Socfin
2023ANNUAL REPORT
SOCIETE FINANCIERE DES CAOUTCHOUCS
Table of contents
Group profile | 4 | |
1. | Overview of the Group | 4 |
2. | History | 4 |
3. | Group structure | 5 |
4. | Information on the holdings of Socfin | 6 |
International market for rubber and palm oil | 9 | |
1. | Rubber | 9 |
2. | Palm oil | 12 |
Environment and social responsibility | 15 | |
Key figures | 16 | |
1. | Activity Indicators | 16 |
2. | Key figures in the consolidated income statement | 17 |
3. | Key figures in the consolidated statement of financial position | 17 |
Stock market data | 18 | |
Corporate governance statement | 19 | |
1. | Introduction | 19 |
2. | Corporate governance chart | 19 |
3. | Board of Directors | 19 |
4. | Committees of the Board of Directors | 22 |
4.1. Audit Committee | 22 | |
4.2. Appointment and Remuneration Committee | 22 | |
5. | Remunerations | 23 |
6. | Shareholding status | 23 |
7. | Financial calendar | 24 |
8. | External audit | 24 |
9. | Corporate, social and environmental responsibility | 24 |
10. Other information | 24 | |
Statement of compliance | 25 | |
Consolidated management report | 26 | |
Auditor's report on the consolidated financial statements | 30 | |
Consolidated financial statements | 35 | |
1. | Consolidated statement of financial position | 35 |
2. | Consolidated income statement | 37 |
3. | Consolidated statement of comprehensive income | 38 |
4. | Consolidated statement of cash flows | 39 |
5. | Consolidated statement of changes in equity | 40 |
6. | Notes to the consolidated financial statements | 41 |
Note 1. Overview and material accounting policies | 41 | |
Note 2. Subsidiaries | 53 | |
Note 3. Restatement and reclassification | 56 | |
Note 4. Goodwill | 57 | |
Note 5. Leases | 58 | |
Note 6. Intangible assets | 60 | |
Note 7. Property, plant and equipment | 61 | |
Note 8. Biological assets | 63 | |
Note 9. Depreciation and impairment | 64 | |
Note 10. Impairment of assets | 64 | |
Note 11. Investment properties | 66 | |
Note 12. Non-wholly owned subsidiaries in which non-controlling interests are significant | 67 | |
Note 13. Financial assets at fair value through other comprehensive income | 70 | |
Note 14. Deferred taxes | 71 | |
Note 15. Current tax assets and liabilities | 72 | |
Note 16. Income tax expense | 73 |
2 | ANNUAL REPORT 2023 | Socfin
Table of contents
Note 17. Inventories | 75 |
Note 18. Trade receivables (current assets) | 76 |
Note 19. Other receivables (current assets) | 76 |
Note 20. Cash and cash equivalents | 77 |
Note 21. Share capital and share premium | 77 |
Note 22. Legal reserve | 77 |
Note 23. Pension obligations | 78 |
Note 24. Financial debts | 81 |
Note 25. Trade and other payables | 85 |
Note 26. Financial Instruments | 86 |
Note 27. Staff costs and average number of staff | 88 |
Note 28. Other financial income | 88 |
Note 29. Financial expenses | 89 |
Note 30. Net earnings per share | 89 |
Note 31. Dividends and directors' fees | 89 |
Note 32. Information on related party | 90 |
Note 33. Off balance sheet commitments | 91 |
Note 34. Segment information | 91 |
Note 35. Risk management | 99 |
Note 36. Contingent liabilities | 102 |
Note 37. Political and economic environment | 104 |
Note 38. Events after the closing date | 104 |
Note 39. Assets classified as held for sale | 105 |
Note 40. Auditor's fees | 105 |
Company's management Report | 106 |
Audit report on the Company's financial statements | 112 |
Company's financial statements | 116 |
1. Balance sheet as at 31 December 2023 | 116 |
2. Income statement for the year ended 31 December 2023 | 118 |
3. Notes to the financial statements for the year 2023 | 119 |
Note 1. Overview | 119 |
Note 2. Accounting principles, rules and methods | 119 |
Note 3. Financial fixed assets | 122 |
Note 4. Amounts owed by affiliated undertakings | 123 |
Note 5. Equity | 123 |
Note 6. Amounts to affiliated undertakings | 124 |
Note 7. Income from participating interests | 124 |
Note 8. Income from other investments and loans forming part of the fixed assets | 124 |
Note 9. Taxation | 124 |
Note 10. Remuneration of the Board of Directors | 125 |
Note 11. Political and economic environment | 125 |
Note 12. Off-balance sheet commitments | 125 |
Note 13. Significant events after the year end | 125 |
Glossary | 126 |
Socfin | ANNUAL REPORT 2023 | 3
GroupPortraitprofiledu Groupe
1. Overview of the Group
Société Financière des Caoutchoucs S.A., abbreviated as "Socfin", is a Luxembourgish company (the "Company"), with its registered office at 4 avenue Guillaume, L-1650 Luxembourg. It was incorporated on 5 December 1959 and is listed on the Luxembourg Stock Exchange.
Socfin's principal activity is the management of a portfolio of shares. These shares mainly focus on the exploitation of more than 190,000 hectares of tropical palm oil plantations and rubber trees, located in Africa and South-East Asia. As of 2023, Socfin employs 33,809 people and has achieved a consolidated revenue of EUR 863 million over that same year.
2. History
- 05/12/1959 Constitution of the Société Financière Luxembourgeoise S.A., abbreviated as "Socfinal" in the form of a holding company.
- 09/06/1960 The Socfinal shares are listed on the Luxembourg Stock Exchange.
- 31/12/1960 Since its formation, Socfinal has invested, among others, in the following companies: Société Financière des Caoutchoucs "Socfin" (Belgium); Plantations Nord-Sumatra (Belgium); Selangor Plantations Company Berhad (Malaysia); Sennah Rubber Company Ltd (England) and various societies of Congolese equatorial cultures.
- 31/12/1965 The portfolio includes new investments in Indonesia, such as : Société de Cultures Asahan; Société de Cultures Batangara; Huileries de Deli and Société de Cultures Sungei Liput
- 31/12/1971 Socfinal invests in the Compagnie Internationale de Cultures "Intercultures" (former name of Socfinaf), a Luxembourgish company listed on the Luxembourg Stock Exchange; Socfin Industrial Development "Socfinde" (Luxembourg) and in Compagnie du Cambodge (France).
- 31/12/1972 Socfinal participates in the formation of Socfinasia (Luxembourg) in exchange for the shares of Indonesian companies Asahan, Batangara, Huileries de Deli and Sungei Liput. Socfinasia will be listed on the Luxembourg Stock Exchange in 1973.
- 31/12/1975 Disposal of Socfin (Belgium) shares from the portfolio.
- 31/12/1980 Acquisition of Selangor Holding shares, a Luxembourgish company listed on the Luxembourg Stock Exchange.
- 31/12/1994 Socfinal invests 60% in the capital of SOGB (Côte d'Ivoire) following the privatisation of this Ivorian plantation. This participation will be transferred to Intercultures.
- 31/12/1999 Sale of holdings Selangor Holding and Plantations Nord-Sumatra
- 31/12/2000 Sale of Sennah Rubber Company shares following the public tender on these shares.
- 15/11/2006 Following the distribution of Intercultures shares by Socfinasia (spin-off), Socfinal directly holds, onthe one hand, Socfinasia (Asia), and on the other, Intercultures (Africa).
- 10/01/2011 Extraordinary General Meeting, which ratified the abandonment of the holding 29 status, and the change of the name to Société Financière des Caoutchoucs, abbreviated as "Socfin". The name of Intercultures is changed to Socfinaf.
- 01/07/2011 The share is split by 20
- 29/08/2014 Socfin exchanges 9% of Socfinaf's shares against 100% of the shares of Société Anonyme Forestière and Agricole SAFA, the company incorporated under French law. The latter owns 68.93% of
Safacam, a Cameroonian plantation company that exploits 5,400 hectares of palm oil trees and
4,400 hectares of rubber trees. Following this exchange, Socfin still holds 55.08% of Socfinaf. - 31/12/2014 The SAFA participation is brought into Socfinaf through a capital increase by contribution in kind. Socfin holds 56.48% of Socfinasia's capital and 58.79% of Socfinaf's capital.
4 | ANNUAL REPORT 2023 | Socfin
Group profile
3. Group structure
SOCFINAF | ||||
Luxembourg | ||||
100% | 93% | |||
100% | 87% | BEREBY- | ||
FINANCES | ||||
Côte d'Ivoire | ||||
70% | 73% | |||
100% | ||||
66%
STP INVEST | 100% 100% | SAFA |
Belgique | France | |
88% | 69% | |
100%
100% 67%
100%
65% | SOCFIN | 58% |
Luxembourg
20% SOCFINDE 80%
Luxembourg
33% 19%
48%
30% | 35% |
35% | |
15% | 30% |
10% | 15% |
100% | 10% |
50% | |
50% |
50% 50%
50% 50%
50% 50%
50% 50%
50% 50%
50% 50%
SOCFINASIA
Luxembourg
100% | |
100% | 100% |
PNS LTD | 100% | |||
Luxembourg | ||||
90% | 100% | |||
Holding companies
Socfin | ANNUAL REPORT 2023| 5
Group profile
4. Information on the holdings of Socfin
Portfolio | Number of shares | Direct % |
1) Listed shares | ||
Luxembourg | ||
Socfinasia | 11,413,822 | 58.25% |
Socfinaf | 11,528,898 | 64.64% |
2) Non-listed shares | ||
Luxembourg | ||
Terrasia | 1,891 | 18.91% |
Induservices | 3,500 | 35.00% |
Management Associates | 3,000 | 30.00% |
The following pages contain a summary of the subsidiaries' activity. It also includes comments on the financial information regarding the past two financial years of the main companies in which Socfin holds a direct or indirect participation.
Unless indicated otherwise, equity includes capital, reserves and the results that were brought forward before the allocation of current year results.
Corporate data refers to consolidated data.
The balance sheet displays figures in the functional currency of the respective entities.
- | ANNUAL REPORT 2023 | Socfin
Group profile
SOCFINASIA
SOCFINASIA is a Luxembourgish entity with stakes in companies that operate directly or indirectly in SouthEast Asia, namely in the rubber and palm oil sectors.
Share capital: EUR 24,492,825.
Key figures (thousands of EUR)
At at 31 December
Fixed assets
Current assets
Equity (*)
Borrowings, provisions and third parties
Profit / (loss) for the period
Distribution
Share price (EUR)
Dividend per share (EUR)
Dividend / market capitalisationG (%)
Socfin's stake (%)
(*) Before profit allocation but after interim dividend.
The profit for the year, which ended on 31 December 2023, amounts to EUR 48,129,963. At the Annual General Meeting, which will take place on 29 May 2024, the Board of Directors will propose the payment of a dividend of EUR 4.00 per share. From this, EUR 2.00 per share has already been paid at the end of 2023 as an interim dividend for the financial year of 2023.
20232022
357,705405,668
72,55352,029
424,074452,144
6,1835,552
48,13070,685
87,08676,200
15.4014.80
4.003.50
25.9723.65
58.2558.25
Socfin | ANNUAL REPORT 2023 | 7
Group profile
SOCFINAF
SOCFINAF is a Luxembourgish entity with stakes in companies that operate directly or indirectly in tropical Africa, mainly in the rubber and palm oil sectors.
Share capital: EUR 35,673,300.
The profit for the year, which ended on 31 December 2023 amounts to EUR 2,658,856. At the Annual General Meeting, which will take place on 29 May 2024, the Board of Directors will propose not to pay any dividend for the financial year of 2023.
Key figures (thousands of EUR) | ||
At at 31 December | 2023 | 2022 |
Fixed assets | 317,047 | 361,924 |
Current assets | 32,231 | 36,676 |
Equity | 223,913 | 221,254 |
Borrowings, provisions and third parties | 125,366 | 177,347 |
Profit / (loss) for the period | 2,659 | -37,543 |
Distribution | 0 | 0 |
Share price (EUR) | 10.80 | 11.80 |
Dividend per share (EUR) | 0 | 0 |
Dividend / market capitalisationG (%) | 0 | 0 |
Socfin's stake (%) | 64.64 | 64.64 |
8 | ANNUAL REPORT 2023 | Socfin
International market for rubber and palm oil
1. Rubber
SGX - NATURAL RUBBER - 5 years +
$ct/Kg
300
RSS3
300
250
200
150
100
50
TSR20
250
200
150
100
50
SGX - NATURAL RUBBER - 1 year +
$ct/Kg | ||
220 | RSS3 | 220 |
200 | TSR20 | 200 |
180 | 180 | |
160 | 160 | |
140 | 140 | |
120 | 120 | |
100 | 100 |
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb | |||||
2023 2023 2023 | 2023 | 2023 2023 2023 | 2023 2023 2023 | 2023 2023 2024 | 2024 |
Socfin | ANNUAL REPORT 2023 | 9
International market for rubber and palm oil
The international market in 2023
The average natural rubber price (TSR20G 1st position on SGXG) for the year 2023 is USD 1,377/T FOBG Singapore compared with USD 1,548/T in 2022, a fall of 11%.
Converted into euros, the average TSR20G price in 2023 is EUR 1,273/T, compared with EUR 1,469/T in 2022.
The end of 2022 was marked by the end of the 'zero- covid' policy in China and high stocks of natural rubber in consumer countries. China, the world's leading consumer of natural rubber, saw one of its lowest rates of economic growth for 40 years in 2022, at 3%.
Hopes of a recovery in Chinese economic activity at the start of the year enabled natural rubber prices to reach levels close to USD 1,450/T at the end of January 2023. Indeed, the lifting of public health measures was expected to go hand in hand with a spectacular upturn in the Chinese economy. In reality, however, the country has not recovered, faced with a major property crisis, falling exports and sluggish domestic consumption.
Against this backdrop, and despite the start of the winter season in producing countries, prices remained under pressure from February onwards, fluctuating between USD 1,300 and USD 1,400/T against a backdrop of slowing consumption, the war in Ukraine, persistent inflationary pressures, restrictive monetary policies on the part of the main central banks and turbulence in the banking sector. In mid-August, natural rubber prices reached their lowest point of the year at USD 1,270/T.
The fall in demand for natural rubber was particularly felt in the European and American markets, leading to an increase in inventories at tyre manufacturers' plants.
The fall in production in Indonesia and Malaysia, due in particular to a rubber tree disease, did not have
a positive effect on natural rubber prices, as it was offset by increased production in other countries such as Côte d'Ivoire and Cambodia. In 2023, Côte d'Ivoire recorded its strongest annual production growth (+26%) for five years, consolidating its status as the world's third producer with 1.68 million tons produced.
From the end of August, natural rubber prices recovered following measures taken by the Chinese government to stimulate economic growth and downward revisions to production in Thailand and Indonesia due to heavy rains hampering harvests.
At the end of December, natural rubber prices broke through the USD 1,500/T barrier and reached their highest level of the year at USD 1,561/T on the last closing day of 2023.
In stark contrast to 2021 and the first half of 2022, global logistics improved at the end of 2022 and ocean freight rates fell steadily during 2023 to return to pre-COVID levels. Freight rates out of Asia have fallen faster than out of Africa, making Asian rubber more competitive with African rubber.
However, the tensions that have arisen in the Red Sea have had an impact on freight rates from Asia to Europe, which began to rise sharply at the end of 2023. Shipowners are now having to divert their vessels to the Cape of Good Hope instead of the Suez Canal, and are imposing substantial freight surcharges for cargoes originating in Asia.
According to the latest forecasts published by GlobalData in February 2024, world natural rubber production in 2023 will be 14.15 million tons, down 1.1% on 2022, while world consumption will be
14.03 million tons, up 2.3% on 2022, resulting in a surplus of 118,000 tons in 2023 compared with 596,000 tons in 2022.
10 | ANNUAL REPORT 2023 | Socfin
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SOCFIN - Société Financière des Caoutchoucs SA published this content on 26 April 2024 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 26 April 2024 13:51:02 UTC.