FIRST QUARTER REPORT
2024
DIRECTORS' REPORT
CONTENTS
Overview | Financial Section | ||
About UIE | Consolidated Company Financial Statements | ||
UIE in brief | 3 | Consolidated Financial Statements | 25 |
UIE Financial Highlights | 4 | Notes to the Consolidated Financial Statements | 30 |
Directors' Report | Other | ||
Business Reporting Highlights - Q1 2024 | 5 | Statement by the Board of Directors | |
and the Management | 34 | ||
Financial Review - Business Reporting | 6 | Abbreviations & Definitions | 35 |
Portfolio Companies | |||
UP | 12 | ||
Schörling | 17 | ||
Greenbridge | 20 | ||
Outlook for UIE | 21 | ||
Consolidated Key Figures | 23 |
Statement by the Chairman
Outlook
FIRST QUARTER REPORT 2024 UIE PLC | 2 |
UIE IN BRIEF
UIE is a holding company investing in the agro-industry as well as industrial and technology sectors.
UIE exercises long-term and active ownership through direct board or Investment Committee representation as well as close collaboration with the respective management of our portfolio companies.
We are committed to investing in companies that value sustainability as one of their key guiding principles, thereby exerting a positive impact on society and the environment at large.
We invest in the agro-industrial sector and in other industries where we can use our experience and network to obtain synergies and long-term growth. By investing in a portfolio of entities with a long-term perspective, we believe the most value is created for our shareholders.
UIE was founded in 1982 and is listed on Nasdaq Copenhagen.
Our investment portfolio currently consists of:
- United Plantations Berhad ("UP") - a leading plantation company with agricultural investments in Malaysia and Indonesia where it is involved in the certified sustainable cultivation of oil palms and coconuts and processing of high quality palm oil into value-added palm fractions for the speciality fats and chocolate industry
- Schörling AB ("Schörling") - an active investment company working for long-term industrial development with ownership in six companies of which five are publicly listed
- Greenbridge Sàrl ("Greenbridge") - an active investment company focusing on technology businesses with ownership in four companies
DIRECTORS' REPORT
UIE
Ownership
UP | Schörling | Greenbridge |
48.4% 1.8%9.7%
AGRO INDUSTRY | INDUSTRIAL / TECHNOLOGY SECTORS |
FIRST QUARTER REPORT 2024 UIE PLC | 3 |
DIRECTORS' REPORT
UIE FINANCIAL HIGHLIGHTS
- BUSINESS REPORTING1
MARKET VALUE OF
UIE'S ASSETS
Q1 2024
NET PROFIT
Q1 2024
28.4
USD million
VS. PROFIT OF USD 32.4 MILLION
IN Q1 2023
KEY FIGURES
NET ASSET VALUE PER SHARE ON 31/3 20242
297.5
DKK
25% ON YEAR-END 2023
SHARE PRICE
ON 31/3 2024
218.0
DKK
16% ON YEAR-END 2023
(Q4 2023)
UP - 73% (68%) | Greenbridge - 5% (4%) | ||
Schörling - 16% (20%) | Cash & Other | ||
Net Assets - 6% (8%) |
PERFORMANCE HIGHLIGHTS
NET PROFIT/(LOSS)
Q1
USD million
40 | ||||
20 | ||||
0 | ||||
-20 | ||||
-40 | ||||
2020 | 2021 | 2022 | 2023 | 2024 |
SHAREHOLDERS'
EQUITY
USD million
800 | ||||
600 | ||||
400 | ||||
200 | ||||
0 | 2021 | 2022 | 2023 | Q1 2024 |
2020 |
MARKET VALUE OF
UIE'S ASSETS ON 31/3 2024
USD million | ||
1,400 | 86 | Holding |
1,050 | 286 | discount |
27% | ||
700 | 1,017 | |
350 | 1,018 | |
0 | Market value of UIE's assets | UIE's market value |
UP Schörling/Greenbridge Net Cash & Other Net Assets
- See page 30 for further explanation of Business Reporting and Accounting Policies.
- Calculated as total market value of UIE's underlying net assets divided with number of outstanding shares at end of the period.
FIRST QUARTER REPORT 2024 UIE PLC | 4 |
DIRECTORS' REPORT
BUSINESS REPORTING HIGHLIGHTS - Q1 2024
UP
UP reported a net profit of MYR 133.5 million, reflecting an increase of 19% compared to the first quarter of 2023 due to higher sales prices and increased production of CPO. However, when measured in USD, the increase was only 12% due to a weaker MYR.
The share of UP's net profit was USD 13.6 million in the first three months of 2024, which was USD 1.5 million higher than the USD 12.1 million reported in the first quarter of 2023.
NET PROFIT - Q1 2024
133.5 19%
MYR million
VS. MYR 112.5 million in Q1 2023
SCHÖRLING
The fair value of UIE's investment in Schörling was SEK 2,400 million, representing an increase of 6% (or a gain of SEK 136 million) in the first quarter of 2024 compared to an increase of 9% (or a gain of SEK 172 million) in the first quarter of 2023.
When measured in USD, the fair value of UIE's investment in Schörling amounted to USD 225.6 million at the end of March 2024 - a marginal increase of USD 0.1 million since year-end 2023.
FAIR VALUE OF UIE'S INVESTMENT - 31/3 2024
225.6 0%
USD million
VS. USD 225.5 million at year-end 2023
GREENBRIDGE
The fair value of UIE's investment in Greenbridge amounted to USD 60.8 million at the end of March 2024. This corresponds to an increase of USD 12.3 million, or 25%, since year-end 2023.
The increase in fair value is due to UIE investing an additional USD 5.2 million as well as a fair value adjustment of USD 7.1 million, as the valuation parameters were affected positively by the general equity markets as well as a continued growth within the portfolio companies.
FAIR VALUE OF UIE'S INVESTMENT - 31/3 2024
60.8 25%
USD million
VS. USD 48.6 million at year-end 2023
Despite navigating in a global landscape marked by higher interest rates and amidst escalating geopolitical tensions, UIE achieved a satisfactory net result for the first three months of 2024. This result was primarily driven by an improved CPO production and higher average selling prices for CPO and PK, as well as lower production costs in UP.
In spite of the geopolitical tensions, the Board remains confident with the performance of its investments in UP, Schörling and Greenbridge. Indeed, our optimism is anchored in their agile mindset, strong focus on innovation and established positions as business leaders in their respective fields.
- Carl Bek-Nielsen, Chairman
FIRST QUARTER REPORT 2024 UIE PLC | 5 |
DIRECTORS' REPORT
FINANCIAL REVIEW
- BUSINESS REPORTING
UIE achieved a net result of USD 28.4 million in the first quarter of 2024, driven by a highly satisfactory operational performance from UP, as well as a fair value increase of the investment in Greenbridge.
Business Reporting Versus Consolidated Figures In the reporting on the following pages, we do not comment on the consolidated figures but on the figures in the Business Reporting.
Business Performance Review
As illustrated in the graph below, UIE's operating income amounted to USD 29.2 million in the first three months of 2024, a decrease of USD 2.9 million from the USD 32.1 million reported in the first quarter of 2023.
TOTAL OPERATING INCOME IN UIE
USD million
UP made another solid contribution of USD 13.6 million, which is 12% higher than the USD 12.1 million contributed in the corresponding period of 2023.
The contributions from the fair value measured investments in Schörling and Greenbridge, however, are inherently more volatile. In the first quarter of 2024, the fair value adjustment of UIE's investments in Schörling was USD 0.1 million compared to a gain of USD 17.6 million in the first quarter of 2023.
According to International Financial Reporting Standards as adopted by the EU ("IFRS"), UIE is deemed to have de facto control of UP even though UIE holds less than 50% of UP's voting rights. Hence, UP's result is fully consolidated in UIE's consolidated financial statements. However, as UIE is a non- operating holding company, the Board is of the view that the most appropriate measurement of the performance of the investment in UP is to equity account (measuring UIE's share of UP's net profit in a single line item in UIE's operating profit).
Wholly-owned subsidiaries are fully consolidated, whereas other investments (primarily Schörling and
The fair value adjustment of Greenbridge was USD 7.1 | ||||||||||||||||
UP1 | 13.6 | |||||||||||||||
million compared to USD 0.2 million in the first quarter of | ||||||||||||||||
12.1 | ||||||||||||||||
Schörling2 | 0.1 | 2023. | ||||||||||||||
17.6 | ||||||||||||||||
Additionally, Other income for the quarter included a gain of | ||||||||||||||||
Green- | 7.1 | |||||||||||||||
bridge2 | 0.2 | USD 8.3 million, of which USD 6.2 million was a one-off, | ||||||||||||||
non-cash flow item stemming from the reversal of a | ||||||||||||||||
Other | 8.3 | |||||||||||||||
provision related to unclaimed proceeds for UIE shares that | ||||||||||||||||
- | were taken over by the company in 2021, as further detailed | |||||||||||||||
5 | 0 | 5 | 10 | 15 | 20 | |||||||||||
on page 9. | ||||||||||||||||
Q1 2024 | Q1 2023 | 1) Share of net profit | ||||||||||||||
2) Change in fair value |
Greenbridge) are measured at fair value. Accordingly, this measurement is used in the Business Reporting as well as consolidated figures. The net profit reported under Business Reporting is basically identical to the net profit attributable to owners of the Company reported in the consolidated financial statements.
For further information on the difference between the Business Reporting in the Directors' Report and the consolidated financial statements, refer to note 1 on page 30.
FIRST QUARTER REPORT 2024 UIE PLC | 6 |
DIRECTORS' REPORT
In the first quarter of 2024, UIE achieved a net profit of USD
- million, which is USD 4.0 million lower than the USD
- million reported for the corresponding period in 2023.
INCOME STATEMENT - BUSINESS REPORTING | |||||||||||||||||||||
USD '000 | Q1 2023 | Q2 2023 | Q3 2023 | Q4 2023 | FY 2023 | Q1 2024 | |||||||||||||||
UP, share of net profit | 12,140 | 16,954 | 24,350 | 20,856 | 74,300 | 13,630 | |||||||||||||||
Schörling, change in fair value | 17,618 | 6,688 | (42,031) | 53,394 | 35,669 | 98 | |||||||||||||||
Dividend income, Schörling | - | - | 821 | - | 821 | - | |||||||||||||||
Greenbridge, change in fair value | 181 | 3,439 | (219) | 1,854 | 5,255 | 7,117 | |||||||||||||||
Other | 2,121 | 1,083 | (801) | 3,033 | 5,436 | 8,340 | |||||||||||||||
Total operating income/(loss) | 32,060 | 28,164 | (17,880) | 79,137 | 121,481 | 29,185 | |||||||||||||||
Administrative expenses | (721) | (594) | (555) | (1,005) | (2,875) | (714) | |||||||||||||||
Net interest income/(expense) | 557 | 506 | 877 | 331 | 2,271 | 480 | |||||||||||||||
Foreign exchange gain/(loss) | 547 | 83 | (852) | 1,475 | 1,253 | (490) | |||||||||||||||
Profit/(loss) before tax | 32,443 | 28,159 | (18,410) | 79,938 | 122,130 | 28,461 | |||||||||||||||
Income tax | (56) | (42) | (29) | (1,370) | (1,497) | (56) | |||||||||||||||
Profit/(loss) after tax | 32,387 | 28,117 | (18,439) | 78,568 | 120,633 | 28,405 | |||||||||||||||
NET PROFIT Q1 2024 | |||||||||||||||||||||
USD million | |||||||||||||||||||||
30 | 8.3 | 28.4 | |||||||||||||||||||
7.1 | |||||||||||||||||||||
20 | |||||||||||||||||||||
(0.7) | |||||||||||||||||||||
13.6 | 0.1 | ||||||||||||||||||||
10 | |||||||||||||||||||||
0 | |||||||||||||||||||||
Share of | Fair value change | Fair value change | Administrative | Other items (net) | Net profit | ||||||||||||||||
net profit in UP | Schörling | Greenbridge | expenses |
FIRST QUARTER REPORT 2024 UIE PLC | 7 |
DIRECTORS' REPORT
UP
Increased CPO production, higher average selling prices of CPO and PK and significantly lower production costs contributed to a satisfactory operating income from UP's plantation division of MYR 154.3 million, marking a 49% increase relative to the corresponding period of 2023.
The refinery division reported an operating profit of MYR
16.4 million, notably lower than the MYR 39.3 million in the first quarter of 2023. Besides lower refining margins in lauric products in the current quarter, the lower refinery contribu- tion was due to the timing of hedging losses realised in the current period as opposed to hedging gains achieved in the corresponding quarter in 2023. Over time, these hedging gains and losses even out as and when the underlying for- ward sales contracts, to which they relate, are concluded.
UP's net profit amounted to MYR 133.5 million, which was 19% higher than in the first quarter of 2023. Converted to USD, UIE's functional currency, UP's net profit amounted to USD 28.3 million, reflecting an increase of 12%, due to a weaker average exchange rate of the MYR against the USD in the first quarter of 2024 compared to the corresponding period in 2023.
UIE's share of UP's result (excluding minorities) amounted to USD 13.6 million in the first quarter of 2024, marking an increase of USD 1.5 million compared to USD 12.1 million reported in the first quarter of 2023.
UP's results are reported in the section "UP" on pages 12-16.
For further information about UP, download UP's First Quarter Report 2024 or visit www.unitedplantations.com.
Download UP's First Quarter Report 2024
Schörling
UIE's investment in Schörling is accounted for at fair value, with movements being recognised in the Income Statement.
During the first quarter, equity markets experienced positive momentum, reflecting optimism about a soft economic landing despite diminished expectations that the Federal
Reserve would cut rates in 2024. The broader indexes ended the quarter with solid gains.
In the first quarter of 2024, the individual share price development of Schörling's listed portfolio companies all increased, ranging from a 5% increase (Hexagon) to a 13% increase (AAK). Hexagon is the largest single investment, accounting for 55% of the Schörling investment portfolio (at the end of March 2024).
At the end of March 2024, the value of UIE's investment in Schörling was SEK 2,400 million, representing an increase of 6% (or a gain of SEK 136 million) in the first quarter of 2024 compared to an increase of 9% (or a gain of SEK 172 million) in the first quarter of 2023.
Measured in USD, UIE's functional currency, the value of UIE's investment in Schörling was adversely affected by the SEK weakening by 6% against the USD in the first quarter of 2024, offsetting the share price increases. As a result, the value of the investment, measured in USD, showed only a marginal increase of USD 0.1 million. The graph below highlights the significant impact of currency fluctuations.
SCHÖRLING FAIR VALUE ADJUSTMENT
USD million
30 | ||||||
20 | 16.5 | 1.1 | 17.6 | |||
13.5 | ||||||
10 | ||||||
0 | 0.1 | |||||
(13.4) | ||||||
-10 Share Currency Fair | Share | Currency | Fair | |||
price | value | price | value | |||
Q1 2023 | change | Q1 2024 | change | |||
For further information, refer to "Schörling" on pages 17-19 or visit Schörling's website www.schorlingab.se.
Greenbridge
UIE's investment in Greenbridge is accounted for at fair value, with movements being recognised in the Income Statement.
In the first quarter of 2024, the fair value adjustment of UIE's investment in Greenbridge increased by USD 7.1 million, compared to an increase of USD 0.2 million in the first quarter of 2023.
The fair value adjustment is due to valuation parameters affected positively by the general equity markets as well as continued growth within the portfolio companies.
In March 2024, UIE invested an additional SEK 53 million (USD 5.2 million) in Greenbridge through a rights issue. Greenbridge raised a total of SEK 500 million in the rights issue, which was oversubscribed by existing shareholders.
UIE's total investment in Greenbridge reached USD 44.3 million at the end of the first quarter of 2024.
On 31 March 2024, the fair value of UIE's interest in Greenbridge was USD 60.8 million.
Subsequent to the balance sheet date, Greenbridge invested in a new portfolio company, EpinovaTech, which specialises in developing advanced semiconductor technology, NovaGaN®. This technology is noted for offering the highest power density at the lowest weight and cost, significantly outperforming traditional silicon-based technologies.
The investment was made via direct investment in the company and via acquisition of shares from existing EpinovaTech shareholders, resulting in Greenbridge becoming the largest shareholder in EpinovaTech. The completion of the transaction is subject to regulatory approvals and is expected to be finalised during the second quarter of 2024.
For further information, refer to "Greenbridge" on page 20 or visit Greenbridge's website www.greenbridge.lu.
FIRST QUARTER REPORT 2024 UIE PLC | 8 |
VALUE OF UIE'S INVESTMENTS | Equity | ||||||||||
accounted | Fair value accounted | ||||||||||
USD '000 | UP | Schörling Greenbridge | Total | ||||||||
Balance on 1 January 2024 | 335,621 | 225,516 | 48,567 | 609,704 | |||||||
Change in fair value | - | 98 | 7,117 | 7,215 | |||||||
Investments during the period | - | - | 5,155 | 5,155 | |||||||
UIE share of results | 13,630 | - | - | 13,630 | |||||||
Dividends received | - | - | - | - | |||||||
Foreign currency translation adjusted in equity | (10,406) | - | - | (10,406) | |||||||
UIE share of other equity movements | (1,576) | - | - | (1,576) | |||||||
Total balance on 31 March 2024 | 337,269 | 225,614 | 60,839 | 623,722 | |||||||
DEVELOPMENT IN CASH AND LIQUID ASSETS IN Q1 2024
USD million
125 | |||||||||||||||||||||||
91.9 | |||||||||||||||||||||||
100 | 0.6 | 2.2 | 87.6 | ||||||||||||||||||||
75 | (1.5) | (5.2) | (0.4) | ||||||||||||||||||||
50 | |||||||||||||||||||||||
25 | |||||||||||||||||||||||
0 | |||||||||||||||||||||||
Cash and | Net cash | Investment | Interest | Fair value | Other (net) | Cash and | |||||||||||||||||
liquid assets | used | in Greenbridge | received | change of | liquid assets | ||||||||||||||||||
1 January 2024 | in operations | liquid assets | 31 March 2024 | ||||||||||||||||||||
Cash | Liquid assets | ||||||||||||||||||||||
DIRECTORS' REPORT
Other income includes USD 6.2 million from reversing a provision established in January 2021. This reversal relates to UIE acquiring 23,132 of its shares as treasury shares, which corresponds to 231,320 shares post the share split in 2022.
The provision's reversal in the first quarter of 2024 followed the expiration of a three-year notice period in January 2024, during which no claims were made on the proceeds by the original certificate holders. This reversal, a non-recurring item, does not impact UIE's cash flow.
General and administrative expenses totalled USD 0.7 million, the same level as in the first quarter of 2023.
Interest Income
Interest from UIE's bank deposits amounted to a net income of USD 0.5 million in the first quarter of 2024, slightly lower than the USD 0.6 million in interest income in the first quarter of 2023.
Development in cash and liquid assets
Total net cash reserves and liquid assets in UIE decreased from USD 91.9 million (hereof liquid assets; USD 43.0 million) on 31 December 2023 to USD 87.6 million (hereof liquid assets; USD 45.3 million) on 31 March 2024, corresponding to a decrease of USD 4.3 million, mainly related to the investment in Greenbridge.
Financial Position
Shareholders' equity in the UIE segment increased by USD
Value of UIE's investments
The value of UIE's investments in UP, Schörling and Greenbridge is shown in the table above. The total value of the investments on 31 March 2024 amounted to USD 623.7 million, corresponding to an increase of USD 14.0 million since 31 December 2023. The positive result from UP and the fair value adjustment of Greenbridge was partly offset by valuation adjustments through equity of the investment in UP, mainly the foreign currency translation of UP.
Other Income and Administration Costs
At the end of March 2024, USD 45.3 million, representing roughly 52% of UIE's total liquid reserves, has been invested in a liquid and diversified portfolio of US treasury bonds, other fixed-income products and equities. The result of these investments, reported in other income, amounted to USD 2.2 million in the first quarter of 2024, compared to USD 2.1 million in the first quarter of 2023.
16.4 million, from USD 693.4 million on 31 December 2023 to USD 709.8 million on 31 March 2024. The increase was due to the net result of USD 28.4 million, partly offset by USD 12.0 million, which was the net effect of foreign currency translations of net investments in subsidiaries as well as adjustment of hedge accounting reserves related to UP.
FIRST QUARTER REPORT 2024 UIE PLC | 9 |
DIRECTORS' REPORT
Overall Strategy of UIE
UIE is a holding company focusing on long term value creation through active engagement with our portfolio companies and investments in evolving and leading businesses.
Our strategy is to invest in the agro-industrial sector as well as industrial and technology businesses that have the potential to uphold or gain leading positions in their respective markets.
We will continue to nurture our well-established investment in the agro-industrial sector through UP, whilst building new diversified platforms for creating value through investments with trusted partners.
We have a tradition of being active owners either through direct board or Investment Committee representation as
well as close collaboration with the respective management of our portfolio companies and firmly believe that cultivating sustainable business practices is an essential prerequisite for creating long-term value.
Many industries and sectors are undergoing profound transformation and we therefore prioritise and promote an agile mindset within our portfolio companies. Our ability to adapt to changing environments within attractive and growing business areas is a vital pillar towards the sustained and positive financial performance of UIE.
We are committed to maintaining a strong capital structure that enables us to pursue potential investments without undue dependence on debt financing. It is important to re-emphasise that UIE is a long-term investor with an unwavering commitment towards upholding the highest levels of integrity in our business dealings.
Financial Information
UIE publishes interim and annual reports, which are available on the Company's website and can be subscribed to via the website www.uie.dk/investor-relations/subscribe.
Financial Calendar 2024
14AUGUST | 26SEPTEMBER |
Half Year Report | Virtual information |
2024 | meeting 2024 |
19NOVEMBER |
a | |
e | |
L |
d
i
n
g
s | |||||
n | |||||
o | |||||
i | |||||
t | |||||
i | |||||
s | |||||
o | |||||
p |
Long-termInve s t o r
A c t
Third Quarter Report |
2024 |
Shareholders' Meeting 2024
Sustainable | i | |||
v | ||||
e | ||||
growth | O | |||
w | ||||
n | ||||
e | ||||
I | r | |||
n | s | |||
h | ||||
n | ||||
v | i | |||
a | p | |||
o | ||||
t | ||||
i | ||||
o | ||||
n | ||||
y | ||||
it | ||||
il | ||||
b | ||||
Sustaina |
In light of the tragic fire at Børsen on 16 April 2024, we regret to inform you that we are compelled to cancel the scheduled informal shareholders' meeting on Friday, 31 May 2024. Instead, UIE will provide all interested shareholders the opportunity to join a virtual information meeting on 26 September 2024.
FIRST QUARTER REPORT 2024 UIE PLC | 10 |
Attachments
- Original Link
- Original Document
- Permalink
Disclaimer
UIE - United International Enterprises Limited published this content on 28 May 2024 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 28 May 2024 07:06:07 UTC.