RNS Number:8339J
Anglo-Eastern Plantations PLC
10 April 2003
10 April 2003
ANGLO-EASTERN PLANTATIONS PLC - PRELIMINARY ANNOUNCEMENT
* Anglo-Eastern Plantations, which owns over 23,000 ha of oil palm
plantations, primarily in Indonesia, announces a 243% increase in pre-tax profit
to #8.0m in the year ended 31 December 2002.
2002 2001 Change
Turnover (#000) 20,622 11,800 75%
Operating profit (#000) 8,455 2,340 261%
Pre-tax profit (#000) 8,008 2,333 243%
Earnings per share (p) 10.9 3.6 203%
Dividend per share (p) 2.58 1.40 84%
Net assets per share (p) 128 141 -9%
* The profit increase reflects mainly a strong crude palm oil price
after three years of falling or weak prices (an average for 2002 of $400/mt
compared to $281/mt in 2001), but is also supported by increasing production
from the Bengkulu project in South Sumatra which is now coming to maturity and
was the principal contributor to a 16% increase in group FFB (fresh fruit
bunches) production.
* The 40 mt/hr mill at Bengkulu was commissioned on schedule in April
2002 and it is planned that the mill will be expanded to a capacity of 60 mt/hr
in 2004/5.
* The Indonesian operations continue to operate with no unusual
interruption.
* Group crops for the first quarter of 2003 have been above
expectations and are 35% ahead of the same period in 2002. The CPO (crude palm
oil) price settled at $450/mt in January and February 2003 but has since eased
to $415/mt.
Mr T H Chan, chairman, commented "If volumes continue ahead of 2002 and the
average CPO price remains ahead of that for 2002 then, barring any material
adverse factors, we can expect another increase in profit for 2003. Having
regard to the satisfactory results and to the increasing production from the
Bengkulu estates the board is proposing to double the dividend in respect of
2002 to 4.0 cts per share, or an 84% increase in sterling terms to 2.58p."
Enquiries:
Anglo-Eastern Plantations plc 020-7236 2838
Rollo Barnes (Financial Director)
Bankside Consultants Limited 020-7444 4166
Charles Ponsonby
CHAIRMAN'S STATEMENT
I am pleased to report that in 2002 the group achieved a turnover of $31.1
million and profit before tax of $12.1 million. The previous year's turnover and
profit were $17.0 million and $3.4 million respectively.
The increase reflects mainly a strong palm oil price after three years of
falling or weak prices, but is also supported by increasing production from our
Bengkulu project in South Sumatra which is now coming to maturity and was the
principal contributor to a 16% increase in group FFB (fresh fruit bunches)
production. There was also an exchange gain of $0.8 million arising on our long
term borrowings compared to a loss of $0.2 million in the previous year. Against
these positives there were significant increases in operating costs following an
industry wide 36% increase in wages as well as a reduction in fuel subsidies in
Indonesia from January 2002. The results for 2001 included an exceptional
provision of $1.5 million against the value of our Malaysian estates.
The effective tax rate of 36.5% compares to 48.8% in 2001, which was unusually
high because of the disallowable provision in 2001 referred to above. After a
charge for minority interests of $1.3 million (2001: credit of $0.3 million)
profit for the year attributable to shareholders was $6.5 million (2001: $2.0
million).
Earnings per share were 16.5 cts (10.9p) compared to 5.2 cts (3.6p) in 2001.
Group net assets per share at the year end amounted to 207 cts, largely
unchanged from the previous year because of exchange effects.
In line with its major capital expenditure programme, the group completed draw
down of its long term development loan facilities during 2002 bringing the total
borrowings outstanding to $10.1 million. Against this, the group's cash balances
stood at $8.4 million at the year end.
Commodity prices
The CPO (crude palm oil) price began to improve from March 2002 after reaching a
low of $215/mt (cif Rotterdam) in May 2001, the lowest level for 15 years. The
average price for 2002 was $400/mt, compared to $281/mt in 2001. At the end of
2002 the price was $465/mt.
Prices for the other two crops produced by the group also recorded strong
increases in 2002. Average prices for rubber were around 27% higher and for
cocoa, which reached a 15 year peak, 56% higher. These two crops contributed
about 6% of group profits in 2002.
Indonesia
FFB production from our main estate, Tasik, and from Anak Tasik in North Sumatra
was 149,000 mt, down 3,000 mt from the previous year. Although this was the
second consecutive year of decline in output, the cause was probably weather
rather than the age of the plantings.
By contrast, FFB crops from our other three smaller estates in North Sumatra
registered an increase of 22% to an all time record of 51,000 mt. Cocoa and
rubber crops at these estates also improved.
New planting in Bengkulu was scaled down to 350 ha in 2002 while we concentrated
on improving infrastructure and consolidating the areas already planted. Total
area planted there now is 9,600 ha, of which 2,100 ha are still immature. FFB
production at Bengkulu was 62,000 mt compared to 30,000 mt in 2001.
The 40mt/hr mill at Bengkulu was commissioned on schedule in April 2002. In the
eight months of its operation, the mill was able to run at satisfactory
throughput as a result of processing bought-in crop of 28,000 mt as well as
52,000mt of our own. However, this high proportion of bought in crop affected
the extraction rate. It is planned that the mill will be expanded to a capacity
of 60mt/hr in 2004/5, which will allow us to handle all the crops from Bengkulu
for the next five years.
Definitive land titles were finally obtained over all the Bengkulu areas which
we have planted, or will plant, in the next three or four years. We have rights
over another 5,000 ha of vacant land and will apply for the relevant papers in
the light of prevalent conditions at the appropriate time.
I am pleased to report that the Indonesian operations continue to operate with
no unusual interruption. Our local management and staff continue to pay
particular attention to good relations with local authorities and local
residents.
Malaysia
Our Malaysian estates experienced an exceptionally dry spell in early 2002 which
affected production. Although the FFB crop of 32,000 mt was an improvement of
11% over the previous year, it was below our expectations.
At present prices, the estates are just self-funding, including loan repayments.
The operation made a loss, at the pre-tax level, of $190,000 in 2002 compared to
a loss of $490,000 in the previous year. However, low yields remain a concern.
We have recently strengthened local management and hope that new approaches to
field husbandry, in what is hilly terrain, will accelerate the move to
profitability.
Outlook and dividend
Group crops for the first quarter of 2003 have been above expectations and are
35% ahead of the same period in 2002. However, it is difficult to predict
whether this improvement will continue for the rest of the year.
The CPO price settled at $450/mt in January and February but has since fallen to
$415/mt. Rubber and cocoa prices are around 15% better than last year's averages
and production is at a similar level to that in the same period in 2002.
Competition for bought in crop at Bengkulu and Tasik is expected to increase
with new mill capacities coming on stream in both regions, so contribution from
this source is expected to be lower in the current year.
The group's cash position has continued to improve but significant capital
expenditure in Bengkulu remains and repayment of our long term loans commenced
this year. In addition, we are considering building a small oil mill for our
Medan estates which is expected to cost nearly $3 million.
If volumes continue ahead of 2002 and the average CPO price remains ahead of
that for 2002 then, barring any material adverse factors, we can expect another
increase in profit for 2003. Having regard to the satisfactory results and to
the increasing production from the Bengkulu estates the board is proposing to
double the dividend in respect of 2002 to 4.0 cts, per share, or an 84% increase
in sterling terms to 2.58p.
CHAN TEIK HUAT
9 April 2003 Chairman
CONSOLIDATED PROFIT AND LOSS ACCOUNT
2002 2001 2002 2001
US$'000 US$'000 #'000 #'000
Unaudited Audited Unaudited Audited
Turnover - continuing 31,139 16,992 20,622 11,800
operations ======== ======== ======== ========
Operating profit - 12,767 3,369 8,455 2,340
continuing operations
Net interest (payable) (675) (10) (447) (7)
-------- -------- -------- --------
Profit on ordinary 12,092 3,359 8,008 2,333
activities before tax
Taxation (4,367) (1,638) (2,892) (1,138)
-------- -------- -------- --------
Profit on ordinary 7,725 1,721 5,116 1,195
activities after tax
Minority interests (all (1,250) 320 (828) 222
equity interests) -------- -------- -------- --------
Profit attributable to 6,475 2,041 4,288 1,417
shareholders
Dividends (1,571) (785) (1,040) (545)
-------- -------- -------- --------
Retained profit for the 4,904 1,256 3,248 872
year
Earnings per ordinary
share
- basic 16.5cts 5.2cts 10.9p 3.6p
- diluted 16.4cts 5.2cts 10.9p 3.6p
2002 2001 2002 2001
Operating profit is stated US$'000 US$'000 #'000 #'000
after charging: -------- -------- -------- --------
Provision for reduction in
value of
Malaysian estates - (1,553) - (1,078)
Exchange profit/(losses) 828 (188) 548 (131)
-------- -------- -------- --------
828 (1,741) 548 (1,209)
-------- -------- -------- --------
TAXATION: 2002 2001 2002 2001
US$'000 US$'000 #'000 #'000
Foreign corporation tax 4,170 2,443 2,762 1,698
Foreign withholding tax on 372 97 246 67
remittances
Deferred tax adjustment (175) (472) (116) (328)
- current year
- prior years - (430) - (299)
-------- -------- -------- --------
4,367 1,638 2,892 1,138
======== ======== ======== ========
DIVIDEND: The board have proposed a final and only dividend for 2002 of 4.00cts
(2001 - 2.00cts) to be paid on 18 June 2003 to shareholders on the register on
23 May 2003. Shareholders electing to receive their dividend in sterling will
receive 2.58p (2001 - 1.40p).
ACCOUNTS: The financial information contained in this announcement does not
constitute statutory financial statements within the meaning of section 240 of
the Companies Act 1985. Statutory accounts for the previous financial year ended
31 December 2001 have been delivered to the Registrar of Companies. The
auditors' report on those accounts was unqualified and did not contain any
statement under section 237(2) or (3) of the Companies Act 1985. The auditors
have not yet reported on the accounts for the year ended 31 December 2002, nor
have any such accounts been delivered to the Registrar of Companies. Accounting
policies remain unchanged from the previous year. This preliminary announcement
was approved by the board on 9 April 2003.
CONSOLIDATED BALANCE SHEET
2002 2001 2002 2001
US$'000 US$'000 #'000 #'000
Unaudited Audited Unaudited Audited
Fixed assets
Tangible assets 103,558 104,333 64,322 71,461
-------- -------- -------- --------
Current assets
Stocks 928 600 576 411
Debtors 2,001 1,916 1,243 1,312
Investments 234 266 145 182
Cash 8,416 2,248 5,227 1,540
-------- -------- -------- --------
11,579 5,030 7,191 3,445
======== ======== ======== ========
Current liabilities
Creditors: falling due within one
year
Borrowings (2,040) (99) (1,267) (68)
Other creditors (7,717) (5,266) (4,793) (3,607)
-------- -------- -------- --------
(9,757) (5,365) (6,060) (3,675)
======== ======== ======== ========
Net current assets/ 1,822 (335) 1,131 (230)
(liabilities) -------- -------- -------- --------
Total assets less current 105,380 103,998 65,453 71,231
liabilities
Non-current liabilities
Creditors: falling due after more
than one year
Borrowings (8,085) (6,460) (5,022) (4,425)
Deferred taxation 1,215 890 755 610
-------- -------- -------- --------
Net assets 98,510 98,428 61,186 67,416
======== ======== ======== ========
Share capital 15,171 15,171 9,808 9,808
Share premium 23,570 23,570 15,329 15,329
Share capital redemption 1,087 1,087 663 663
reserve
Revaluation and exchange 6,586 10,986 3,028 9,004
reserve
Profit and loss account 34,719 29,815 21,565 20,421
-------- -------- -------- --------
Shareholders' funds 81,133 80,629 50,393 55,225
Minority interests 17,377 17,799 10,793 12,191
-------- -------- -------- --------
98,510 98,428 61,186 67,416
======== ======== ======== ========
CONSOLIDATED STATEMENT OF RECOGNISED GAINS AND LOSSES
2002 2001
US$000 US$000
Unaudited Audited
Profit for the financial 6,475 2,041
year
Unrealised surplus on
revaluation of the
estates
(15,375) 7,292
Profit/(loss) on exchange 10,975 (4,820)
translation -------- --------
Total recognised gains 2,075 4,513
relating to the year -------- --------
RECONCILIATION OF MOVEMENT IN SHAREHOLDERS' FUNDS
2001 2001
US$000 US$000
Unaudited Audited
Total recognised gains 2,075 4,513
Dividends (1,571) (785)
-------- --------
Net increase in 504 3,728
shareholders' funds
Beginning of year 80,629 76,901
-------- --------
End of year 81,133 80,629
-------- --------
CONSOLIDATED CASH FLOW statement
2002 2001 2002 2001
US$000 US$000 #000 #000
Unaudited Audited Unaudited Audited
Net cash inflow from 13,691 6,666 8,670 4,647
operating
activities
Returns on investment
and servicing of
finance
(1,158) (320) (767) (222)
Tax paid net of (2,424) (2,513) (1,605) (1,745)
refunds
Capital expenditure (6,722) (7,804) (4,452) (5,420)
-------- -------- -------- --------
Equity dividends
paid
- parent company (785) (588) (520) (408)
-------- -------- -------- --------
Cash outflow 2,602 (4,559) 1,326 (3,148)
financing
Financing
-------- -------- -------- --------
Drawdown of long term 3,663 5,080 2,427 3,528
loans
Finance lease (29) (29) (19) 20
repayments -------- -------- -------- --------
3,634 5,051 2,408 3,508
-------- -------- -------- --------
Increase in cash in 6,236 492 3,734 360
the year ======== ======== ======== ========
EXCHANGE RATES ($ : #)
2002 2001
Year end 1.61 1.46
Average 1.51 1.44
WEIGHTED AVERAGE
NUMBER OF SHARES IN
ISSUE
Basic 39,226,922 39,226,922
Diluted 39,440,025 39,226,922
CROPS
2002 2001
Tonnes Tonnes
Oil palm fresh fruit
bunches
-ex estates 294,062 252,632
-bought in 99,029 74,789
Crude palm oil 63,240 52,073
Rubber 1,491 1,376
Cocoa 193 120
AREAS
Total Mature Immature
Ha Ha Ha
Oil palm 22,724 19,335 3,389
Rubber 843 843 -
Cocoa 258 197 61
-------- -------- --------
23,825 20,375 3,450
-------- --------
Reserves 10,859
Further title to be 5,397
issued --------
Total 40,081
========
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