Interim Results

RNS Number : 7869O

Anglo-Eastern Plantations PLC

23 August 2017

 

Anglo-Eastern Plantations Plc

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

Announcement of interim results for six months ended 30 June 2017

Anglo-Eastern Plantations Plc, and its subsidiaries are a major producer of palm oil and rubber with plantations across Indonesia and Malaysia amounting to some 128,400 hectares, has today released its results for the six months ended 30 June 2017.

Financial Highlights

	2017 6 months to 30 June $m (unaudited)		2016 6 months to 30 June $m (unaudited & restated)		2016 12 months to 31 December $m (audited)
Revenue	146.9		86.0		246.2
Profit before tax
- before biological assets ("BA") movement	31.8		14.0		57.5
- after biological assets movement	31.6		17.3		60.8
Earnings per share before BA movement	46.24cts		14.99cts		82.16cts
Earnings per share after BA movement	45.97cts		20.29cts		87.58cts
Total net assets	470.6		420.0		445.3

Enquiries:

Anglo-Eastern Plantations Plc
Dato' John Lim Ewe Chuan	[phone]
Panmure Gordon
Andrew Godber	[phone]

Chairman's Interim Statement

I am pleased to present the interim results for the Group for the six months to 30 June 2017.

The revenue for the six months to 30 June was $146.9 million, 71% higher than $86.0 million for the first six months of 2016. In the same period the Group gross profit rose to $34.9 million from $18.5 million. Overall the profit before tax for the first half of 2017 improved by 83% to $31.6 million from $17.3 million for the corresponding period. Higher crop production and purchase of external crops as well as higher Crude Palm Oil ("CPO") prices lifted the profit of the Group.

Fresh Fruit Bunches ("FFB") production for the first half of 2017 was 15% higher at 436,900mt compared to 378,400mt in the same period last year. The increase in production was due to the strong recovery of FFB production especially in Riau and Kalimantan regions post El-Nino weather disruption. The Group continued to buy more external crops to maximise the utilization of its mills. Bought-in crops increased by 84% to 486,300mt from 264,500mt.

Operational and financial performance

For the six months ended 30 June 2017, the gross profit margin increased to 24% from 22% as the Group benefited from higher CPO prices and a higher contribution from the purchase of external crop.

CPO price ex-Rotterdam averaged $740/mt for the first six months of 2017, 11% higher than $668/mt over the same period in 2016.

The amendments to IAS 16 and the amendments to IAS 41, which came into effect on 1 January 2016, require Biological Assets that meet the definition of bearer plants to be accounted for as Property, Plant and Equipment in accordance with IAS 16. This was adopted in the prior year interim and annual financial statements for the first time and required retrospective application. The prior year interim financial statements have been restated to reflect the changes made in the annual financial statements which were subject to audit. The details of the changes are disclosed in Note 2 - Prior period's restatement.

Profit after tax for the six months ended 30 June 2017 was $23.3 million, 112% higher than $11.0 million for the first six months of 2016.

The resulting earnings per share for the period improved by 127% to 45.97cts (1H 2016: 20.29cts).

The Group's balance sheet remains reasonably strong and cash flow remains healthy. Net assets at 30 June 2017 were $470.6 million compared to $445.3 million at 31 December 2016. The increase in net assets was attributed to increase in profit for the first half of 2017.

As at 30 June 2017 the Group's total cash balance was $123.0 million (1H 2016: $93.0 million) with total borrowings of $31.2 million (1H 2016: $35.6 million), giving a net cash position of $91.8 million, compared to $57.4 million as at 30 June 2016.

Operating costs

The operating costs per hectare for the Indonesian operations were higher in the first half of 2017 compared to the same period in 2016 mainly due to an increase in wages, fuel, transportation costs and depreciation. Higher operating costs were also partly attributed to a 1% increase in matured areas for the corresponding period.

Production and Sales

	2017	2016	2016
	6 months	6 months	Year
	to 30 June	to 30 June	to 31 December
	mt	mt	mt
Oil palm production
FFB
- all estates	436,900	378,400	897,700
- bought-in or processed for third parties	486,300	264,500	813,700
Saleable CPO	187,400	134,100	353,100
Saleable palm kernels	44,900	30,500	81,500
Oil palm sales
CPO	192,900	130,400	345,000
Palm kernels	45,600	29,300	79,900
FFB sold outside	11,000	12,100	24,300
Rubber production	397	371	868

The Group's six mills processed a total of 912,200mt in FFB for the first half of 2017, a 45% increase compared to 630,800mt for the same period last year. The higher throughput was due to both higher internal crops production and external purchases.

Overall CPO produced for the first half of 2017 was higher by 40% at 187,400mt from 134,100mt.

The Group continues to reduce its overall carbon footprint as the two biogas plants in Bengkulu and Kalimantan are in full operation. The biogas plant in Bengkulu with a capacity to generate 2 megawatts of electrical power will sell the surplus power to the regional grid from the beginning of third quarter of 2017. While the biogas plant in North Sumatera with a capacity of 1 megawatt has sold over 3,000 MWh of surplus electricity to the National Grid since January this year.

Commodity prices

Although the CPO price for first half of 2017 averaged $740/mt, 11% higher than last year (1H 2016: $668/mt), the price has gradually trended downwards from the start of the year at $795/mt to close at $645/mt on 30 June 2017. A higher CPO production for the second half of the year amid strong competition from bumper soybean production will likely hurt and depress the CPO price for the remainder of the year.

Rubber price averaged $1,849/mt, 56% higher than 2016 (1H 2016: $1,188/mt).

Development

The Group's planted areas at 30 June 2017 comprised:

	Total	Mature	Immature
	ha	ha	Ha
North Sumatera	19,049	14,884	4,165
Bengkulu	16,943	16,943	-
Riau	4,873	4,873	-
South Sumatera	5,778	5,037	741
Kalimantan	13,844	9,679	4,165
Bangka	703	236	467
Plasma	2,706	1,417	1,289
Indonesia	63,896	53,069	10,827
Malaysia	3,696	3,460	236
Total: 30 June 2017	67,592	56,529	11,063
Total: 31 December 2016	66,674	54,217	12,457
Total: 30 June 2016	65,561	55,842	9,719

The Group's new planting for the first six months of 2017 totalled 781ha compared to 518ha for the same corresponding period last year. The slower than anticipated rate of new planting is due to protracted land compensation negotiations and also the dry condition which was not conducive for planting.

The Group remains optimistic that planting will pick up in the second half of 2017. The Group's total landholding comprises some 128,400ha, of which the planted area stands around 67,592ha (1H 2016: 65,561ha).

Significant capital expenditure is expected in the replanting of over 1,700ha of old palms in North Sumatera which started in June 2017.

Dividend

As in previous years no interim dividend has been declared. The Board is mindful that given the anticipated further capital commitments the level of dividend needs to be balanced against the planned expenditure. A final dividend of 3.0 pence per share in respect of the year to 31 December 2016 was paid on 14 July 2017.

Outlook

The upside of the CPO price is limited as the industry heads into its peak production cycle in the third quarter of 2017. The demand of CPO from price-sensitive markets may however pick-up as CPO price discount to soybean oil has widened. 

The Board looks forward to reporting further progress in its next trading update.

Others

I am pleased to advise that after an absence of one year, AEP with effect from 1 June 2017, has been included in the FTSE Small Cap and FTSE All Share-Index. This may potentially lead to greater liquidity as index related funds re-weight their holding.

Principal risks and uncertainties

The directors believe the potential impact of Britain's vote to leave the European Union, better known as Brexit, on the Group is limited. Other than maintaining its corporate presence and listing in United Kingdom ("UK"), all plantation and mill operations together with marketing are primarily based in Indonesia. Unless Brexit causes a worldwide recession which significantly reduces the consumption of CPO, the principal risks and uncertainties have broadly remained the same since the publication of the annual report for the year ended 31 December 2016.

A more detailed explanation of the risks relevant to the Group is on pages 18 to 22 and from pages 87 to 91 of the 2016 annual report which is available at www.angloeastern.co.uk.

The information communicated in this announcement is inside information for the purposes of Article 7 of Market Abuse Regulation 596/2014.

Madam Lim Siew Kim

Chairman

23 August 2017

Responsibility Statements

We confirm that to the best of our knowledge:

a)       The unaudited interim financial statements have been prepared in accordance with IAS34: Interim Financial Reporting as adopted by the European Union;

b)       The Chairman's statement includes a fair review of the information required by 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 2017 and any material changes in the related party transactions described in the last Annual Report) of the Disclosure and Transparency Rules of the United Kingdom Financial Services Authority.

By order of the Board

Dato' John Lim Ewe Chuan

Executive Director, Corporate Finance and Corporate Affairs

23 August 2017

Condensed Consolidated Income Statement

		2017 6 months to 30 June (unaudited)			2016 6 months to 30 June (unaudited & restated)			2016 Year to 31 December (audited)
Continuing operations	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
Revenue		146,870	-	146,870	86,044	-	86,044	246,210	-	246,210
Cost of sales		(111,826)	(181)	(112,007)	(70,815)	3,288	(67,527)	(184,337)	3,383	(180,954)
Gross profit		35,044	(181)	34,863	15,229	3,288	18,517	61,873	3,383	65,256
Administration expenses		(3,269)	-	(3,269)	(3,355)	-	(3,355)	(6,653)	-	(6,653)
Impairment losses		(1,596)	-	(1,596)	(1,722)	-	(1,722)	(2,740)	-	(2,740)
Operating profit		30,179	(181)	29,998	10,152	3,288	13,440	52,480	3,383	55,863
Exchange gains		156	-	156	1,244	-	1,244	845	-	845
Finance income		2,390	-	2,390	3,406	-	3,406	5,881	-	5,881
Finance expense	4	(913)	-	(913)	(835)	-	(835)	(1,743)	-	(1,743)
Profit before tax		31,812	(181)	31,631	13,967	3,288	17,255	57,463	3,383	60,846
Tax expense	6	(8,394)	45	(8,349)	(5,472)	(820)	(6,292)	(16,021)	(844)	(16,865)
Profit for the period		23,418	(136)	23,282	8,495	2,468	10,963	41,442	2,539	43,981
Attributable to:
-  Owners of the parent		18,328	(109)	18,219	5,940	2,104	8,044	32,563	2,150	34,713
-  Non-controlling interests		5,090	(27)	5,063	2,555	364	2,919	8,879	389	9,268
		23,418	(136)	23,282	8,495	2,468	10,963	41,442	2,539	43,981
Earnings per share for profit attributable to the owners of the parent during the period
-  basic	8			45.97cts			20.29cts			87.58cts
-  diluted	8			45.93cts			20.29cts			87.58cts

Condensed Consolidated Statement of Comprehensive Income

		2017	2016	2016
		6 months	6 months	Year
		to 30 June	to 30 June	to 31 December
		(unaudited)	(unaudited & restated)	(audited)
		$000	$000	$000
Profit for the period		23,282	10,963	43,981
Other comprehensive income
Items may be reclassified to profit or loss:
Gain on exchange translation of foreign operations		4,606	18,950	8,860
Net other comprehensive income may be reclassified to profit or loss		4,606	18,950	8,860
Items not to be reclassified to profit or loss:
Unrealised (loss) / gain on revaluation of leasehold land, net of tax		(795)	(1,126)	1,752
Remeasurement of retirement benefits plan, net of tax		-	-	(567)
Net other comprehensive (expense) / income not being reclassified to profit or loss		(795)	(1,126)	1,185
Total other comprehensive income for the period, net of tax		3,811	17,824	10,045
Total comprehensive income for the period		27,093	28,787	54,026
Attributable to:
-  Owners of the parent		21,049	22,155	43,099
-  Non-controlling interests		6,044	6,632	10,927
		27,093	28,787	54,026

Condensed Consolidated Statement of Financial Position

					2017		2016		2016
				as at 30 June		as at 30 June		as at 31 December
				(unaudited)		(unaudited & restated)		(audited)
				$000		$000		$000
Non-current assets
Property, plant and equipment				361,270		355,030		356,790
Receivables				5,248		3,565		3,891
Deferred tax assets				15,883		11,235		13,451
				382,401		369,830		374,132
Current assets
Inventories				8,257		8,147		9,219
Tax receivables				33,664		22,856		26,695
Biological assets				6,995		7,195		7,107
Trade and other receivables				8,903		8,460		5,767
Cash and cash equivalents				123,041		92,994		118,176
				180,860		139,652		166,964
Current liabilities
Loans and borrowings				(7,234)		(4,391)		(6,203)
Trade and other payables				(15,459)		(14,508)		(16,054)
Tax liabilities				(7,500)		(3,690)		(8,974)
Dividend payables				(1,515)		(1,003)		-
				(31,708)		(23,592)		(31,231)
Net current assets				149,152		116,060		135,733
Non-current liabilities
Loans and borrowings				(24,000)		(31,234)		(27,875)
Deferred tax liabilities				(29,688)		(29,393)		(30,063)
Retirement benefits - net liabilities				(7,257)		(5,241)		(6,666)
				(60,945)		(65,868)		(64,604)
Net assets				470,608		420,022		445,261
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
Revaluation reserves				60,322		58,583		61,038
Exchange reserves				(216,024)		(211,874)		(219,570)
Retained earnings				498,992		456,103		482,288
				382,645		342,167		363,111
Non-controlling interests				87,963		77,855		82,150
Total equity				470,608		420,022		445,261

Condensed Consolidated Statement of Changes in Equity

	Attributable to owners of the parent
	Share capital	Treasury shares	Share premium	Capital redemption reserve	Revaluation reserves	Foreign exchange reserves	Retained earnings	Total	Non-controlling interests	Total equity
	$000	$000	$000	$000	$000	$000	$000	$000	$000	$000
Balance at 31 December 2015	15,504	(1,171)	23,935	1,087	59,594	(234,490)	504,892	369,351	82,607	451,958
Restatement (note 2)	-	-	-	-	(22)	7,516	(55,830)	(48,336)	(9,009)	(57,345)
Balance at 31 December 2015 after restatement	15,504	(1,171)	23,935	1,087	59,572	(226,974)	449,062	321,015	73,598	394,613
Items of other comprehensive income:
-Unrealised gain on revaluation of leasehold land, net of tax	-	-	-	-	1,466	-	-	1,466	286	1,752
-Remeasurement of retirement benefits plan, net of tax	-	-	-	-	-	-	(484)	(484)	(83)	(567)
-Gain on exchange translation of foreign operations	-	-	-	-	-	7,404	-	7,404	1,456	8,860
Total other comprehensive income / (expense)	-	-	-	-	1,466	7,404	(484)	8,386	1,659	10,045
Profit for the year	-	-	-	-	-	-	34,713	34,713	9,268	43,981
Total comprehensive income for the year	-	-	-	-	1,466	7,404	34,229	43,099	10,927	54,026
Dividends paid	-	-	-	-	-	-	(1,003)	(1,003)	(2,375)	(3,378)
Balance at 31 December 2016	15,504	(1,171)	23,935	1,087	61,038	(219,570)	482,288	363,111	82,150	445,261
Items of other comprehensive income:
-Unrealised loss on revaluation of leasehold land, net of tax	-	-	-	-	(716)	-	-	(716)	(79)	(795)
-Gain on exchange translation of foreign operations	-	-	-	-	-	3,546	-	3,546	1,060	4,606
Total other comprehensive (expense) / income	-	-	-	-	(716)	3,546	-	2,830	981	3,811
Profit for the period	-	-	-	-	-	-	18,219	18,219	5,063	23,282
Total comprehensive (expense) / income for the period	-	-	-	-	(716)	3,546	18,219	21,049	6,044	27,093
Dividend payable	-	-	-	-	-	-	(1,515)	(1,515)	(231)	(1,746)
Balance at 30 June 2017	15,504	(1,171)	23,935	1,087	60,322	(216,024)	498,992	382,645	87,963	470,608

	Attributable to owners of the parent
	Share capital		Treasury shares	Share premium			Capital redemption reserve		Revaluation reserves		Foreign exchange reserves	Retained earnings		Total		Non-controlling interests	Total Equity
	$000		$000	$000			$000		$000		$000	$000		$000		$000	$000
Balance at 31 December 2015	15,504	(1,171)			23,935	1,087		59,594		(234,490)			504,892		369,351	82,607		451,958
Restatement (note 2)	-	-			-	-		(22)		7,516			(55,830)		(48,336)	(9,009)		(57,345)
Balance at 31 December 2015 after restatement	15,504	(1,171)			23,935	1,087		59,572		(226,974)			449,062		321,015	73,598		394,613
Items of other comprehensive income:
-Unrealised loss on revaluation of leasehold land, net of tax	-	-			-	-		(989)		-			-		(989)	(137)		(1,126)
-Gain on exchange translation of foreign operations	-	-			-	-		-		15,100			-		15,100	3,850		18,950
Total other comprehensive (expense) / income	-	-			-	-		(989)		15,100			-		14,111	3,713		17,824
Profit for the period	-	-			-	-		-		-			8,044		8,044	2,919		10,963
Total comprehensive (expense) / income for the period	-	-			-	-		(989)		15,100			8,044		22,155	6,632		28,787
Dividends payable	-	-			-	-		-		-			(1,003)		(1,003)	(2,375)		(3,378)
Balance at 30 June 2016 after restatement	15,504	(1,171)			23,935	1,087		58,583		(211,874)			456,103		342,167	77,855		420,022

Condensed Consolidated Statement of Cash Flows

	2017	2016	2016
	6 months	6 months	Year
	to 30 June	to 30 June	to 31 December
	(unaudited)	(unaudited & restated)	(audited)
	$000	$000	$000
Cash flows from operating activities
Profit before tax	31,631	17,255	60,846
Adjustments for:
Biological assets movement	181	(3,288)	(3,383)
Gain on disposal of property, plant and equipment	(7)	(2)	(13)
Depreciation	8,050	7,516	15,677
Retirement benefits provisions	680	502	1,700
Net finance income	(1,477)	(2,571)	(4,138)
Unrealised gain in foreign exchange	(156)	(1,244)	(845)
Property, plant and equipment written off	88	54	731
Impairment losses	1,596	1,722	2,740
Operating cash flow before changes in working capital	40,586	19,944	73,315
Decrease / (Increase) in inventories	1,044	(1,140)	(2,353)
Increase in non-current, trade and other receivables	(4,597)	(3,888)	(1,460)
Decrease in trade and other payables	(734)	(3,630)	(1,749)
Cash inflow from operations	36,299	11,286	67,753
Interest paid	(913)	(835)	(1,743)
Retirement benefits paid	(148)	-	(250)
Overseas tax paid	(19,350)	(15,689)	(27,133)
Net cash from / (used in) operations	15,888	(5,238)	38,627
Investing activities
Property, plant and equipment
-  purchases	(11,628)	(13,366)	(30,484)
-  sales	81	58	931
Interest received	2,390	3,406	5,881
Net cash used in investing activities	(9,157)	(9,902)	(23,672)

Financing activities
Dividends paid by Company	-	(1,003)	(1,003)
Dividends paid to non-controlling interests	(202)	(1,372)	(2,375)
Drawdown of long term loans	-	1,250	1,250
Repayment of existing long term loans	(2,844)	(250)	(1,797)
Net cash used in financing activities	(3,046)	(1,375)	(3,925)
Increase / (Decrease) in cash and cash equivalents	3,685	(16,515)	11,030
Cash and cash equivalents
At beginning of period	118,176	104,614	104,614
Foreign exchange	1,180	4,895	2,532
At end of period	123,041	92,994	118,176
Comprising:
Cash at end of period	123,041	92,994	118,176

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", as adopted by the European Union. 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 2016 Annual Report. The financial information for the half years ended 30 June 2017 and 30 June 2016 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 IFRSs as adopted by the European Union. The comparative financial information for the year ended 31 December 2016 included within this report does not constitute the full statutory accounts for that period. The statutory Annual Report and Financial Statements for 2016 have been filed with the Registrar of Companies. The Independent Auditors' Report on the Annual Report and Financial Statements for 2016 was unqualified, did not draw attention to any matters by way of emphasis, and did not contain a statement under 498(2) or 498(3) of the Companies Act 2006.

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.

After making enquiries, the directors have a reasonable expectation that the Company and the Group have adequate resources to continue operations for the foreseeable future.  For this reason, they continue to adopt the going concern basis in preparing the financial statements.

2.         Prior period's restatement

The amendments to IAS 16 and the amendments to IAS 41, which came into effect on 1 January 2016, require Biological Assets that meet the definition of bearer plants to be accounted for as Property, Plant and Equipment in accordance with IAS 16. This was adopted in the prior year interim and annual financial statements for the first time and required retrospective application. The prior year interim financial statements have been restated to reflect the changes made in the annual financial statements which were subject to audit. 

The effects of the restatements are summarised as follows:

	2016	2015
	6 months to 30 June	Year to 31 December
	(unaudited & restated)	(audited & restated)
	$000	$000
Impact on condensed consolidated income statement
Profit / (Loss) for the period before restatement	14,002	(13,429)
Effect of change in restatement:
Cost of sales	(480)	(6,787)
Biological assets movement	-	63,389
Administration expenses	(17)	196
Impairment losses	(1,722)	(12,470)
Tax expense	(820)	(15,847)
	(3,039)	28,481
Profit for the period after restatement	10,963	15,052

	2016	2015
	6 months to 30 June	Year to 31 December
	(unaudited & restated)	(audited & restated)
Impact on earnings per share
Basic EPS before BA movement	(4.09)cts	(43.50)cts
Basic EPS after BA movement	(7.09)cts	62.24cts
Diluted EPS before BA movement	(4.09)cts	(43.52)cts
Diluted EPS after BA movement	(7.09)cts	62.22cts

	2016	2015
	6 months to 30 June	Year to 31 December
	(unaudited & restated)	(audited & restated)
	$000	$000
Impact on condensed consolidated statement of comprehensive income
Other comprehensive income / (expense) for the period before restatement	16,696	(50,585)
Effect of change in restatement:
Unrealised gain on revaluation of leasehold land	390	-
Loss on exchange translation of foreign operations	1,136	8,858
Deferred tax on revaluation	(398)	(40)
	1,128	8,818
Other comprehensive income / (expense) for the period after restatement	17,824	(41,767)

	Balance as reported 30 June 2016 $000	Effect of restatement $000	Restated balance at 30 June 2016 $000
Impact on condensed consolidated statement of financial position
Property, plant and equipment	329,788	25,242	355,030
Deferred tax	(16,506)	(1,652)	(18,158)
Revaluation reserves	(58,587)	4	(58,583)
Exchange reserves	211,615	259	211,874
Retained earnings	(433,069)	(23,034)	(456,103)
Non-controlling interests	(77,036)	(819)	(77,855)

	Balance as reported 31 December 2015 $000	Effect of restatement $000	Restated balance at 31 December 2015 $000
Impact on condensed consolidated statement of financial position
Non-current assets - Biological assets	179,010	(179,010)	-
Property, plant and equipment	219,990	116,454	336,444
Deferred tax	(20,911)	1,538	(19,373)
Current assets - Biological assets	-	3,673	3,673
Revaluation reserves	(59,594)	22	(59,572)
Exchange reserves	234,490	(7,516)	226,974
Retained earnings	(504,892)	55,830	(449,062)
Non-controlling interests	(82,607)	9,009	(73,598)

3.         Foreign exchange

		2017	2016	2016
		6 months	6 months	Year
		to 30 June	to 30 June	to 31 December
		(unaudited)	(unaudited)	(audited)
Average exchange rates
Rp : $		13,331	13,420	13,307
$ : £		1.26	1.43	1.35
RM : $		4.39	4.10	4.14
Closing exchange rates
Rp : $		13,319	13,180	13,436
$ : £		1.30	1.34	1.23
RM : $		4.29	4.03	4.49

4.         Finance expense

		2017	2016	2016
		6 months	6 months	Year
		to 30 June	to 30 June	to 31 December
		(unaudited)	(unaudited)	(audited)
		$000	$000	$000
Payable		913	835	1,743

5.         Segment information

	North Sumatera	Bengkulu	South Sumatera	Riau	Bangka		Kalimantan		Total Indonesia		Malaysia		UK		Total
	$000	$000	$000	$000	$000		$000		$000		$000		$000		$000
6 months to 30 June 2017 (unaudited)
Total sales revenue (all external)
-     CPO, palm kernel and FFB	46,827	51,956	-	25,930	51		18,083		142,847		1,588		-		144,435
-     Rubber	745	-	-	-	-		-		745		-		-		745
-     Shell nuts	373	365	2	434	-		8		1,182		-		-		1,182
-     Biomass products	451	57	-	-	-		-		508		-		-		508
Total revenue	48,396	52,378	2	26,364	51		18,091		145,282		1,588		-		146,870
Profit / (loss) before tax	10,414	13,319	(1,921)	7,351	(293)		3,237		32,107		288		(583)		31,812
BA movement	131	(17)	(41)	(167)	(1)		(62)		(157)		(24)		-		(181)
Profit / (loss) for the period before tax per consolidated income statement	10,545	13,302	(1,962)	7,184	(294)		3,175		31,950		264		(583)		31,631
Depreciation	(1,959)	(2,026)	(1,356)	(461)	(79)		(1,875)		(7,756)		(294)		-		(8,050)
Impairment losses	-	-	446	-	(110)		(1,932)		(1,596)		-		-		(1,596)
Inter-segment transactions	2,559	(1,058)	(402)	(304)	(40)		(831)		(76)		46		30		-
Income tax	(4,448)	(2,918)	1,906	(2,517)	86		(214)		(8,105)		(102)		(142)		(8,349)
Total assets	182,406	140,227	57,161	36,290	11,913		107,376		535,373		22,334		5,554		563,261
Non-current assets	104,221	75,796	55,473	20,108	11,699		97,809		365,106		16,717		578		382,401
Non-current assets - additions	3,353	1,171	997	368	222		5,495		11,606		22		-		11,628

	North Sumatera	Bengkulu	South Sumatera	Riau	Bangka		Kalimantan		Total Indonesia		Malaysia		UK		Total
	$000	$000	$000	$000	$000		$000		$000		$000		$000		$000
6 months to 30 June 2016 (unaudited & restated)
Total sales revenue (all external)
-     CPO, palm kernel and FFB	33,302	30,876	1	11,771	5		7,526		83,481		1,637		-		85,118
-     Rubber	441	-	-	-	-		-		441		-		-		441
-     Shell nuts	90	252	-	27	-		9		378		-		-		378
-     Biomass products	107	-	-	-	-		-		107		-		-		107
Total revenue	33,940	31,128	1	11,798	5		7,535		84,407		1,637		-		86,044
Profit / (loss) before tax	8,205	6,434	(2,730)	2,974	(281)		(1,315)		13,287		65		615		13,967
BA movement	1,142	1,533	50	441	-		40		3,206		82		-		3,288
Profit / (loss) for the period before tax per consolidated income statement	9,347	7,967	(2,680)	3,415	(281)		(1,275)		16,493		147		615		17,255
Depreciation	(1,951)	(1,939)	(1,228)	(439)	(32)		(1,597)		(7,166)		(330)		-		(7,516)
Impairment losses	-	-	201	-	(165)		(1,758)		(1,722)		-		-		(1,722)
Inter-segment transactions	1,683	(1,060)	(384)	(305)	-		(637)		(703)		673		30		-
Income tax	(4,101)	(1,692)	1,622	(1,397)	25		663		(4,880)		(135)		(1,277)		(6,292)
Total assets	163,970	112,878	52,434	38,341	11,720		102,167		481,510		23,277		4,695		509,482
Non-current assets	100,264	73,974	50,706	20,138	11,499		94,255		350,836		18,416		578		369,830
Non-current assets - additions	3,353	1,576	1,228	525	254		6,399		13,335		31		-		13,366

	North Sumatera	Bengkulu	South Sumatera	Riau	Bangka		Kalimantan		Total Indonesia		Malaysia		UK		Total
	$000	$000	$000	$000	$000		$000		$000		$000		$000		$000
Year to 31 December 2016 (audited)
Total sales revenue (all external)
-     CPO, palm kernel and FFB	88,465	86,564	3	40,169	27		24,342		239,570		3,450		-		243,020
-     Rubber	1,149	-	-	-	-		-		1,149		-		-		1,149
-     Shell nuts	628	736	1	205	-		147		1,717		-		-		1,717
-     Biomass products	324	-	-	-	-		-		324		-		-		324
Total revenue	90,566	87,300	4	40,374	27		24,489		242,760		3,450		-		246,210
Profit / (loss) before tax	23,219	24,785	(4,695)	12,861	(602)		1,623		57,191		296		(24)		57,463
BA movement	628	1,421	144	653	2		431		3,279		104		-		3,383
Profit / (loss) for the period before tax per consolidated income statement	23,847	26,206	(4,551)	13,514	(600)		2,054		60,470		400		(24)		60,846
Depreciation	(4,029)	(4,096)	(2,505)	(898)	(85)		(3,414)		(15,027)		(650)		-		(15,677)
Impairment losses	-	-	693	-	(335)		(3,098)		(2,740)		-		-		(2,740)
Inter-segment transactions	3,828	(2,117)	(767)	(609)	-		(1,334)		(999)		604		395		-
Income tax	(9,275)	(5,744)	3,410	(4,531)	90		644		(15,406)		(81)		(1,378)		(16,865)
Total assets	175,332	129,428	54,280	41,887	11,732		103,906		516,565		20,944		3,587		541,096
Non-current assets	101,843	76,048	52,862	20,044	11,520		94,974		357,291		16,263		578		374,132
Non-current assets - additions	7,956	5,544	2,638	857	657		12,771		30,423		61		-		30,484

In the 6 months to 30 June 2017, revenues from 4 customers of the Indonesian segment represent approximately $78.5m (1H 2016: $47.6m) of the Group's total revenues. In the year of 2016, revenues from 4 customers of the Indonesian segment represent approximately $114.1m of the Group's total revenues. An analysis of these revenues is provided below. Although Customer 1 to 2 are over 10% of the Group's total revenue, there is no over reliance on these Customers as tenders are performed on a monthly basis. Two of the top four customers are the same as in the year to 31 December 2016.

	2017		2016		2016
	6 months		6 months		Year
	to 30 June		to 30 June		to 31 December
	(unaudited)		(unaudited)		(audited)
	$m	%	$m	%	$m	%
Major Customers
Customer 1	28.2	19.2	16.9	19.6	39.1	15.9
Customer 2	23.3	15.9	13.6	15.8	27.0	11.0
Customer 3	14.6	9.9	10.7	12.4	24.2	9.9
Customer 4	12.4	8.4	6.4	7.5	23.8	9.7
Total	78.5	53.4	47.6	55.3	114.1	46.5

6.         Tax expense

	2017	2016	2016
	6 months	6 months	Year
	to 30 June	to 30 June	to 31 December
	(unaudited)	(unaudited & restated)	(audited)
	$000	$000	$000
Foreign corporation tax - current year	11,049	7,963	20,438
Foreign corporation tax - prior year	-	-	(30)
Deferred tax adjustment - current year	(2,700)	(1,671)	(3,543)
	8,349	6,292	16,865

7.         Dividend

The final and only dividend in respect of 2016, amounting to 3.0p per share, or $1,515,140 was paid on 14 July 2017 (2015: 1.75p per share, or $1,002,785, paid on 11 July 2016). As in previous years no interim dividend has been declared.

8.         Earnings per ordinary share (EPS)

	2017	2016	2016
	6 months	6 months	Year
	to 30 June	to 30 June	to 31 December
	(unaudited)	(unaudited & restated)	(audited)
	$000	$000	$000
Profit for the year attributable to owners of the Company before BA movement	18,328	5,940	32,563
BA movement	(109)	2,104	2,150
Earnings used in basic and diluted EPS	18,219	8,044	34,713
	Number	Number	Number
	'000	'000	'000
Weighted average number of shares in issue in period
-  used in basic EPS	39,636	39,636	39,636
-  dilutive effect of outstanding share options	33	-	-
-  used in diluted EPS	39,669	39,636	39,636
Basic EPS before BA movement	46.24cts	14.99cts	82.16cts
Basic EPS after BA movement	45.97cts	20.29cts	87.58cts
Dilutive EPS before BA movement	46.20cts	14.99cts	82.16cts
Dilutive EPS after BA movement	45.93cts	20.29cts	87.58cts

9.         Fair value measurement of financial instruments

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

	2017		2016			2016
	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	578	424	578	424		578	424
Due from cooperatives under Plasma scheme	4,670	4,394	2,987	2,843		3,313	2,973
	5,248	4,818	3,565	3,267		3,891	3,397
Borrowings due after one year
Long term loan	24,000	23,349	31,234	31,387		27,875	27,208

Financial instruments not measured at fair value includes 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 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% (1H 2016 and 2016: 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 5.56% (1H 2016: 5.57%, 2016: 5.56%)	Discount rate	The higher the discount rate, the lower the fair value
Borrowings due after one year
Long term loan	Based on cash flows discounted using an estimated current lending rate of 5.56% (1H 2016: 5.57%, 2016: 5.56%)	Discount rate	The higher the discount rate, the lower the fair value

10.       Report and financial information

Copies of the interim report for the Group for the period ended 30 June 2017 are available on the AEP website at www.angloeastern.co.uk.

 

END

 

 

IR LLFLITVIVFID