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COMPANY BRIEFING : MAGTAA
Sam OngGroup Deputy CEO Group CFO
SingaporeTuesday, 22 April 2008
OUTLINE
1.Magtaa Project Win Information
2. Impact on Financials
3.Hyflux’s Water Strategy
4. Souk Tleta (Tlemcen) Update
5. Summary
OUTLINE
1.Magtaa Project Win Information
2. Impact on Financials
3.Hyflux’s Water Strategy
4. Souk Tleta (Tlemcen) Update
5. Summary
MAGTAA PROJECT BID
Capacity
EPC Value
Offtakers
Concession Period
Project Company
500,000 m3/day
approximately US$500 mil
L’Algerienne Des Eaux(“ADE”)
25 years
51% MenaSpring49% Algeria Energy Company
Other Bidders(International Open Bidding)
Acciona Agua, Biwater/Tarco/Arcofina, GE
Water/Orascom, Inima/aqualia, Befasa
MAGTAA PROJECT HEADLIMES : GWI
“This brings Hyflux to the top of the desalination market, and that is the position we want to be in. In this bid for Magtaa, I believe we further
established a performance and cost ratio benchmark on top of what we were able to establish in Singapore.”
-Sam Ong, Group Deputy CEO and CFO
“A stunning [international open competitive] bid for the 500,000m3/day
Magtaa desalination plant in Algeria has put Hyflux on the brink of
big-time success …”
-Global Water Intelligence, April 2008
OUTLINE
1.Magtaa Project Win Information
2. Impact on Financials
3.Hyflux’s Water Strategy
4. Souk Tleta (Tlemcen) Update
5. Summary
• Hyflux 51% AEC 49% • WPA 25 years concession• Capacity 500,000 m3 / year• Pcod 28 mths from financial close
• Project Financing 70% -- prearranged by AEC-- predetermined 15-year USD fixed
• VAT and custom duty Incentives
• EPC 100% Hyflux• O&M 100% Hyflux
THE PROJECT
Magtaa
MenaSpring AEC
49%51%
Hyflux Ltd
100%
Sonatrach / ADE
WPAHyflux On / Offshore
EPC +
Hyflux Ltd
100%
O&M
Hyflux Investments of S$80mil
• Equity Income• Dividend• Equity Repatriation
Financial Incentives• Project Financing • Take or Pay • Electricity rates• Vat & Custom duty Incentives
EPC + O&M• EPC Revenue of S$600mil from
2009 to 2011 expected.• O&M Revenue of S$60mil recurring
annually with costs escalation clauses
THE INVESTMENT
Magtaa
MenaSpring AEC
49%51%
Hyflux Ltd
100%
Sonatrach / ADE
WPAHyflux On / Offshore
EPC +
Hyflux Ltd
100%
O&M
China
81%
SG
7%
OTH
12%
SG
26%
OTH
18%
China
56%
China
71%
SG
21%
OTH
8%
Note : Graph is not drawn to scale.
HYFLUX : Growing China in A Growing Pie
FY2007 act
FY2006 actFY2005 act
China
81%
SG
7%
MENA
12% China
58%
MENA
40%
China
50%
MENA
49%
Note : Graph is not drawn to scale. This is a snapshot and the numbers may change in accordance to delivery schedules and potential future orders.
HYFLUX : Growing Algeria within MENA in A Growing Pie
FY 2008 est
FY 2009 est
FY 2007 act
435870
~1500
4Q06 4Q07 April 2008 Est
HYFLUX : Order Book with MAGTAA
S$mil
Note : The net order book is a snapshot estimated figure as of 22 April 2008. There are additions and deletions YTD esp in China.
OUTLINE
1.Magtaa Project Win Information
2. Impact on Financials
3.Hyflux’s Water Strategy
4. Souk Tleta (Tlemcen) Update
5. Summary
HYFLUX’S WATER STRATEGY:Sustainable Global Presence in Desalination
Membrane (proprietary strength …)Largest UF pretreatment plant in the world.
Location (not a one time deal …)
High water scarcity with
comprehensive PPP schemes.
Desalination (fastest growing …) Largest membrane seawater desalination plant in Singapore, China, Algeria and the world.
ChinaTianjin Dagang
150,000m3/day, US$100 MIL2008
AlgeriaMagtaa
500,000m3/day, ~US$500 MIL
2011
AlgeriaSouk Tleta (Tlemcen)
200,000m3/day, US$200 MIL2009
SingaporeSingSpring
136,380m3/day, US$200 MIL2005
HYFLUX’S WATER STRATEGY:Favorable Commercial & Technological Forces in Desalination
Projected Growth of Installed Desalination Capacity (Gulf vs Rest of World)
China
India
Algeria
HYFLUX’S WATER STRATEGY:Sustainable Risk & Reward PPP with High Water Scarcity
Algeria is one the most water-stressed countries in the world, which presents huge opportunities for
seawater desalination and water recycling.
Highest concentration of large-scale membrane seawater desalination plants in the world
HYFLUX’S WATER STRATEGY:Value Added Breakthrough Performance / Costs Benchmark
0
0.5
1
1.5
2
2.5
1991-2000 2001-2005 2006-2010 2011-2015
Historic and Forecast Capacity Growth in Algeria
Algeria Market Share (awarded capacity)
Hyflux,32%
Others, 68%
Capacity, million m
3/day
Source: Desalination Markets 2007, GWI
*equivalent of 4 additional Magtaasneeded in 2011-2015
HYFLUX’S WATER STRATEGY:Sustainable Growth Within A Plant … Within A Country.
to be launched end 2008 BEJAIA --100,00014
to be launched end 2008JIJEL --100,00013
2,370,000
50,000
100,000
200,000
500,000
120,000
100,000
200,000
200,000
200,000
200,000
100,000
200,000
CAPACITY(m3/day)
2.521 BILTOTAL
INIMA-AQUALIA, AECEL TARF -91 MIL12
BIWATER, AECOUED SEBT -115 MIL11
BEFASA, AECTENES -291 MIL10
DEC 2009136 MILINIMA-AQUALIA-SPA SPAIN, AEC
RAS DJINET7
HONAINE
MOSTAGANEM
SKIKDA
DEC 2011468 MILHYFLUX, AECMAGTAA9
DEC 2009181 MILSNC LAVALIN-ACCIONA SPAIN, AEC
FOUKA8
DEC 2009238 MILHYFLUX, AECSOUK TLETA6
NOV 2009230 MILGEIDA SPAIN, AEC5
NOV 2009212 MILINIMA-AQUALIA-SPA SPAIN, AEC
4
SEP 2008204 MILGEIDA SPAIN, AECBENI SAF3
FEB 2008105 MILGEIDA SPAIN, AEC2
JAN 2008250 MILGE IONICS, AECHAMMA1
EXPECTED PCOD
PROJECT VALUE (US$)
PROJECT COMPANYPLANTNO
HYFLUX’S WATER STRATEGY
COMPANY BRIEFING : MAGTAA
Sam OngGroup Deputy CEO Group CFO
SingaporeTuesday, 22 April 2008
HYFLUX’S WATER STRATEGY: Value Add Technology & Knowhow of an Integrated Water Company
0
10
20
30
40
50
60
70
1980 1985 1990 1995 2000 2005 2010 2015
Capacity, millions of m3/day Membrane
Thermal
Historic and Forecast Installed Desalination Capacity by Technology
Source: Desalination Markets 2007, GWI
Drivers for Membranes• improvements in membrane efficiency• reduction in membrane cost• development of energy recovery devices
• Inhouse Design & Engineering capability• Inhouse UF pretreatment membranes• Inhouse Membrane R&D capability
OUTLINE
1.Magtaa Project Win Information
2. Impact on Financials
3.Hyflux’s Water Strategy
4. Souk Tleta (Tlemcen) Update
5. Summary
SOUK TLETA (TLEMCEN) UPDATE : Focusing on Execution
EPCProgress
• Construction started in Feb 2008• 6% of EPC contract completed• 2 weeks ahead of time
OUTLINE
1.Magtaa Project Win Information
2. Impact on Financials
3.Hyflux’s Water Strategy
4. Souk Tleta (Tlemcen) Update
5. Summary
Incremental Capacity : Certainty of Financial Visibility
950
Built Capacity
950
450
Built Capacity
Singapore, China,
India & MENA
China +
1st Algeria Start
550
China +
1st Algeria End +
2nd Algeria Start
Accum. Capacity
1,950
500
2,450
Total Capacity Built
+ To Be Built
2001 to 2007 2008 2009 2010 and 2011
China Order Bk Completed +
2nd Algeria End
Accum. Capacity
1,400
Future
BOT
Growth
TBA
Note : Graph is not drawn to scale. This is a snapshot and the numbers may change in accordance to delivery schedules and potential future orders.
Snapshot Summary excludes TOT and
Existing Plant Expansions to be announced.
Capacity : mil litre / day (mld)
• The Magtaa Win
• Hyflux the World Leader in
Desalination & Water Recycling
• Sustainable Strategy
• Sustainable Business Model
• Smart Execution
SUMMARY : MAGTAA
THANK YOU
Sam OngGroup Deputy CEO Group CFO
SingaporeTuesday, 22 April 2008