Anglo Eastern Plantations PLC has published the following regulatory news announcement:

RNS Number : 2433XAnglo-Eastern Plantations PLC25 August 2022 

Anglo-Eastern Plantations Plc

("AEP", "Group" or "Company")

 

Announcement of interim results for the six months ended 30 June 2022

 

The group, comprising Anglo-Eastern Plantations Plc and its subsidiaries (the "Group"), is a major producer of palm oil and rubber with plantations across Indonesia and Malaysia, has today released its results for the six months ended 30 June 2022.

 

Financial Highlights

 

Continuing operations

 

2022
6 months
to 30 June
$m

(unaudited)

 

2021
6 months
to 30 June (restated)
$m

(unaudited)


 

2021
12 months
to 31 December
$m

(audited)

Revenue

249.2


197.7


433.4

Profit before tax

 





 - before biological assets ("BA") movement

94.8


56.4


132.7

 - after BA movement

89.5


60.2


137.1

 

Basic Earnings per ordinary share ("EPS")

 





 - before BA movement

153.51cts


93.76cts


235.25cts

 - after BA movement

144.73cts


100.11cts


242.34cts

 

 

Enquiries:

 

Anglo-Eastern Plantations Plc


Dato' John Lim Ewe Chuan 

 +44 (0)20 7216 4621



Panmure Gordon (UK) Limited


Dominic Morley

+44 (0)20 7886 2954

 

 

 

Chairman's Interim Statement

 

The interim results for the Group for the six months to 30 June 2022 are as follows:

 

Revenuefrom continuing operations for the six months to 30 June 2022 was $249.2 million, 26% higher than $197.7 million reported for the same period of 2021. The Group's gross profit from continuing operations was $90.3 million compared to $61.8 million for the first six months of 2021. Overall profit before tax, after biological assets ("BA") movement, from continuing operations for the first half of 2022 was 49% higher at $89.5 million against $60.2 million for the corresponding period in 2021. The overall profit from continuing operations includes a net reversal of impairment losses of $0.2 million for the first half of 2022 compared to a reversal of impairment loss of $0.1 million for the first half of 2021. The BA movement adjustment from continuing operations for the first half of 2022 was a debit of $5.3 million compared to a credit of $3.9 million in the last period. The higher profit was attributed to the higher Crude Palm Oil ("CPO") prices.

 

Fresh Fruit Bunches ("FFB") productionfrom continuing operationsfor the first half of 2022 was 3% lower at 550,800mt compared to 569,100mt for the same period in the prior year due to lower production in Bengkulu and Kalimantan regions. The harvest in Bengkulu was lower by 13% primarily due to a reduction of almost 1,000ha of matured area of which 428ha was replanted in the second half of 2021 while another 551ha was cleared for replanting in the first half of 2022. During 1Q 2022 the public roads in Kurun township were closed for a month because of extremely bad weather which affected the transportation of crops and in turn caused a 9% decline in the harvest in Central Kalimantan. Younger palms in North Sumatera continue to out-performed the rest of the regions by registering a growth of 6% against last year. Bought-in crops for the first half of 2022 also decreased by 4% to 557,600mt from 583,400mt. The increased purchase of outside crops in North Sumatera (6%) and Kalimantan (9%) could not off-set a 19% decrease in crop purchase in the Bengkulu region. The significant decrease in the Bengkulu region is caused by the reopening of a mill of one of the suppliers following a shutdown for maintenance in 2021. In addition, some of AEP's mills had to reduce external crop purchases due to the CPO storage tanks reaching their maximum storage capacities as inventory built-up during the export ban. 

 

Operational and financial performance

 

For the six months ended 30 June 2022, gross profit marginfrom continuing operationsincreased to 36.2% from 31.3% as the Group experienced higher CPO and palm kernel prices.

 

CPO price ex-Rotterdam averaged $1,640/mt for the first six months to 30 June 2022, 46% higher than $1,122/mt over the same period in 2021. As a result, the Group's average ex-mill price was higher by 47% at $1,035/mt for the same period (H1 2021: $706/mt). The ex-mill prices are normally at a discount to ex-Rotterdam prices as buyers are required to pay logistic charges and Indonesian CPO tax and levy. The Group also benefited from higher palm kernel prices which was 66% higher at the average price of $808/mt against $486/mt last year.

 

Profit after taxfrom continuing operationsfor the six months ended 30 June 2022 was 45% higher at $68.8 million, compared to a profit after taxfrom continuing operationsof $47.3 million for the first six months of 2021.

 

The resulting basic earnings per share from continuing operations for the period was 144.73cts (H1 2021: 100.11cts).

 

The Group's balance sheet remains strong with no outstanding bank loans. Net assets as at 30 June 2022 were $585.3 million compared to $496.6 million as at 30 June 2021 and $542.1 million as at 31 December 2021. The increase in net assets from the last interim report was attributed to higher profit and higher inventories. Inventories, comprising mainly of CPO, built up to $41 million against $15 million as at 30 June 2021 due to the CPO export ban in Indonesia which is explained in more detail under commodity prices below. The Indonesian Rupiah has depreciated by 4% against the US dollar in the first half of 2022.

 

As at 30 June 2022, the Group had cash and cash equivalents including all fixed deposits with banks of $246.8 million (H1 2021: $160.7 million, 31 December 2021: $219.7 million).

 

Operating costs

 

Operating costs for the Indonesian operations were higher in the first half of 2022 compared to the same period in 2021 mainly due to higher prices paid for third party crops, higher costs of maintaining plantations and mills and higher harvesting costs arising from the increased   matured area. Fertiliser costs rose sharply by 80% in the first half of 2022 to $15.8 million from $8.8 million for the corresponding period last year. Transport costs have also increased significantly by 56% to $2.8 million from $1.8 million for the corresponding period last year as diesel prices have increased.

 

Production and Sales

2022

2021

2021


6 months

6 months

Year


to 30 June

to 30 June

to 31 December


mt

mt

mt

Oil palm production

 



FFB

 



- all estates from continuing operations

550,800

569,100

1,152,400

- estates from discontinued operations

21,500

17,400

37,200

- bought-in from third parties

557,600

583,400

1,142,200

Saleable CPO

227,800

238,700

473,200

Saleable palm kernels

54,400

57,100

97,100


 



Oil palm sales

 



CPO

200,000

237,900

477,600

Palm kernels

48,900

55,400

113,400

FFB sold outside

17,800

13,400

29,400


 



Rubber production

168

206

425

 

The Group's six mills processed a total of 1,112,100mt in FFB for the first half of 2022, a 4% decrease compared to 1,156,500mt for the same period last year.

 

Overall CPO produced for the first half of 2022 was 5% lower at 227,800mt from 238,700mt. The oil extraction rate for the first half of 2022 was 20.5% compared to 20.6% in the same period last year.

 

Commodity prices

 

The CPO price ex-Rotterdam for the first half of 2022 averaged$1,640/mt, 46% higher than last year (H1 2021: $1,122/mt). The CPO price started the year at $1,350/mt, gradually trending upwards to peak in March 2022 at $2,000/mt before dropping to $1,420/mt towards the middle of June, before recovering to close at $1,500/mt at 30 June 2022.The rally in the first three months of 2022 was built upon; speculation of unfavourable weather conditions in prime soybean-producing countries which have adversely affected the supply of soybean oil (of which CPO is the closest substitute), the gradual re-opening of the world economy after the ravage of Covid-19 and the disruption to supplies because of the Russia-Ukraine conflict. The Indonesian government's move to ban the export of CPO and refined palm oil from 28 April 2022 to 22 May 2022 added further volatility to global edible oil prices. CPO prices have since retracted to lower levels due to high inventory of CPO built up during the export ban. The Indonesian government is constantly refining its policies to accelerate exports of CPO as well as to contain the price of domestic cooking oil which could trigger more volatility in prices.

 

Rubber price averaged $1,670/mt, 4% lower than H1 2021 at $1,734/mt.

 

Development

 

The Group's planted areas at 30 June 2022 comprised:

 

Total

Mature

Immature

Continuing operations

Ha

ha

Ha

North Sumatera

19,107

18,851

256

Bengkulu

16,557

14,912

1,645

Riau

4,836

4,836

-

Kalimantan

17,409

14,889

2,520

Bangka

2,564

1,065

1,499

Plasma

3,586

2,268

1,318

Indonesia

64,059

56,821

7,238

Malaysia

3,453

3,453

-


67,512

60,274

7,238

Discontinued operations




South Sumatera

6,662

6,064

598

Plasma

1,065

1,020

45

 

7,727

7,084

643

Total: 30 June 2022

75,239

67,358

7,881

Total: 31 December 2021

75,204

65,921

9,283

Total: 30 June 2021

74,131

66,204

7,927

 

 

 

The Group's new planting and replantingfor the first six months of 2022 totalled 439ha compared to 1,025ha for the same period last year. In addition, Plasma planting for the period was 152ha (H1 2021: 187ha).

 

The Group remains optimistic that it will meet substantially its reduced total planting target of 1,900ha (including replanting) in 2022. The Group's total landholding from its continuing operations comprises some 90,690ha, of which the planted area stands at around 67,512ha (H1 2021: 66,623ha) with the balance of estimated plantable land at 10,850ha (H1 2021: 11,590ha).

 

The construction of the seventh mill in North Sumatera, which has been delayed by the frequent lockdowns caused by the pandemic in the country, is nearing completion. It is making good progress as most machineries have been prefabricated and are being assembled on site. Some items like the steam turbine and decanter have arrived at the local port and are awaiting delivery to the construction site. The mill is expected to be completed before the year end. The costs of construction have reached about $22 million against an earlier estimate of $19 million.

 

In the meantime, an external consultant has been appointed to undertake an environmental study to advise compliance criteria to apply for the necessary permits to build the eighth mill in Kalimantan. 

 

Dividend

 

As in previous years, no interim dividend has been declared. A final dividend of 5.0 cents per share in respect of the year ended 31 December 2021 was paid on 15 July 2022.

 

Outlook

 

CPO prices are expected to weaken in the second half of 2022 as the industry enters into the high production season. In addition, the Indonesian government's decision to waive the export levy until the end of August 2022 in its effort to flush out and reduce its stockpile of palm oil could push prices even lower. An agreement between Ukraine and Russia to reopen the ports in the Black Sea to allow the export of commodities, including sunflower oil, from the region would also negatively impact on palm oil prices. Economists fear that inflationary pressure arising from higher commodity prices could trigger a worldwide recession in the coming months which could dampen demand for CPO. It is increasingly apparent that 2022 will be a year of two halves, with record CPO prices in the first half of 2022 and much lower prices in the second half. On a positive note, the Indonesian government's determination to develop and increase the biodiesel blending to B35 and B40 from B30 in the near future would help enhance the domestic consumption and absorb a higher production of CPO.   

 

Tribute

 

The Board has previously announced its profound sadness of the passing of our ex-Chairman, Madam Lim Siew Kim on 14 July 2022. Madam Lim joined the Board in 1993 and was the Non-Executive Chairman from 2011 until her recent retirement. During her tenure, the Group grew in profitability and the business expanded to what it is today. The Board of Directors had conveyed their condolences to the family members at the time and would like to formally record their appreciation and thanks for Madam Lim's invaluable guidance and advice during her tenure on the Board.

 

Principal risks and uncertainties

 

The principal risks and uncertainties, including the risks due to the Coronavirus pandemic, have broadly remained the same since the publication of the annual report for the year ended 31 December 2021.

 

A more detailed explanation of the risks relevant to the Group is on pages 42 to 47 and from pages 130 to 135 of the 2021 annual report which is available at https://www.angloeastern.co.uk/.

 

 

 

Mr Jonathan Law Ngee Song

Chairman

25 August 2022

 

 

 

Responsibility Statements

 

We confirm that to the best of our knowledge:

 

a)       The unaudited interim financial statements have been prepared in accordance with International Accounting Standards ("IAS") 34: Interim Financial Reporting as adopted by the European Union;

 

b)       The Chairman's interim statement includes a fair review of the information required by Disclosure and Transparency Rule ("DTR") 4.2.7R (an indication of important events during the first six months and a description of the principal risks and uncertainties for the remaining six months of the year); and

 

c)       The interim financial statements include a fair review of the information required by DTR 4.2.8R (material related party transactions in the six months ended 30 June 2022 and any material changes in the related party transactions described in the last Annual Report) of the DTR of the United Kingdom Financial Conduct Authority.

 

 

 

By order of the Board

Dato' John Lim Ewe Chuan

Executive Director, Corporate Finance and Corporate Affairs

25 August 2022

 

 



 


Condensed Consolidated Income Statement

 


2022

6 months to 30 June

(unaudited)

 

2021

6 months to 30 June (restated)

(unaudited)

 

2021

Year to 31 December

(audited)

 

 

Notes

 

Result before BA movement*
$000

BA movement
$000

Total
$000

Result

before BA movement*
$000

BA movement
$000

Total
$000

Result

before BA movement*
$000

BA movement
$000

Total
$000

Continuing operations


 

 

 







Revenue

4

249,229

-

249,229

197,678

-

197,678

433,421

-

433,421

Cost of sales


(153,633)

(5,314)

(158,947)

(139,743)

3,865

(135,878)

(300,354)

4,349

(296,005)

Gross profit


95,596

(5,314)

90,282

57,935

3,865

61,800

133,067

4,349

137,416

Administration expenses


(3,015)

-

(3,015)

(3,317)

-

(3,317)

(8,764)

-

(8,764)

Reversal of impairment


622

-

622

133

-

133

5,437

-

5,437

Impairment losses


(366)

-

(366)

-

-

-

(585)

-

(585)

(Provision) / Reversal for expected credit loss


 

(6)

 

-

 

(6)

 

(1)

 

-

 

(1)

 

177

 

-

 

177

Operating profit


92,831

(5,314)

87,517

54,750

3,865

58,615

129,332

4,349

133,681

Exchange gains


311

-

311

298

-

298

212

-

212

Finance income

5

1,714

-

1,714

1,331

-

1,331

3,214

-

3,214

Finance expense

5

(8)

-

(8)

(12)

-

(12)

(24)

-

(24)

Profit before tax

6

94,848

(5,314)

89,534

56,367

3,865

60,232

132,734

4,349

137,083

Tax expense

7

(21,865)

1,169

(20,696)

(12,128)

(854)

(12,982)

(24,784)

(958)

(25,742)

Profit for the period from continuing operations


72,983

(4,145)

68,838

44,239

3,011

47,250

107,950

3,391

111,341

(Loss) / gain on discontinued operations, net of tax


(297)

(75)

(372)

(1,512)

67

(1,445)

(28,471)

50

(28,421)

 


72,686

(4,220)

68,466

42,727

3,078

45,805

79,479

3,441

82,920

 


 

 

 







Profit for the period attributable to:


 

 

 







-  Owners of the parent


60,582

(3,551)

57,031

35,746

2,581

38,327

65,485

2,856

68,341

-  Non-controlling interests


12,104

(669)

11,435

6,981

497

7,478

13,994

585

14,579

 


72,686

(4,220)

68,466

42,727

3,078

45,805

79,479

3,441

82,920

Profit for the period from continuing operations attributable to:


 

 

 







-  Owners of the parent


60,845

(3,480)

57,365

37,163

2,517

39,680

93,245

2,809

96,054

-  Non-controlling interests


12,138

(665)

11,473

7,076

494

7,570

14,705

582

15,287

 


72,983

(4,145)

68,838

44,239

3,011

47,250

107,950

3,391

111,341

Earnings per share attributable to the owners of the parent during the period


 

 

 




 

 

 

 

 

 

Profit


 

 

 







-  basic and diluted

9

 

 

143.89cts



96.70cts



172.42cts

Profit from continuing operations


 

 

 







-  basic and diluted

9

 

 

144.73cts



100.11cts



242.34cts

 

* The total column represents the IFRS figures and the result before BA movement is an Alternative Performance Measure ("APM") which reflects the Group's results before the movement in fair value of biological assets has been applied. We have opted to additionally disclose this APM as the BA movement is considered to be a fair value calculation which does not appropriately represent the Group's result for the year.

 

 

 

Condensed Consolidated Statement of Comprehensive Income

 

2022

2021

2021


6 months

6 months

Year


to 30 June

to 30 June

to 31 December


(unaudited)

(unaudited)

(audited)


$000

$000

$000

Profit for the period

68,466

45,805

82,920

Other comprehensive expenses:




Items may be reclassified to profit or loss:

 



Loss on exchange translation of foreign operations

(22,933)

(13,110)

(5,429)

Net other comprehensive expenses may be reclassified to profit or loss

(22,933)

(13,110)

(5,429)

Items not to be reclassified to profit or loss:

 



Remeasurement of retirement benefits plan, net of tax

-

-

1,086

Net other comprehensive income not being reclassified to profit or loss

-

-

1,086

Total other comprehensive expenses for the period, net of tax

(22,933)

(13,110)

(4,343)

Total comprehensive income for the period

45,533

32,695

78,577

Attributable to:

 



-  Owners of the parent

38,570

27,815

64,993

-  Non-controlling interests

6,963

4,880

13,584


45,533

32,695

78,577

 

 

 

Condensed Consolidated Statement of Financial Position


 





2022

2021

2021



as at 30 June

as at 30 June

as at 31 December



(unaudited)

(unaudited)

(audited)



$000

$000

$000

Non-current assets


 



Property, plant and equipment


259,545

275,177

260,532

Investment


49

-

49

Receivables


22,591

24,153

22,000

Deferred tax assets


1,674

14,730

4,324



283,859

314,060

286,905

Current assets


 



Inventories


41,012

15,038

14,316

Income tax receivables


4,766

10,034

5,072

Other tax receivables


52,054

34,717

45,423

Biological assets


7,133

12,443

12,803

Trade and other receivables


4,457

5,492

5,182

Short-term investments


59,495

1,539

1,439

Cash and cash equivalents


187,339

159,140

218,249



356,256

238,403

302,484

Assets in disposal groups classified as held for sale


13,000

-

13,210



369,256

238,403

315,694

Current liabilities


 



Trade and other payables


(40,175)

(27,223)

(32,533)

Income tax liabilities


(11,474)

(11,863)

(13,139)

Other tax liabilities


(566)

(1,171)

(1,615)

Dividend payables


(2,007)

(420)

(25)

Lease liabilities


(152)

(244)

(240)



(54,374)

(40,921)

(47,552)

Net current assets


314,882

197,482

268,142

Non-current liabilities


 



Deferred tax liabilities


(1,259)

(625)

(1,330)

Retirement benefits - net liabilities


(12,089)

(14,220)

(11,499)

Lease liabilities


(68)

(90)

(110)

 


(13,416)

(14,935)

(12,939)

Net assets


585,325

496,607

542,108

 


 



Issued capital and reserves attributable to owners of the parent


 



Share capital


15,504

15,504

15,504

Treasury shares


(1,171)

(1,171)

(1,171)

Share premium


23,935

23,935

23,935

Capital redemption reserve


1,087

1,087

1,087

Exchange reserves


(260,368)

(248,111)

(241,907)

Retained earnings


697,631

611,608

642,582

 


476,618

402,852

440,030

Non-controlling interests


108,707

93,755

102,078

Total equity


585,325

496,607

542,108

 

 

 

Condensed Consolidated Statement of Changes in Equity

 

Attributable to owners of the parent

 

 



 

Share

capital

 

Treasury

shares

 

Share

premium

Capital

redemption

reserve

 

 

Exchange

Reserves

 

Retained

earnings

 

 

Total

Non-controlling

interests

 

Total

equity

 

 

$000

$000

$000

$000

 

$000

$000

$000

$000

$000

 

 











 

Balance at 31 December 2020

15,504

(1,171)

23,935

1,087


(237,599)

573,677

375,433

88,875

464,308

 

Items of other comprehensive income:











 

-Remeasurement of retirement benefits plan, net of tax

-

-

-

-


-

960

960

126

1,086

 

-Loss on exchange translation of foreign operations

-

-

-

-


(4,308)

-

(4,308)

(1,121)

(5,429)

 

Total other comprehensive (expenses) / income

-

-

-

-


(4,308)

960

(3,348)

(995)

(4,343)

 

Profit for the year

-

-

-

-


-

68,341

68,341

14,579

82,920

 

Total comprehensive (expenses) / income for the year

-

-

-

-


(4,308)

69,301

64,993

13,584

78,577

 

Dividends paid

-

-

-

-


-

(396)

(396)

(381)

(777)

 

Balance at 31 December 2021

15,504

(1,171)

23,935

1,087

 

(241,907)

642,582

440,030

102,078

542,108

 

Items of other comprehensive income:

 

 

 

 

 

 

 

 

 

 

 

-Remeasurement of retirement benefits plan, net of tax

-

-

-

-

 

-

-

-

-

-

 

-Loss on exchange translation of foreign operations

-

-

-

-

 

(18,461)

-

(18,461)

(4,472)

(22,933)

 

Total other comprehensive (expenses) / income

-

-

-

-

 

(18,461)

-

(18,461)

(4,472)

(22,933)

 

Profit for the period

-

-

-

-

 

-

57,031

57,031

11,435

68,466

 

Total comprehensive (expenses) / income for the period

-

-

 

-

 

(18,461)

57,031

38,570

6,963

45,533

 

Dividends payable

-

-

-

-

 

-

(1,982)

(1,982)

(334)

(2,316)

 

Balance at 30 June 2022

15,504

(1,171)

23,935

1,087

 

(260,368)

697,631

476,618

108,707

585,325

 

 

 

 

Attributable to owners of the parent

 

 



 

Share

capital

 

Treasury

shares

 

Share

premium

Capital

redemption

reserve

 

 

Exchange

reserves

 

Retained

earnings

 

 

Total

Non-controlling

interests

 

Total

Equity

 

 

$000

$000

$000

$000

 

$000

$000

$000

$000

$000

 












 

Balance at 31 December 2020

15,504

(1,171)

23,935

1,087


(237,599)

573,677

375,433

88,875

464,308

 

Items of other comprehensive income:











 

-Loss on exchange translation of foreign operations

-

-

-

-


(10,512)

-

(10,512)

(2,598)

(13,110)

 

Total other comprehensive expenses

-

-

-

-


(10,512)

-

(10,512)

(2,598)

(13,110)

 

Profit for the period

-

-

-

-


-

38,327

38,327

7,478

45,805

 

Total comprehensive (expenses) / income for the period

-

-

-

-


(10,512)

38,327

27,815

4,880

32,695

 

Dividends payable

-

-

-

-


-

(396)

(396)

-

(396)

 

Balance at 30 June 2021 (after restatement)

15,504

(1,171)

23,935

1,087


(248,111)

611,608

402,852

93,755

496,607

 

 

 

 

 

 

 

 


 

Condensed Consolidated Statement of Cash Flows

 

2022

 

2021

2021


6 months

6 months

Year


to 30 June

to 30 June

to 31 December


(unaudited)

(unaudited)

(audited)


$000

$000

$000

Cash flows from operating activities

 



Profit before tax

89,534

60,232

137,083

Adjustments for:

 



Biological assets movement

5,314

(3,865)

(4,349)

(Gain) / Loss on disposal of property, plant and equipment

(49)

(1)

24

Depreciation

8,370

8,460

16,994

Retirement benefit provisions

1,100

1,222

103

Net finance income

(1,706)

(1,319)

(3,190)

Unrealised gain in foreign exchange

(311)

(298)

(212)

Property, plant and equipment written off

80

169

72

Reversal of impairment

(256)

(133)

(4,852)

Provision / (Reversal) for expected credit loss

6

1

(177)

Operating cash flows before changes in working capital

102,082

64,468

141,496

(Increase) in inventories

(27,157)

(2,579)

(2,649)

Decrease / (Increase) in non-current, trade and other receivables

584

(3,322)

(517)

Increase in trade and other payables

8,849

1,039

6,683

Cash inflows from operations

84,358

59,606

145,013

Retirement benefits paid

(137)

(132)

(487)

Overseas tax paid

(28,935)

(1,286)

(12,359)

Operating cash flows from continuing operations

55,286

58,188

132,167

Operating cash flows (used in) / from discontinued operations

(850)

2,884

(821)

Net cash flows from operating activities

54,436

61,072

131,346

Investing activities

 



Property, plant and equipment

 



-  purchases

(17,763)

(10,592)

(26,374)

-  sales

51

1

413

Interest received

1,714

1,331

3,214

Increase in receivables from cooperatives under plasma scheme

(1,395)

(2,032)

(1,985)

Investment in share equity

-

-

(49)

Placement of fixed deposits with original maturity of more than three months                                                                                                           

(59,495)

-

(1,439)

Withdrawal of fixed deposits with original maturity of more than three months

1,439

418

1,957

Cash used in investing activities from continuing operations

(75,449)

(10,874)

(24,263)

Cash used in investing activities from discontinued operations

(887)

(2,988)

(1,594)

Net cash used in investing activities

(76,336)

(13,862)

(25,857)

Financing activities

 



Dividends paid to the holders of the parent

-

-

(395)

Dividends paid to non-controlling interests

(334)

-

(381)

Repayment of lease liabilities - principal

(112)

(106)

(228)

Repayment of lease liabilities - interest

(8)

(12)

(24)

Cash used in financing activities from continuing operations

(454)

(118)

(1,028)

Cash used in financing activities from discontinued operations

-

-

-

Net cash used in financing activities

(454)

(118)

(1,028)

Net (decrease) / increase in cash and cash equivalents

(22,354)

47,092

104,461

Cash and cash equivalents

 



At beginning of period

218,249

115,211

115,211

Exchange losses

(8,556)

(3,163)

(1,423)

At end of period

187,339

159,140

218,249

Comprising:

 



Cash at end of period

187,339

159,140

218,249

 

 

 

Notes to the interim statements

 

1.        Basis of preparation of interim financial statements

 

These interim consolidated financial statements have been prepared in accordance with IAS 34, "Interim Financial Reporting". They do not include all disclosures that would otherwise be required in a complete set of financial statements and should be read in conjunction with the 2021 Annual Report. The financial information for the half years ended 30 June 2022 and 30 June 2021 does not constitute statutory accounts within the meaning of Section 434(3) of the Companies Act 2006 and has been neither audited nor reviewed pursuant to guidance issued by the Auditing Practices Board.

 

Basis of preparation

The annual financial statements of Anglo-Eastern Plantations Plc are prepared in accordance with UK adopted International Accounting Standards. The comparative financial information for the year ended 31 December 2021 included within this report does not constitute the full statutory accounts for that period. The statutory Annual Report and Financial Statements for 2021 have been filed with the Registrar of Companies. The Independent Auditors' Report on the Annual Report and Financial Statements for 2021 was unqualified, did not draw attention to any matters by way of emphasis, and did not contain a statement under Sections 498(2) or 498(3) of the Companies Act 2006.

 

The Directors have a reasonable expectation, having made the appropriate enquiries, that the Group has control of the monthly cashflows and that the Group has sufficient cash resources to cover the fixed cashflows for a period of at least 12 months from the date of approval of this interim report. For these reasons, the Directors adopted a going concern basis in the preparation of the interim report. The Directors have made this assessment after consideration of the Group's budgeted cash flows and related assumptions including appropriate stress testing of identified uncertainties, specifically on the potential shut down of the entire operations if all the plantations are infected with Coronavirus as well as the impact on the demand for palm oil due to the Coronavirus pandemic. Stress testing of other identified uncertainties was undertaken on primarily commodity prices and currency exchange rates.

 

Changes in accounting standards

The same accounting policies, presentation and methods of computation are followed in these condensed consolidated financial statements as were applied in the Group's latest annual audited financial statements.

 

2.        Foreign exchange


2022

2021

2021



6 months

6 months

Year



to 30 June

to 30 June

to 31December



(unaudited)

(unaudited)

(audited)



 



           Closing exchange rates


 



            Rp : $


14,848

14,496

14,269

           $ : £


1.21

1.38

1.35

           RM : $


4.41

4.15

4.17



 



            Average exchange rates


 



            Rp : $


14,445

14,298

14,312

           $ : £


1.30

1.39

1.38

           RM : $


4.27

4.10

4.15

 

3.        Prior year restatement

 

With effect from 31 December 2021 and applied retrospectively, the Group have opted for a change in accounting policy in respect of the treatment of land in the Group's financial statements which is accounted for in accordance with IAS 16 Property, Plant and Equipment. The Group has historically recognised land under the revaluation model however, following an analysis of the Group's peers in the UK, it was apparent that the majority reported their land at historical cost and therefore the decision was made to change the accounting policy to make the financial information more comparable and provide a more relevant result. Land has always been recognised in the local Indonesian financial statements at historical cost. The Group now recognises land at cost initially and is not depreciated except for the land in Malaysia as the possibility to renew the leasehold land in Malaysia is minimal.

 

The effects of the restatements are summarised as follows:

6 months to 30 June 2021

$000

 

Impact on consolidated income statement


 

Profit for the year before restatement

45,869

 

 

Effect of change in restatement:


 

Cost of sales

(64)


(64)

 

Profit for the year after restatement

45,805

 

The effect of the prior year adjustments had a negative impact on the earnings per share before BA of 0.08cts and anegativeimpact on the earnings per share after BA of0.09cts for the period to 30 June 2021.

 

6 months to 30 June 2021

$000

Impact on consolidated statement of comprehensive income

 

Other comprehensive expenses for the year before restatement

(15,893)

 

 

Effect of change in restatement:


 

 

Unrealised gain on revaluation of leasehold land, net of tax

1,014

 

 

Gain on exchange translation of foreign operations

1,769

 

 


2,783

 

 

Other comprehensive expenses for the year after restatement

(13,110)

 

 

The followingtable summarises the impact of this prior year restatement on the Consolidated Statement of Financial Position:

Balance as reported

30 June 2021

$000

 

 

Effect of restatement

$000

Restated balance at

30 June 2021

$000

Impact on consolidated statement of financial position




Property, plant and equipment

356,170

(80,993)

275,177

Deferred tax assets

9,317

5,413

14,730

Deferred tax liabilities

(14,659)

14,034

(625)

Revaluation reserves

48,465

(48,465)

-

Exchange reserves

(245,502)

(2,609)

(248,111)

Retained earnings

611,459

149

611,608

Non-controlling interests

104,376

(10,621)

93,755

 

The restatement of land from fair value to historical cost has decreased the value of the property, plant and equipment and eliminated the revaluation reserves. Deferred tax liabilities previously recognised on the revaluation of land have been reversed resulting in a decrease in deferred tax liabilities, but also an increase in deferred tax assets where individual entities have moved from a net deferred tax liability position to a net deferred tax asset position. Depreciation of the land in Malaysia recognised retrospectively and the reversal of the deferred tax liabilities previously recognised has resulted in a small increase in retained earnings. All entities for which these adjustments relate have non-controlling interests and therefore the impact on those non-controlling interests has also been recognised.

 

4.        Revenue

 

          Disaggregation of Revenue

The Group has disaggregated revenue into various categories in the following table which is intended to:

•    Depict how the nature, amount and uncertainty of revenue and cash flows are affected by timing of revenue recognition; and

•    Enable users to understand the relationship with revenue segment information provided in note 6.

 

There is no right of return and warranty provided to the customers on the sale of products and services rendered.

 

 

 

6 months to 30 June 2022

CPO, palm kernel and FFB

 

 

Rubber

Shell nut

Biomass products

Biogas products

 

 

Others

Total

 

$000

$000

$000

$000

$000

$000

$000

 








Contract counterparties








Government

-

-

-

-

540

-

540

Non-government

 - Wholesalers

 

245,456

 

280

 

2,605

 

24

 

-

 

324

 

248,689

 

245,456

280

2,605

24

540

324

249,229

 








Timing of transfer of goods








Delivery to customer premises

 

3,569

 

280

 

-

 

-

 

-

 

-

 

3,849

Delivery to port of departure

-

-

-

24

-

-

24

Customer collect from our mills / estates

 

241,887

 

-

 

2,605

 

-

 

-

 

-

 

244,492

Upon generation / others

-

-

-

-

540

324

864


245,456

280

2,605

24

540

324

249,229

















 

 

6 months to 30 June 2021

CPO, palm kernel and FFB

 

 

Rubber

Shell nut

Biomass products

Biogas products

 

 

Others

Total


$000

$000

$000

$000

$000

$000

$000









Contract counterparties








Government

-

-

-

-

423

-

423

Non-government

- Wholesalers

 

194,213

 

356

 

2,187

 

218

 

-

 

281

 

197,255


194,213

356

2,187

218

423

281

197,678

 








Timing of transfer of goods








Delivery to customer premises

2,304

356

-

-

-

-

2,660

Delivery to port of departure

-

-

-

218

-

-

218

Customer collect from our mills / estates

 

191,909

 

-

 

2,187

 

-

 

-

 

-

 

194,096

Upon generation / others

-

-

-

-

423

281

704


194,213

356

2,187

218

423

281

197,678

















 

 

Year to 31 December 2021

CPO, palm kernel and FFB

 

 

Rubber

Shell nut

Biomass products

Biogas products

 

 

Others

Total


$000

$000

$000

$000

$000

$000

$000









Contract counterparties








Government

-

-

-

-

999

-

999

Non-government

 - Wholesalers

 

426,436

 

695

 

4,036

 

336

 

-

 

919

 

432,422


426,436

695

4,036

336

999

919

433,421









Timing of transfer of goods








Delivery to customer premises

4,995

695

-

-

-

-

5,690

Delivery to port of departure

-

-

-

336

-

-

336

Customer collect from our mills / estates

 

421,441

 

-

 

4,036

 

-

 

-

 

-

 

425,477

Upon generation / others

-

-

-

-

999

919

1,918


426,436

695

4,036

336

999

919

433,421

 

5.        Finance income and expense


2022

2021

2021



6 months

6 months

Year



to 30 June

to 30 June

to 31December



(unaudited)

(unaudited)

(audited)



$000

$000

$000



 



          Finance income


 



          Interest receivable on:


 



          Credit bank balances and time deposits


1,714

1,331

3,214



 



          Finance expense


 



           Interest payable on:


 



           Interest expense on lease liabilities


(8)

(12)

(24)

           


(8)

(12)

(24)



 



Net finance income recognized in income statement


1,706

1,319

3,190

 


 

6.         Segment information

 

North

Sumatera

Bengkulu

Riau

Bangka

Kalimantan

Total Indonesia

Malaysia

UK

Total

South* Sumatera


$000

$000

$000

$000

$000

$000

$000

$000

$000

$000

6 months to 30 June 2022 (unaudited)

 

 

 

 

 

 

 

 

 

Total sales revenue (all external)

 

 

 

 

 

 

 

 

 

 

-    CPO, palm kernel and FFB

82,911

70,778

42,666

1,662

45,875

243,892

1,564

-

245,456

5,290

-    Rubber

280

-

-

-

-

280

-

-

280

-

-    Shell nut

1,017

614

909

-

65

2,605

-

-

2,605

-

-    Biomass products

24

-

-

-

-

24

-

-

24

-

-    Biogas products

149

241

-

-

150

540

-

-

540

-

-    Others

110

49

36

20

106

321

3

-

324

63

     Total revenue

84,491

71,682

43,611

1,682

46,196

247,662

1,567

-

249,229

5,353


 

 

 

 

 

 

 

 

 

 

     Profit / (loss) before tax

35,009

23,688

14,233

484

22,156

95,570

(87)

(635)

94,848

401

     BA movement

(1,523)

(1,176)

(872)

(114)

(1,645)

(5,330)

16

-

(5,314)

(96)

     Profit / (loss) for the period before tax per consolidated income statement

33,486

22,512

13,361

370

20,511

90,240

(71)

(635)

89,534

305



 

 

 


 


 



     Interest income

1,180

429

85

-

17

1,711

3

-

1,714

2

     Interest expense

(4)

-

-

-

-

(4)

(4)

-

(8)

-

     Depreciation

(2,669)

(1,969)

(411)

(196)

(2,963)

(8,208)

(162)

-

(8,370)

-

     Reversal of impairment

-

-

-

-

622

622

-

-

622

-

     Impairment losses

-

-

-

-

-

-

(366)

-

(366)

-

     (Provision) / Reversal of expected credit loss

(10)

(1)

-

1

2

(8)

-

2

(6)

(9)

     Inter-segment transactions

2,503

(988)

(283)

(149)

(1,004)

79

299

10

388

(388)

     Inter-segmental revenue

25,434

580

-

-

5,527

31,541

-

-

31,541

4,608

     Tax expense

(8,617)

(4,864)

(2,873)

(52)

(3,998)

(20,404)

(119)

(173)

(20,696)

339


 

 

 

 

 

 

 

 

 

 

     Total assets

273,345

135,559

42,725

17,045

151,209

619,883

12,735

6,613

639,231

13,884

     Property, plant and equipment

81,387

41,272

8,206

14,938

105,917

251,720

7,825

-

259,545

4,726

     Non-current assets - additions

10,146

2,897

201

773

3,707

17,724

39

-

17,763

367












* South Sumatera represents the operations which have been discontinued and have therefore been separated from the continuing operations.

 

North

Sumatera

Bengkulu

Riau

Bangka

Kalimantan

Total Indonesia

Malaysia

UK

Total

South* Sumatera


$000

$000

$000

$000

$000

$000

$000

$000

$000

$000

6 months to 30 June 2021 (unaudited)










Total sales revenue (all external)











-    CPO, palm kernel and FFB

57,451

66,910

31,239

925

36,442

192,967

1,246

-

194,213

3,339

-    Rubber

356

-

-

-

-

356

-

-

356

-

-    Shell nut

663

648

746

-

130

2,187

-

-

2,187

-

-    Biomass products

218

-

-

-

-

218

-

-

218

-

-    Biogas products

-

220

-

-

203

423

-

-

423

-

-    Others

45

48

21

11

143

268

13

-

281

88

     Total revenue

58,733

67,826

32,006

936

36,918

196,419

1,259

-

197,678

3,427












     Profit / (loss) before tax

16,480

16,640

8,441

131

15,503

57,195

(232)

(596)

56,367

(2,198)

     BA movement

1,550

770

206

54

1,132

3,712

153

-

3,865

86

     Profit / (loss) for the period before tax per consolidated income statement

18,030

17,410

8,647

185

16,635

60,907

(79)

(596)

60,232

(2,112)












     Interest income

969

297

52

-

10

1,328

3

-

1,331

2

     Interest expense

(9)

-

-

-

-

(9)

(3)

-

(12)

-

     Depreciation

(2,601)

(2,075)

(452)

(172)

(2,829)

(8,129)

(331)

-

(8,460)

(982)

     Reversal of impairment

-

-

-

-

133

133

-

-

133

-

     Impairment losses

-

-

-

-

-

-

-

-

-

(79)

     (Provision) / Reversal of expected credit loss

-

(1)

-

-

(1)

(2)

-

1

(1)

1

     Inter-segment transactions

2,549

(1,002)

(288)

(141)

(968)

150

218

10

378

(378)

     Inter-segmental revenue

18,561

637

-

-

4,075

23,273

-

-

23,273

3,140

     Tax expense

(4,484)

(3,402)

(1,800)

(17)

(3,153)

(12,856)

(127)

(1)

(12,984)

670












     Total assets

213,172

97,145

28,481

16,227

138,868

493,893

13,746

6,846

514,485

37,978

     Property, plant and equipment

73,013

41,130

8,875

14,245

102,175

239,438

9,137

-

248,575

26,602

     Non-current assets - additions

2,683

2,285

391

930

3,949

10,238

370

-

10,608

1,308












 

* South Sumatera represents the operations which have been discontinued and have therefore been separated from the continuing operations.

 

North

Sumatera

Bengkulu

Riau

Bangka

Kalimantan

Total Indonesia

Malaysia

UK

Total

South* Sumatera

 


$000

$000

$000

$000

$000

$000

$000

$000

$000

$000

 

Year to 31 December 2021 (audited)









 

Total sales revenue (all external)











 

-    CPO, palm kernel and FFB

127,216

141,070

73,827

2,178

79,470

423,761

2,675

-

426,436

7,999

-    Rubber

695

-

-

-

-

695

-

-

695

-

-    Shell nut

1,173

1,191

1,440

-

232

4,036

-

-

4,036

-

-    Biomass products

336

-

-

-

-

336

-

-

336

-

-    Biogas products

114

485

-

-

400

999

-

-

999

-

-    Others

93

20

89

16

583

801

27

91

919

270

     Total revenue

129,627

142,766

75,356

2,194

80,685

430,628

2,702

91

433,421

8,269












     Profit / (loss) before tax

40,160

35,769

20,555

553

37,539

134,576

(517)

(1,325)

132,734

(4,786)

     BA movement

1,660

700

574

111

1,273

4,318

31

-

4,349

64

     Profit / (loss) for the year before tax per consolidated income statement

 

41,820

 

36,469

 

21,129

 

664

 

38,812

 

138,894

 

(486)

 

(1,325)

137,083

 

(4,722)












     Interest income

2,323

720

133

1

22

3,199

15

-

3,214

5

     Interest expense

(15)

-

-

-

-

(15)

(9)

-

(24)

-

     Depreciation

(5,270)

(4,132)

(905)

(356)

(5,660)

(16,323)

(671)

-

(16,994)

(1,978)

     Reversal of impairment

-

-

-

-

5,437

5,437

-

-

5,437

-

     Impairment losses

-

-

-

-

(452)

(452)

(133)

-

(585)

(716)

     (Provision) / Reversal for expected credit loss

 

(4)

 

-

 

-

 

-

 

180

 

176

 

-

 

1

177

 

(1,231)

     Inter-segment transactions

902

(2,001)

(11,754)

(282)

(1,934)

(15,069)

476

74

(14,519)

14,519

     Inter-segmental revenue

42,566

2,641

-

-

9,431

54,638

-

-

54,638

7,438

     Tax expense

(8,939)

(7,831)

(2,153)

(109)

(6,379)

(25,411)

(112)

(219)

(25,742)

(1,927)












     Total assets

252,633

117,748

34,580

17,095

145,578

567,634

13,758

7,152

588,544

14,055

     Property, plant and equipment

77,170

42,027

8,751

14,960

108,844

251,752

8,780

-

260,532

5,653

     Non-current assets - additions

8,490

4,727

608

1,600

7,072

22,497

517

-

23,014

3,424

 

* South Sumatera represents the operations which have been discontinued and have therefore been separated from the continuing operations.

 

In the 6 months to 30 June 2022, revenue from 4 customers of the Indonesian segment represent approximately $156.8m (H1 2021: $112.6m) of the Group's total revenue. In the year 2021, revenue from 4 customers of the Indonesian segment represent approximately $266.3m of the Group's total revenue. An analysis of this revenue is provided below. Although Customers 1 to 2 each contribute over 10% of the Group's total revenue, there was no over reliance on these Customers as tenders were performed on a weekly basis. Three of the top four customers were the same as in the year to 31 December 2021.

2022

2021

2021


6 months

6 months

Year


to 30 June

to 30 June

to 31 December


(unaudited)

(unaudited)

(audited)


$m

%

$m

%

$m

%

Major Customers

 

 

 

 

 

 

Customer 1

89.7

36.0

53.7

27.2

120.9

27.8

Customer 2

31.0

12.4

23.5

11.9

50.8

11.8

Customer 3

18.5

7.4

18.4

9.3

48.3

11.2

Customer 4

17.6

7.0

17.0

8.6

46.3

10.7

Total

156.8

62.8

112.6

57.0

266.3

61.5


7.        Tax expense

2022

2021

2021


6 months

6 months

Year


to 30 June

to 30 June

to 31 December


(unaudited)

(unaudited)

(audited)


$000

$000

$000


 



Foreign corporation tax - current year

18,224

13,194

20,404

Foreign corporation tax - prior year

(57)

-

258

Deferred tax adjustment - origination and reversal of temporary differences

2,529

(212)

 

 

5,080

Recognition of previously unrecognised deferred tax assets

-

-

 

-

 

20,696

12,982

25,742

 

Corporation tax rate in Indonesia is at 22% (H1 2021: 22%, 2021: 22%) whereas Malaysia is at 24% (H1 2021: 24%, 2021: 24%). The standard rate of corporation tax in the UK for the current year is 19% (H1 2021: 19%, 2021: 19%). 

 

8.        Dividend

          

The final and only dividend in respect of 2021, amounting to 5.0 cents per share, or $1,981,819 was paid on 15 July 2022 (2020: 1.0 cents per share, or $396,364, paid on 16 July 2021). As in previous years, no interim dividend has been declared.

 

9.        Earnings per ordinary share ("EPS")

2022

2021

2021


6 months

6 months

Year


to 30 June

to 30 June

to 31 December


(unaudited)

(unaudited)

(audited)


$000

$000

$000

Total operations

 



Profit for the period attributable to owners of the Company before BA movement

60,582

35,746

65,485

BA movement

(3,551)

2,581

2,856

Earnings used in basic and diluted EPS

57,031

38,327

68,341

 

 



Continuing operations

 



Profit for the period attributable to owners of the Company before BA movement

60,845

37,163

93,245

BA movement

(3,480)

2,517

2,809

Earnings used in basic and diluted EPS

57,365

39,680

96,054

 

 



Discontinued operations

 



Profit for the period attributable to owners of the Company before BA movement

(263)

(1,417)

(27,760)

BA movement

(71)

64

47

Earnings used in basic and diluted EPS

(334)

(1,353)

(27,713)


 




Number

Number

Number


'000

'000

'000

Weighted average number of shares in issue in the period

 



  -  used in basic EPS

39,636

39,636

39,636

  -  dilutive effect of outstanding share options

-

-

 

-

  -  used in diluted EPS

39,636

39,636

39,636


 



Total operations

 



    - Basic and diluted EPS before BA movement

152.85cts

90.19cts

165.22cts

 - Basic and diluted EPS after BA movement

143.89cts

96.70cts

172.42cts


 



Continuing operations

 



    - Basic and diluted EPS before BA movement

153.51cts

93.76cts

235.25cts

 - Basic and diluted EPS after BA movement

144.73cts

100.11cts

242.34cts


 



Discontinued operations

 



    - Basic and diluted EPS before BA movement

(0.66)cts

(3.58)cts

(70.04)cts

 - Basic and diluted EPS after BA movement

(0.84)cts

(3.41)cts

(69.92)cts

 

10.      Fair value measurement of financial instruments

           

The carrying amounts andfair values of the financial instruments which are not recognised at fair value in the Statement of Financial Position are exhibited below: 

 

2022

2021

2021

 


6 months

6 months

Year

 


to 30 June

to 30 June

to 31 December

 


(unaudited)

(unaudited)

(audited)

 


Carrying amount

Fair value

Carrying amount

Fair value

Carrying amount

Fair value

 


$000

$000

$000

$000

$000

$000

 

 

 

 





 

Non-current receivables

 

 





 

Due from non-controlling interests

5,345

3,016

5,413

3,032

5,459

3,042

 

Due from cooperatives under Plasma scheme

17,246

12,373

18,740

17,061

19,879

13,122

 


22,591

15,389

24,153

20,093

25,338

16,164

 

Transfer to assets held for sale

 

-

 

-

 

-

 

-

 

(3,338)

 

(2,079)

 


22,591

15,389

24,153

20,093

22,000

14,085

 


 

 





Financial instruments not measured at fair value include cash and cash equivalents, trade and other receivables, trade and other payables, and borrowings due within one year.

 

Due to their short-term nature, the carrying value of cash and cash equivalents, trade and other receivables, trade and other payables and borrowings due within one year approximates their fair value.

 

All non-current assets, non-current receivables and long-term loan are classified as Level 3 in the fair value hierarchy.

 

The valuation techniques and significant unobservable inputs used in determining the fair value measurement of non-current receivables and borrowings due after one year, as well as the inter-relationship between key unobservable inputs and fair value, are set out in the table below:

 

Item

Valuation approach

Inputs used

Inter-relationship between key unobservable inputs and fair value

 

 

Non-current receivables

Due from non-controlling interests

Based on cash flows discounted using current lending rate of 6% (H1 2021 and 2021: 6%).

 

Discount rate

The higher the discount rate, the lower the fair value.

 

Due from cooperatives under Plasma scheme

Based on cash flows discounted using an estimated current lending rate of 7.00% (H1 2021: 6.75%, 2021: 7.00%).

 

Discount rate

The higher the discount rate, the lower the fair value.

 

11.      Report and financial information

 

Copies of the interim report for the Group for the period ended 30 June 2022 are available on the AEP website at https://www.angloeastern.co.uk/.

 

 

 

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