2010
Change
Revenues
151,210
164,122
9%
Gross Profit
116,126
124,366
7%
Operating Income
49,638
55,453
12%
Net Income
47,146
40,836
(13)%
2009
1H
2010
Change
%
Total Assets
531,270
524,413
(1)%
Total Liabilities
180,085
178,229
(1)%
Total Equity
351,185
346,184
(1)%
Income Statement
(Amounts in JOD
thousand)
Balance Sheet
(Amounts in JOD
thousand)
%
Palestine Real Estate investment Company (PRICO)
•
•
•
PRICO is considered PADICO HOLDING’s arm
in the real estate and construction sector.
When compared to 1H 2009, 1H 2010 has
witnessed:
- 546% increase in operating revenues.
- 547% increase in gross profit.
- 322% increase in net income.
PRICO’s new projects include:
- Rabiyet Al Quds residential complex- Beit Safafa/
Total cost $34 million.
- Al Ghadeer Residential Complex- Jifna/ Total cost
$24 million.
- Prico House Two commercial center- Ramallah/
Total cost $12 million.
Income Statement
(Amounts in JOD
thousand)
1H
2009
1H
2010
Change
Operating Revenues
1,487
9,871
564%
Gross Profit
466
3,014
547%
Net Income
(1,141)
2,531
322%
Change
2009
1H
2010
Total Assets
81,079
87,127
7%
Total Liabilities
18,121
21,732
20%
Total Equity
62,959
65,395
4%
Balance Sheet
(Amounts in JOD
thousand)
%
%
Palestine XCHANGE (PX)
• PX represents one of PADICO
HOLDING’s avant-garde
accomplishments in the financial
sector.
• The XCHANGE currently has 41
listed companies, and an
additional 9 companies are
scheduled to go public during
2010.
• PX’s total market cap as of
30-6-10 amounted to $2.5 billion.
• Applicable regulations at the PX
are compatible with best
international practice.
Income Statement
(Amounts in USD
Thousand)
1H
2009
1H
2010
Change
%
Operating Revenues
1,674
1,519
(9)%
Operational Income
386
113
(71)%
Net Income
551
140
(75)%
2009
1H
2010
Change
%
12,494
12,889
3%
822
947
15%
11,672
11,943
2%
Balance Sheet
(Amounts in USD
thousand)
Total Assets
Total Liabilities
Total Equity
Palestine Industrial Investment Company (PIIC)
• PIIC was established in 1994 as a
holding company.
• As part of PADICO HOLDING’s
restructuring process, 6 industrial
companies are currently being
consolidated under the umbrella
of PIIC.
• When comparing 1H 2010 to 1H
2009:
- Sales grew by 42%.
- Gross profit advanced by 132%.
- Net income increased by 127%.
Income
Statement
(Amounts in JOD
Thousand)
1H
2009
1H
2010
Change
%
Sales
6,285
8,924
42%
Gross Profit
1,286
2,982
132%
Net Income
899
2,045
127%
2009
1H
2010
Change
%
Total Assets
34,920
37,612
8%
Total Liabilities
8,414
8,826
5%
Total Equity
26,506
28,786
9%
Balance Sheet
(Amounts in JOD
thousand)
Palestine Poultry Company (PPC)
• When comparing 1H 2010 to 1H
2009:
- Comprehensive net income
advanced by 259%.
- Operating profit increased by 146%.
Income Statement
(Amounts in JOD
Thousand)
1H
2009
1H
2010
Change
%
Revenues
5,652
8,270
46%
Gross Profit
1,319
2,999
127%
• PPC’s stock has witnessed a
significant performance with the
share price increasing by 128.68% in
1H 2010 closing at 2.95 JOD as of
30-6-2010.
Operating Profit
979
2,412
146%
Net Income
(comprehensive)
470
1,690
259%
2009
1H
2010
%
Total Assets
23,237
25,327
9%
Total Liabilities
7,561
8,561
13%
Total Equity
15,676
16,766
7%
• PPC’s future plans focus on
completing
the
Company’s
production cycle through establishing
a slaughter house, which will start
operations in 3Q 2010.
Balance Sheet
(Amounts in JOD
thousand)
PADICO HOLDING’s Stock
Stock Chart
(www.reuters.com)
Stock Performance
• As of 30-6-10, PADICO HOLDING and its
subsidiaries and affiliates contributed
66.42% of PX’s total trading volume,
75.83% of PX’s total trading value, and
66% of total market cap.
• PADICO HOLDING’s share alone
constituted 26.19% of PX’s total trading
volume, which is a strong implication of the
stock’s high liquidity and demand levels!
• PADICO HOLDING’s share price has
witnessed an increase during the first half of
2010 where it opened at 1.21$ on 1/1/10
and closed up by 14.88% at 1.39$ as of 306-2010.
2008
2009
1Q
2010
1H
2010
Closing
Share Price
(USD)
1.21
1.19
1.31
1.39
BV/ Share
(USD)
1.38
1.45
1.5
1.53
EPS (USD)
0.09
0.17
0.04
0.075
P/E (x)
13.44
7
8.18
9.27
P/BV (x)
0.87
0.82
0.87
0.91
Market
Capitalization
(USD Million)
303
298
328
347.5
Future Projects 2010-2013
Future Projects
• PADICO HOLDING’s future strategy focuses investments
in the infrastructure and real estate sectors.
• The 3 year future strategy allocates a budget of
$ 100 Million: 30% for long term projects, and 70% for
short and medium term projects.
A. Power Generation Project
• In partnership with local and regional
investors, PADICO HOLDING will
establish the first power generation plant
located in Jenin, northern West Bank.
• The plant will operate at total capacity of
400 MW, in two phases.
• Total investment cost amounts to $ 300
Million.
• The plant is expected to start operations by
late 2014.
B. Solid Waste Recycling Project
• PADICO HOLDING has established
The Palestinian Recycling Company
“TADWEER”, the first company to
offer specialized recycling services in
Palestine.
• The new Company’s pilot projects
involves Building, managing, and
operating a recycling and composting
facility in Nablus and Jenin.
• The projects’ total cost amounts to $ 5
Million, and operations will start in
September 2010.
C. Wastewater Treatment Project
• PADICO HOLDING is the first private
company to invest in wastewater in
Palestine.
• An MOU has been signed with Jenin
Municipality to upgrade the existing
wastewater treatment plant, and build a
tertiary treatment unit which will
produce water suitable for irrigation
purposes.
• The project’s estimated cost is around
$ 2 Million, and will start operations in
the beginning of 2011.
Contact Information
PADICO HOLDING
Ramallah – Palestine
Tel: + 970 2 240 3336
Fax: + 970 2 240 3363
P.O.Box: 1708 Ramallah – Palestine
Email: [email protected]