Interim Management Statement

RNS Number : 7656R

Anglo-Eastern Plantations PLC

22 November 2012

Anglo-Eastern Plantations Plc

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

Interim Management Statement

Anglo-Eastern Plantations Plc, which owns, operates and develops plantations in Indonesia and Malaysia amounting to some 130,000 hectares producing mainly palm oil and some rubber, of which approximately 58,574 hectares are planted, today announces its Interim Management Statement in respect of the period since 30 June 2012.

Operational and financial performance

For the first nine months ended 30 September 2012, the Group's production of fresh fruit bunches ("FFB") was 573,000mt, an increase of 12% compared to the same period in 2011 (9M11: 513,800mt). External FFB purchased from local smallholders was 411,700mt, an increase of 2% compared to the same period last year (9M11: 405,400mt). The Group's five mills produced a total of 194,400 mt of Crude Palm Oil ("CPO"), 7% higher than the corresponding period in 2011 (9M11: 182,000mt) as a result of the higher crop production from AEP's own plantations and the increase of bought-in FFB.

CPO CIF Rotterdam price averaged US$1,059/mt for the first nine months to 30 September 2012, a decrease of 9% from the average of US$1,157/mt recorded in the nine months to 30 September 2011.

AEP's balance sheet remains strong with the Group continuing to generate positive cash flow. The Group's net cash balance at 30 September 2012 was U$78.3m (3Q2011: US$84.3m), up from the US$69.9m at 30 June 2012 reported on 30 August 2012. During the year, the Company's subsidiary, PT Sawit Graha Manunggal secured a loan from an Indonesian bank to fund new planting, construction of a mill and for working capital of its operation in Kalimantan, Indonesia. As of 30 September 2012, the Company's development loans totalled US$20.0m (3Q11: US$12.2m).

Development

The Group's new planting for the first nine months ended 30 September 2012 was 1,461 hectares (9M11:3,250 hectares). New planting was affected by a protracted negotiations over settlement of land compensation with villagers and a delay in the issuance of land release permit (Izin Pelepasan) for two plantations. However as of last month, one of these plantations has now obtained the necessary permit and shall proceed to clear the land for planting.

Permits for the construction of palm oil mills in North Sumatera and Central Kalimantan were held up by local authorities and construction is now expected to commence in first quarter of 2013.

As announced previously, the Group's US$4.5m investment in the biogas and biomass project planned for Blankahan Mill in North Sumatera will start in the fourth quarter of 2012. This project will enhance AEP waste management treatment and at the same time mitigate the emissions of biogas.

Directors

Dato' John Lim Ewe Chuan's appointment as Executive Director - Corporate Finance & Corporate Affairs expired on 31 August 2012 and was extended for a further two years by the Board.

Outlook

The CPO price ended at US$823/mt in mid-Nov 2012, representing a 21% decrease from US$1,045/mt from the start of the year. A confluence of negatives drove the CPO price to a near two-year low. Recent CPO price weakness was driven by a weak global economy resulting in reduced demand coupled with seasonally high production accentuating in a high stockpile of CPO.

The Board believes that the CPO price will gradually recover as global stock-to-usage of 17 oils and fats is relatively low and the price differential between CPO and soyoil, its nearest competitor, is at a near four-year high of over US$300/mt, which is more than double the historical average. The Board anticipates that performance for the remainder of 2012 will be satisfactory and in line with management expectations.

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