Final Results
Anglo-Eastern Plantations PLC
24 March 2004
ANGLO-EASTERN PLANTATIONS PLC - PRELIMINARY ANNOUNCEMENT
Record result, good prospects
• Anglo-Eastern Plantations, which owns approximately 30,000 ha of
plantations, primarily in Indonesia, announces that group pre-tax profit for
2003 was easily a record at US$ 19.6m on the back of record palm oil output and
strong commodity prices during most of the year.
2003 2002 Increase
Turnover ($000) 48,519 31,139 55.8%
Operating profit ($000) 19,994 12,767 56.7%
Pre-tax profit ($000) 19,587 12,092 62.0%
Basic earnings per share (cts) 28.6 16.5 73.3%
Dividend per share (cts) 6.0 4.0 50.0%
• In sterling terms, the pre-tax profit was £11.9m, up 48.7% on 2002's
£8.0m, whilst basic EPS was 59.6% higher at 17.4p (2002: 10.9p).
• Opening net debt of $1.7m was transformed into net cash of $7.0m.
• The average CPO (crude palm oil) price of 2003 was $441/mt compared to
$400/mt in 2002.
• Output of palm oil FFB (fresh fruit bunches) totalled 372,000mt, 27%
up from 2002's 294,000mt.
• Bought in FFB, for processing at the group's mills at Puding Mas
(Bengkulu) and Tasik, increased by 67% to 171,000mt, making a useful
contribution to group profits.
• Last week's $10m acquisition of the Bina Pitri estate in central
Sumatra takes the group's total planted area to 30,000ha, which compares with an
objective of 50,000ha.
• Mr T H Chan, Chairman, stated 'The group's FFB crops for the first two
months of 2004 were on target and slightly ahead of the same period in 2003.
About 980 ha of new plantings in Bengkulu are expected to be brought into
production during the year. CPO prices have been favourable and strengthened
since the year end to $540/mt. If this price remains for the rest of the year,
we can reasonably expect another successful and satisfactory year for 2004.'
Enquiries:
Anglo-Eastern Plantations Plc 020-7236 2838
Rollo Barnes (Financial Director)
Bankside Consultants Limited
Charles Ponsonby 020-7444 4166 /
07789-202 312
CHAIRMAN'S STATEMENT
I am pleased to announce record results and good prospects.
Financial review
Group profit before tax for 2003 was a record at US$19.6 million on the back of
record palm oil output and strong commodity prices throughout most of the year.
The previous record profit was $14.3 million reported for 1995.
Profit before tax for 2003 was a 62% increase over that of $12.1 million for
2002. Earnings per share (EPS) increased by 73% from 16.5cts to 28.6cts. The
greater improvement in EPS relative to pre-tax profit reflects a slightly lower
rate of tax charge. This was caused in the main by improved results from
Malaysian operations where previous high local operating losses could not be
offset against other taxable profits in the group.
The results would have been higher but for the weakness of the dollar in
relation to the Indonesian rupiah, in which most of the costs and expenses of
the group are incurred. The strength of sterling also resulted in a smaller EPS
increase of 60% in sterling terms.
The relative weakness of the dollar also had a small impact on the group's net
asset value. In dollar terms, net asset value at the year end was 225cts as
compared to 207cts at the beginning of the year. In sterling terms, net asset
value decreased from 128p to 126p.
The strong profit translated into strong cash flow. Group cash balances
increased from $8.4 million to $15.1 million, after capital expenditure of $5.7
million and $2.0 million term loan servicing. The group's long term loans
reduced from $10.1 million to $8.1 million. Accordingly, net debt of $1.7
million was transformed into net cash of $7.0 million.
Commodity prices
CPO prices, which were $450/mt (cif Rotterdam) at the beginning of the year,
weakened to $415/mt by June. Prices recovered in the second half and ended the
year at $450/mt. Reasons for the price movement are complicated but in this case
a lower than expected US soya crop in 2004 appeared to be a major factor. The
average CPO price for 2003 was $441/mt compared to $400/mt in the previous year.
Rubber prices reached a peak in 2003 which was the highest level for seven
years. Our rubber production therefore made a small but useful contribution of
$1.1 million in 2003. Cocoa prices fell during 2003 from a 15 year high but
still remain at historically high levels, enabling a profit contribution of $0.2
million. Contribution from these commodities will lessen relative to oil palm in
the future as the group increases its oil palm plantings.
Indonesia
Fresh fruit bunch (FFB) crop output at the Tasik and Anak Tasik estates in 2003
was the second highest ever at 172,000mt, compared to the peak of 175,000mt
recorded in 2000. While we cannot expect these levels to continue in the coming
years, this is a most encouraging performance, particularly from Tasik which has
a large proportion of plantings which are now 21 years old and theoretically
past their prime.
FFB production from the smaller estates near Medan, in North Sumatra, amounted
to 55,000 mt compared to 52,000 mt in the previous year. These properties, with
favourable soils and climate, performed satisfactorily.
Production from the Bengkulu estates in southern Sumatra was 108,000mt compared
to 61,000mt in 2002, largely on the back of increasing yields from the
relatively young palms. During 2003, 270 ha came into production. The rate of
new planting in Bengkulu increased to 1,700 ha in 2003 and we expect to maintain
this rate in 2004. The remaining balance of 3,000 ha of reserve land is expected
to be fully planted by 2007. These properties are expected to increase
production in the coming years.
The group continues to buy in FFB for processing at its two oil mills. In 2003,
the amount of bought in crop increased by 67% to 172,000 mt, making a useful
contribution to group profits. The new mill on Puding Mas in Bengkulu
contributed most of this increase, operating, like Tasik, close to capacity
throughout the year. The expansion of the Puding Mas mill from 40 mt/hr to 60 mt
/hr is expected to be completed in the last quarter of this year. Likewise, the
new 20 mt/hr mill at Blankahan near Medan in North Sumatra is also expected to
be commissioned at the end of this year.
I would like take this opportunity to pay tribute to our estate and mill staff
whose dedication and hard work have made this a most successful and satisfactory
year. This is particularly so for those working on our newer properties in
Bengkulu and Malaysia who have had to cope with unusually heavy monsoon rains
which, while good for palms, were most trying for the estate infrastructure and
crop transport.
In 2003, we began to achieve a long held aim to assist villages adjoining our
properties in Bengkulu to establish their own 20 ha blocks of oil palm which
contribute to village funds. After much negotiation by our management, I am
pleased to report that we have now implemented 15 such schemes. I expect this to
contribute to social stability in areas surrounding our estates there.
Malaysia
As reported in our interim results, the Cenderung estates showed some
improvement in the middle of the year. For the year, the operation reported a
small profit contribution of $173,000, largely as a result of favourable
commodity prices. Crops increased 10% to 38,000 mt for the year.
Crops up to September continued to be encouraging. However, production in the
last quarter was adversely affected by unusually heavy monsoon rain. More effort
will be expended to improve this property which has disappointed for some time.
Group Development
At the year end, we were half way to achieving our aim of enlarging our planted
acreage to 50,000 ha. For some time, we have been seeking to take advantage of
our stronger balance sheet to increase our planted area by acquisition of a
medium sized planted estate.
Last week, as announced, we acquired the entire issued share capital of P T Bina
Pitri Jaya, an Indonesian company whose principal asset is Bina Pitri estate, a
planted oil palm estate of land title area of 4,329 ha. The land title runs to
2033 when, under current legislation, it is renewable for a further 35 years.
The planted area is about 4,400 ha of which about 200ha are planted in an
extension area of 2,000 ha over which the temporary land rights have expired.
Steps will be taken to obtain title over about 500 ha of this area.
The transaction requires the approval of the Indonesian Investment Co-ordination
Board which has indicated its approval in principle.
The total consideration was US$10 million, including US$2.8 million of confirmed
third party liabilities which require to be settled by the end of March 2004.
Other than the estate, there were no significant assets in the company
purchased. Financial data was not comprehensive but sufficient for us to enter a
contract; 5% of the consideration has been deferred for three months against
undisclosed liabilities. The consideration is payable in cash from the group's
own resources. A local minority shareholder, of up to 20%, may be introduced
later.
Bina Pitri is located in the province of Riau in central Sumatra, about 50km
from the provincial capital, Pekanbaru, and about 180 km to the south east of
Anglo-Eastern's Tasik plantation. Riau has a large and well-developed plantation
industry. The estate has no oil mill, but FFB will be sold to mills nearby.
Terrain and rainfall are very suitable for oil palms.
Planted on average about eight years ago, the estate is in need of
rehabilitation, the cost of which is expected to require a further US$1 million.
The initial annual crop of FFB is expected to be about 30,000mt (less than 10%
of the existing group's), but this should build up strongly over the next few
years. Profit contribution in the first year is unlikely to be material.
The total planted area of the group following this acquisition is 30,000 ha.
Directors and Management
Dato Haron, who continues to manage our Malaysian operations, stepped down as a
director in October 2003. I wish to record our appreciation for his contribution
to us. I also welcome Mr. Foo San Kan who joined as an independent non-executive
director in October. Mr. Foo, who was the senior partner of Ernst & Young in
Malaysia until 2002, brings wide experience of business in the region.
Outlook
The group's FFB crops for the first two months of 2004 were on target and
slightly ahead of the same period in 2003. About 940ha of new plantings in
Bengkulu are expected to be brought into production during the year. CPO prices
have been favourable and strengthened since the year end to $540/mt. If this
price level remains for the rest of the year, we can reasonably expect another
successful and satisfactory year for 2004.
The rubber crop also started the year well and the price, while below the peak
recorded in 2003, has been satisfactory. This crop can be expected again to make
a useful contribution in the current year. The less important cocoa crop in the
first two months has been rather disappointing.
Dividend
On the strength of the results for 2003 and the prospects for 2004, the
directors are proposing a 50% increase in dividend from 4.0cts to 6.0cts per
share.
CHAN TIEK HUAT
24 March 2004 Chairman
CONSOLIDATED PROFIT AND LOSS ACCOUNT
2003 2002 2003 2002
US$'000 US$'000 £'000 £'000
Unaudited Audited Unaudited Audited
Turnover - continuing
operations 48,519 31,139 29,495 20,622
======== ======== ======== ========
Operating profit -
continuing operations 19,994 12,767 12,154 8,455
Net interest (payable) (407) (675) (247) (447)
-------- -------- -------- --------
Profit on ordinary
activities before tax 19,587 12,092 11,907 8,008
Taxation (6,141) (4,367) (3,733) (2,892)
-------- -------- -------- --------
Profit on ordinary
activities after tax 13,446 7,725 8,174 5,116
Minority interests (all
equity interests) (2,201) (1,250) (1,338) (828)
-------- -------- -------- --------
Profit attributable to
shareholders 11,245 6,475 6,836 4,288
Dividends (2,375) (1,571) (1,444) (1,040)
-------- -------- -------- --------
Retained profit for the
year 8,870 4,904 5,392 3,248
Earnings per ordinary
share 28.6cts 16.5cts 17.4p 10.9p
- basic 28.4cts 16.4cts 17.3p 10.9p
- diluted
2003 2002 2003 2002
Operating profit is stated US$'000 US$'000 £'000 £'000
after charging:
Exchange profits 262 828 159 548
-------- -------- -------- --------
TAXATION: 2003 2002 2003 2002
US$'000 US$'000 £'000 £'000
Foreign corporation tax 5,552 4,170 3,375 2,762
Foreign withholding tax
on remittances 321 372 195 246
Deferred tax adjustment -
current year 268 (175) 163 (116)
-------- -------- -------- --------
6,141 4,367 3,733 2,892
======== ======== ======== ========
DIVIDEND: The board has proposed a final and only dividend for 2003 of 6.00cts
(2002 - 4.00cts) to be paid on 8 June 2004 to shareholders on the register on 7
May 2004. Shareholders electing to receive their dividend in sterling will
receive 3.27p (2002 - 2.58p).
ACCOUNTS: The financial information contained in this announcement does not
constitute statutory financial statements within the meaning of section 240 of
the Companies Act 1985. Statutory accounts for the previous financial year ended
31 December 2002 have been delivered to the Registrar of Companies. The
auditors' report on those accounts was unqualified and did not contain any
statement under section 237(2) or (3) of the Companies Act 1985. The auditors
have not yet reported on the accounts for the year ended 31 December 2003, nor
have any such accounts been delivered to the Registrar of Companies. The
accounts for the year ended 31 December 2003 will note that Indonesia has been
through a period of major political change. Further changes could affect
exchange and interest rates and social stability. Indonesian government policy
towards foreign investment and the plantation industry may change, affecting the
group's future profits and cash flow. Accounting policies remain unchanged from
the previous year. This preliminary announcement was approved by the board on 24
March 2004.
CONSOLIDATED BALANCE SHEET
2003 2002 2003 2002
US$'000 US$'000 £'000 £'000
Unaudited Audited Unaudited Audited
Fixed assets
Tangible assets 105,096 103,558 58,712 64,322
-------- -------- -------- --------
Current assets
Stocks 1,713 928 958 576
Debtors 2,736 2,001 1,528 1,243
Investments 313 234 175 145
Cash 15,127 8,416 8,450 5,227
-------- -------- -------- --------
19,889 11,579 11,111 7,191
======== ======== ======== ========
Current liabilities
Creditors: falling due within one year
Borrowings (2,060) (2,040) (1,150) (1,267)
Other creditors (9,439) (7,717) (5,273) (4,793)
-------- -------- -------- --------
(11,499) (9,757) (6,423) (6,060)
======== ======== ======== ========
Net current assets 8,390 1,822 4,688 1,131
-------- -------- -------- --------
Total assets less current
liabilities 113,486 105,380 63,400 65,453
Non-current liabilities
Creditors: falling due after more than one
year
Borrowings (6,108) (8,085) (3,412) (5,022)
Deferred taxation 1,013 1,215 566 755
-------- -------- -------- --------
Net assets 108,391 98,510 60,554 61,186
======== ======== ======== ========
Share capital 15,319 15,171 9,895 9,808
Share premium 23,679 23,570 15,395 15,329
Share capital redemption
reserve 1,087 1,087 663 663
Revaluation and exchange
reserve 5,375 6,586 (556) 3,028
Profit and loss account 43,702 34,719 24,415 21,565
-------- -------- -------- --------
Shareholders' funds 89,162 81,133 49,812 50,393
Minority interests 19,229 17,377 10,742 10,793
-------- -------- -------- --------
108,391 98,510 60,554 61,186
======== ======== ======== ========
CONSOLIDATED STATEMENT OF RECOGNISED GAINS AND LOSSES
2003 2002
US$000 US$000
Unaudited Audited
Profit for the financial
year 11,245 6,475
Surplus on deemed
disposal of investment in
subsidiary 113 -
Unrealised deficit on
revaluation of the
estates (5,126) (15,375)
Profit on exchange
translation 3,915 10,975
-------- --------
Total recognised gains
relating to the year 10,147 2,075
-------- --------
RECONCILIATION OF MOVEMENT IN SHAREHOLDERS' FUNDS
2003 2002
US$000 US$000
Unaudited Audited
Total recognised gains 10,147 2,075
Share capital
subscription 257 -
Dividends (2,375) (1,571)
-------- --------
Net increase in
shareholders' funds 8,029 504
Beginning of year 81,133 80,629
-------- --------
End of year 89,162 81,133
-------- --------
CONSOLIDATED CASH FLOW statement
2003 2002 2003 2002
US$000 US$000 £000 £000
Unaudited Audited Unaudited Audited
Net cash inflow from
operating activities 22,142 13,691 12,604 8,670
Returns on investment and
servicing of finance (1,157) (1,158) (703) (767)
Tax paid (5,364) (2,424) (3,261) (1,605)
Capital expenditure (5,639) (6,722) (3,428) (4,452)
-------- -------- -------- --------
Equity dividends paid (1,571) (785) (955) (520)
- parent company
-------- -------- -------- --------
Cash inflow before
financing 8,411 2,602 4,257 1,326
Financing
-------- -------- -------- --------
Share options exercised 257 - 156 -
(Repayment)/drawdown of
long term (2,023) 3,663 (1,230) 2,427
loans
Finance lease repayments 47 (29) 29 (19)
-------- -------- -------- --------
(1,719) 3,634 (1,045) 2,408
-------- -------- -------- --------
Increase in cash in the
year 6,692 6,236 3,212 3,734
======== ======== ======== ========
EXCHANGE RATES ($ : £)
2003 2002
Year end 1.79 1.61
Average 1.65 1.51
WEIGHTED AVERAGE NUMBER OF
SHARES IN ISSUE
Basic 39,378,899 39,226,922
Diluted 39,581,527 39,440,025
CROPS
2003 2002
Tonnes Tonnes
Oil palm fresh fruit
bunches 372,290 294,062
-ex estates
-bought in 170,948 101,906
Crude palm oil 94,523 63,240
Rubber 1,800 1,491
Cocoa 154 178
AREAS
Total Mature Immature
Ha Ha Ha
Oil palm 24,417 19,910 4,507
Rubber 757 757 -
Cocoa 257 240 17
-------- -------- --------
25,431 20,907 4,524
-------- --------
Reserves 9,251
Further title to be
issued 5,397
--------
Total 40,079
========
This information is provided by RNS
The company news service from the London Stock Exchange
Wednesday, 18th December 2024
COMPANIES COVERED:
Latest directors dealings
- 1 minute ago Anglo American
- 42 minutes ago Coca-Cola HBC AG (CDI)
- 51 minutes ago London Finance & Investment Group
- 1 hour ago Volex
- 1 hour ago Primary Health Properties