Interim Management Statement

RNS Number : 2726S

Anglo-Eastern Plantations PLC

17 November 2011

 



17 November 2011

Anglo-Eastern Plantations Plc

Interim Management Statement

Anglo-Eastern Plantations Plc ("AEP" or "the Company"), which owns approximately 133,000 hectares of plantation land, primarily in Indonesia, and operates approximately 55,600 hectares of developed plantations, today announces its Interim Management Statement in respect of the period since 30 June 2011.

Operational and financial performance

A combination of increased production and higher average Crude Palm Oil ("CPO") prices has led to an increase in revenues for the first nine months ended 30 September 2011 of 50% to US$198m (2010: US$132m). Own production of fresh fruit bunches ("FFB") was 513,800mt, an increase of 17% compared to the same period in 2010 (3Q10:437,800mt). FFB bought in was 405,400mt, 27% higher in comparison with the same period in 2010 (3Q10:320,400mt). Total CPO produced was 182,000mt, 21% better than the corresponding period in 2010 (3Q10:150,300mt) mainly due to better FFB yield and increase in FFB bought in.

CPO CIF Rotterdam price averaged US$1,157/mt for the first nine months to 30 September 2011, an increase of 40% from the average of US$826/mt recorded for the corresponding period in 2010.

As reported in the Company's interim results statement on 26 August 2011 operating costs have also risen as a result of increased fertilizer application, higher wages and additional infrastructure expenditure.

AEP's balance sheet remains strong with the Company continuing to achieve positive cash flow. The Group's net cash balance at 30 September 2011 was US$84.3m, 141% higher than U$35m for the same period in 2010. The Company's borrowing totalled US$12.2m at 30 September 2011 (3Q10:US$19.9m).

Development

AEP planted 3,250 hectares with oil palm seedlings during the first nine months of 2011, although new plantings remain behind the planned schedule due to continuing adverse dry weather conditions in South Sumatra and Central Kalimantan.

The tender process for the construction of new palm oil mills in North Sumatra and Central Kalimantan are in progress. Commencement of the construction of both mills is planned for 1Q2012 and 2Q2012 respectively. The upgrading of Blankahan palm oil mill from rated throughput of 25mt/hr to 40mt/hr has now been completed.

Directors

Drs. Kanaka Puradiredja's appointment as Non-Executive Director expired on 31 July 2011 and has been extended for another two years by the Board.

Outlook

CPO price continued to trend downward and stood at US$1,028/mt on 7 November 2011, representing a 23% decrease from its high of US$1,335/mt recorded in February 2011.  Palm oil prices have come under pressure on expectation of high CPO stocks as a result of better harvest and concerns over lower demand resulting from slower global economic growth. However the Company anticipates that stronger soya oil price should lift CPO demand, which continues to trade at a significant discount to soya oil.

The Indonesian Rupiah has weakened against the US dollar in the current period. To mitigate exposure to currency exchange volatility, the Company is continuing to manage its cash in dollar and local currency prudently, taking into consideration its dollar-denominated borrowings and operational cost currency requirements.

Barring a further decline in CPO price and that the demand for the Company's products remains strong, the Board is cautiously confident of reporting a satisfactory profit level and cash flow for the remainder of 2011.

For further enquiry, contact:

Anglo-Eastern Plantations Plc
Dato' John Lim Ewe Chuan	[phone]
Charles Stanley Securities
Russell Cook Luke Webster	[phone]

 

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