Half-yearly report - Interim results for the s...
M.P. EVANS GROUP PLC
M.P. Evans Group PLC, a producer of Indonesian palm oil and Australian beef
cattle, announces its interim results for the six months ended 30 June 2009.
Financials
* Profit after tax US$9.35 million (2008 US$29.58 million)
* Interim dividend maintained at 2.00p per share
* Earnings per share US cents 14.77 (2008 US cents 23.12) on
continuing operations
* Reduction in profits attributable to non-recurrence of 2008
Malaysian estate sales, lower palm-oil prices and an exceptional
charge
Indonesian palm oil
* Although the palm-oil price has now fallen markedly from peak levels
recorded last year, it continues to trade at historically-
strong levels
* Total oil-palm plantings on new Indonesian projects now 11,100
hectares; estimated to be 13,000 hectares by year end. 2,500 of
these relate to smallholders' co-operatives
Australian beef cattle
* Australian operations recorded reduced losses of US$0.25 million
(2008 US$0.31 million)
* Woodlands continues to be marketed for sale, whilst opportunities
for further NAPCo share purchases sought
Malaysian and Thai property and asset disposals
* Thai rubber factory recently sold for US$2.20 million. US$50 million
worth of Malaysian assets remain to be sold
Commenting on the results, the chairman, Richard Robinow, said:-
"Although a lower profit was recorded this year, palm-oil prices remain at
healthy levels and the long-term outlook for both palm oil and cattle appears
bright in view of ever-increasing demand for food from the world's growing
economies. Satisfactory progress continues to be achieved on the Group's new
oil-palm projects."
Enquires:
M.P. Evans Group PLC 020 7796 4133 on 21 September only
Thereafter telephone 01892 516333
Philip Fletcher Joint managing director
Peter Hadsley-Chaplin Joint managing director
Hudson Sandler 020 7796 4133
James White/Hugo Jenkins
An analysts' meeting will be held today at 9:30 a.m. at the offices of Hudson
Sandler, 29 Cloth Fair, London EC1A 7NN
INTERIM REVIEW
A profit after tax of US$9.35 million was recorded for the six months ended 30
June 2009, compared with a profit of US$29.58 million for the first half of
2008. The decrease was attributable to a number of factors. The first half of
2008 included the profit of US$15.01 million from the sale of Malaysian estates.
In addition, there were significantly-lower palm-oil prices and the Group
incurred an exceptional charge. In Australia, a lower loss than last year was
recorded on the Group's beef-cattle operations. As last year, the board proposes
that an interim dividend of 2 pence per share will be paid.
STRATEGIC DEVELOPMENTS, INCLUDING NEW PROJECTS
New Indonesian palm-oil projects
Progress continues to be made in the clearing and planting up of the Group's new
Indonesian projects. As at the date of this report, a total of 11,100 hectares
have been planted; 8,300 in Kalimantan and 2,800 on Bangka Island. Of these
areas, it has recently been agreed that 2,080 hectares (1,400 in Kalimantan and
680 on Bangka) will be sold at cost to the local smallholder co-operative
schemes. The board believes that this will help to enhance local community
relations and accelerate the rate at which land is released for development.
Further details about this are set out below and in note 3.
Australian beef-cattle activities
The Woodlands aggregation continues to be marketed for sale. Recent expressions
of interest have been made but so far no firm offer has been received. The
Group's share of The North Australian Pastoral Company Pty. Limited ("NAPCo")
remains at 34.37% but consideration will be given to the acquisition of further
shares as and when suitable opportunities arise.
Divestment from Malaysia and Thailand
By 2008, the programme of disposing of the Group's Malaysian plantations, in
order to help to fund its expansion into Indonesia and Australia, had been
substantially completed with five out of the six original estates sold. In July
2009, the Group's small Thai rubber manufacturing business was sold. This
transaction will be recorded in the second half of 2009. This now leaves
approximately US$50 million worth of the Group's Malaysian assets to be sold,
the bulk of which comprises the Group's 40% share of Bertam Properties Sdn.
Berhad ("Bertam Properties") and the 74-hectare Bertam Estate.
The palm-oil market
After the considerable price fluctuations in the vegetable-oil market in 2008,
which saw palm oil briefly soar to a record high of nearly US$1,400 per tonne in
the first half before declining to a low of US$430 per tonne towards the year
end, the market has generally edged higher again to trade in a range of US$600 -
800 per tonne and is currently around US$700 per tonne - significantly above the
historical average. The market continues to be driven by growing demand for
cooking oil from China and India in particular, as well as by some biofuel-
related demand.
The beef-cattle market
Australian prices for grass-fed, lighter-weight cattle (such as those produced
by Woodlands) were, as ever, influenced by seasonal conditions, trading largely
higher from late January onwards in response to the widespread rainfall and
easing back more recently as the weather has become drier. Domestic prices for
the heavier, "grain-finished" cattle, such as those produced by NAPCo, similarly
started to move higher from late January/early February and have remained quite
buoyant since then. However, there has been a slight softening of export prices
following the strengthening of the Australian Dollar.
RESULTS FOR THE PERIOD
MAJORITY-OWNED OPERATIONS
Indonesia
As referred to above, palm-oil prices were at very robust levels in the first
half of 2008, averaging US$1,166/tonne (Rotterdam cif). It could not be expected
that these would be sustained. Although the average price for the first half of
2009 was markedly lower, at US$656 per tonne, this still represents a
historically-high level.
The crop of oil-palm fresh fruit bunches ("f.f.b.") was some 6% higher from the
North Sumatran estates than for the same period last year and, for the first
time, crop was harvested on the new Bangka project (4,100 tonnes). It should be
noted, however, that, as referred to below in note 3), some of the Bangka areas
have been, and will be, sold to one or more of the co-operative schemes attached
to the project. The proceeds from the sale of the f.f.b. harvested from these
areas will be treated as income by the Company until such time as the sale of
these pieces of land to the co-operatives is completed.
Improvement in the palm-oil extraction rate continued. Over 22% was achieved
compared with around 21% for the same period last year. The collection of high
oil-yielding loose fruit and ripeness standards have both been focussed on and
improved.
Costs, mainly fertiliser and fuel, which had increased sharply in 2008, fell
back in 2009. However, the deferral of fertiliser applications (which were
originally scheduled for late 2008) into early 2009 as a result of wet weather,
and the restoration of maintenance standards following the resolution of the
strike in 2008, meant that upkeep costs, in US-Dollar terms, were similar to
those for the first six months of 2008.
As a result of the above, the gross profit from the majority-owned Indonesian
estates amounted to US$5,459,000 compared with the unusually high level of
US$10,013,000 achieved in the first half of 2008.
Crop, production and selling-price details for the majority-owned estates are
set out in the table below:-
6 months 6 months Year
ended ended ended
30 June 30 June 31 December
2009 2008 2008
Tonnes Tonnes Tonnes
1) Crops - oil-palm fresh
fruit bunches ("f.f.b.")
Indonesia * 76,700 68,300 144,700
------- ------- -------
Malaysia
- continuing operations 700 700 2,100
- discontinued operations - 11,200 14,800
------- ------- -------
- total Malaysia 700 11,900 16,900
------- ------- -------
Total 77,400 80,200 161,600
------- ------- -------
2) Production
- Indonesia (Pangkatan mill)
Crude palm oil 12,200 10,400 22,300
Palm kernels 3,100 2,900 6,100
------- ------- -------
3) Extraction rate % % %
Crude palm oil 22.29 20.99 21.06
Palm kernels 5.69 5.80 5.79
------- ------- -------
4) Selling prices
Palm oil - Rotterdam cif
- average per tonne US$656 US$1,166 US$941
------- ------- -------
* Including Simpang Kiri Estate's 17,700 tonnes (30 June 2008 18,800
tonnes and 31 December 2008 38,700 tonnes) and the Bangka project's
4,100 tonnes (30 June and 31 December 2008 - nil)
Australia
The loss from the cattle-fattening and cropping activities of the Woodlands
aggregation amounted to US$245,000 for the first half of 2009 compared with
US$308,000 for the same period last year. Favourable rains in late 2008 and
early 2009 resulted in abundant pastures and forage crops and over 6,000 head of
cattle were grazed on the property in the first half of the year. At 30 June
2009, Woodlands' own herd consisted of some 3,400 head and 1,800 of NAPCo's
cattle were on the property being fattened on a contract, per kg, basis.
In the first half of 2009, 1,750 steers were purchased (compared with some 1,050
for the same period last year) but fewer sales were made as the cattle were held
back to take advantage of the feed available. A weakening price meant that both
the average price of sales and the valuation of the closing stock were slightly
lower for the first half of 2009 than for the same period in 2008. As a result,
the profit from cattle-trading activities was lower than for the same period
last year.
The beneficial rains received at the end of 2008 and early in 2009 were not
ideal for sorghum planting, some of which was planted late and was not harvested
until after the period end. In addition, sorghum prices fell sharply from the
very high prices achieved in the first half of 2008.
Overall, the loss on Woodlands' activities was similar, in Australian-Dollar
terms, in the first half of 2009 to that for the first half of 2008. However,
the strengthening of the average exchange rate for the period to US$1 = A$1.41
from A$1.08 for the first half of 2008 reduced the loss in 2009 in US-Dollar
terms.
Malaysia and Thailand
The only remaining majority-owned activities in Malaysia relate to the small,74-
hectare, Bertam Estate. It is proposed that this valuable piece of land will be
disposed of when property market conditions are deemed suitable.
The wholly-owned subsidiary company owning the Thai rubber factory, Supara Co.
Limited, was sold in July 2009 for RM7.85 million (approximately US$2.20
million). 50% of the consideration for the sale has been received and the
remainder is contracted to be paid before the end of November 2009. The results
of the Thai operations for the six months ended 30 June 2009 (and comparative
figures) have been treated as "Discontinued operations".
Gross profit
As a result of all of the above, the gross profit for the first half of 2009 was
US$5,190,000 compared with US$9,622,000 for the same period last year and
US$13,834,000 for the whole of 2008. The following table sets out an analysis of
the gross profit/loss) between the various activities and between the countries
in which the Group operates:-
Six months ended 30 June 2009
Biological
Cost of bearer-asset Gross
Revenue sales adjustment profit/(loss)
US$'000 US$'000 US$'000 US$'000
Plantations
Indonesia 10,896 (5,591) 154 5,459
Malaysia 242 (288) - (46)
------ ------ ------ ------
Total plantations 11,138 (5,879) 154 5,413
Cattle - Australia 760 (1,005) - (245)
Other - UK 22 - - 22
------ ------ ------ ------
Group total 11,920 (6,884) 154 5,190
------ ------ ------ ------
Six months ended 30 June 2008
Plantations
Indonesia 15,563 (5,635) 85 10,013
Malaysia 285 (380) - (95)
------ ------ ------ ------
Total plantations 15,848 (6,015) 85 9,918
Cattle - Australia 1,750 (2,058) - (308)
Other - UK 12 - - 12
------ ------ ------ ------
Group total 17,610 (8,073) 85 9,622
------ ------ ------ ------
Year ended 31 December 2008
Plantations
Indonesia 25,205 (10,518) 206 14,893
Malaysia 630 (762) - (132)
------ ------ ------ ------
Total plantations 25,835 (11,280) 206 14,761
Cattle - Australia 4,504 (5,479) - (975)
Other - UK 48 - - 48
------ ------ ------ ------
Group total 30,387 (16,759) 206 13,834
------ ------ ------ ------
BIOLOGICAL BEARER-ASSET ADJUSTMENT
The value of the biological bearer assets (oil palms) increased by US$14,500,000
(gross), partly resulting from the continuing increase in the price of palm oil
and kernels used in the calculation of the biological value and also reflecting
the development of new plantings on the projects in Kalimantan and Bangka. These
benefits were limited by the increase in costs used in the calculation of the
biological value. The effect on the biological bearer-asset value arising from
the proposed sale of planted land to the co-operative schemes on the new
projects is referred to in more detail below and in note 3.
Movements in the value of biological assets from one period to the next are
reflected in the consolidated income statement. In order to provide additional
information to readers of the accounts, the consolidated income statement and
balance sheet include additional columns to show the Group's results and assets
prior to the adjustments for biological bearer assets. Further information about
biological assets is set out in note 6.
ASSOCIATED COMPANIES
Indonesia
The Group's share of its Indonesian associated companies' post-tax profits for
the period, compared with that for the first half, and for the whole, of 2008,
was as follows:-
Six months ended 30 June 2009
Post-tax Post-tax
profit before profit after
biological Biological biological
bearer-asset bearer-asset bearer-asset
adjustment adjustment adjustment
US$'000 US$'000 US$'000
PT Agro Muko (31.53%) 1,299 1,652 2,951
PT Kerasaan Indonesia (38.00%) 622 207 829
------ ------ ------
1,921 1,859 3,780
------ ------ ------
Six months ended 30 June 2008
PT Agro Muko (31.53%) 5,985 1,867 7,852
PT Kerasaan Indonesia (38.00%) 1,189 800 1,989
------ ------ ------
7,174 2,667 9,841
------ ------ ------
Year ended 31 December 2008
PT Agro Muko (31.53%) 8,049 361 8,410
PT Kerasaan Indonesia (38.00%) 1,588 (132) 1,456
------ ------ ------
9,637 229 9,866
------ ------ ------
Crops and production were as follows:-
6 months 6 months Year
ended ended ended
30 June 30 June 31 December
2009 2008 2008
Tonnes Tonnes Tonnes
Crops - f.f.b.
PT Agro Muko - own 144,400 154,100 300,600
- outgrowers 5,400 4,100 13,500
PT Kerasaan Indonesia 24,100 23,200 49,800
-------- -------- --------
173,900 181,400 363,900
-------- -------- --------
Production
(PT Agro Muko) - crude palm oil 34,400 35,600 68,000
- palm kernels 7,900 7,800 15,400
-------- -------- --------
% % %
Extraction rate - crude palm oil 22.93 22.14 21.66
- palm kernals 5.25 4.86 4.90
------- ------- -------
Tonnes Tonnes Tonnes
Rubber crops
(PT Agro Muko) - own 736 950 1,498
- outgrowers - 210 332
-------- -------- --------
736 1,160 1,830
-------- -------- --------
As with the majority-owned estates, the estates owned by the associated
companies experienced the effect of lower palm-oil prices in the first half of
2009 when compared with the exceptional levels seen in the same period last
year. Kerasaan Estate's f.f.b. crop was slightly ahead of the first half of 2008
but PT Agro Muko experienced a marked downturn in the first part of the year.
This was a cyclical downturn which was exacerbated by a particularly wet period
at the end of 2008. Crops have, however, now started to recover. The rubber
crop, as expected, has continued to decline whilst the replanting programme gets
under way. Unusually wet weather also affected tapping.
Rubber prices started the year at low levels reflecting the difficulties being
encountered in the automotive industry. However, following increased activity in
this sector in Asia, particularly in China, prices have since improved.
Australia
The Group's share of NAPCo's post-tax loss for the period, compared with that
for the first half, and for the whole, of 2008, is set out below:-
6 months 6 months Year
ended ended ended
30 June 30 June 31 December
2009 2008 2008
US$'000 US$'000 US$'000
NAPCo (34.37%) (June 2008 - 29.64%) (980) (1,722) (1,264)
------ ------ ------
Following the very severe drought in 2008, all NAPCo properties received
substantial rainfall at the beginning of 2009. A significant body of feed was
grown across all of the stations. For the first time in many years, this allowed
all weaners to be transferred from breeder properties to grower properties, not
requiring any of these cattle to be held back.
Total revenue for the first six months of 2009 was sharply lower than for the
first half of 2008, with fewer cattle being sold, as the company rebuilds stock
numbers to previous levels. During 2008, the company was forced to sell
significantly more cattle than budgeted, the final full-year figure being some
96,500 head.
The valuation of NAPCo's herd at 30 June 2009 gave rise to a fall of A$5.07
million compared with the valuation at 31 December 2008 and this is reflected in
the income statement. The corresponding fall in value in the first half of 2008
was A$17.22 million. The diminution in value reflects both a decrease in the
size of the herd during the six months to 30 June 2009 and Australian-Dollar
live-weight prices having dropped in excess of 10% during this time.
Overall, the lower income and lower costs in the first half of 2009 resulted in
a reduction, in Australian-Dollar terms, in the loss incurred compared with the
first half of 2008. The loss was further reduced in US-Dollar terms as a result
of the strengthening of the US Dollar versus the Australian Dollar. The recovery
from the exceptionally dry conditions experienced in 2008 will take a little
time to manifest itself in the reported results, as the herd is rebuilt.
In August 2009, the smallest of NAPCo's Channel Country growing-out properties,
Roxborough, which was surplus to requirements, was sold. The sales proceeds were
A$7.25 million, approximately US$6.30 million at the current rate of exchange.
Malaysia
The Group's share of Bertam Properties` (40% owned) post-tax profit and estate
crop for the period, compared with that for the first half, and for the whole,
of 2008 is set out below:-
6 months 6 months Year
ended ended ended
30 June 30 June 31 December
2009 2008 2008
US$'000 US$'000 US$'000
Post-tax profit 237 947 3,528
------ ------ ------
Tonnes Tonnes Tonnes
Estate crop - f.f.b. 2,200 2,600 4,800
------ ------ ------
Unlike in the previous two years, no land sales were completed in the first half
of the year, although a number of discussions which are likely to result in
sales are under way.
Development activities continued successfully in the first half of the year. As
the Group's areas diminish through development or outright sale, the area under
oil palms similarly falls and the f.f.b. crop with it. In spite of lower palm-
oil prices, oil-palm activities remain profitable.
EXCEPTIONAL CHARGE
As referred to earlier, it has been decided to sell land which has already been
developed by the Group to the co-operatives attached to the new projects in
Kalimantan and Bangka. The amount at which the land can be sold in this way is
governed by Indonesian regulations but broadly equates to the cost incurred by
the Group. This, however, does not include gains in value introduced under the
application of IAS41. The land in question amounted to around 1,750 hectares at
30 June 2009. On the sale of these areas to the co-operatives, the revaluations,
amounting to US$1,987,000, had to be reversed and this reversal has been treated
as an exceptional charge. At the point that bank finance is provided to the co-
operatives, the amounts due in respect of the land sold or to be sold to the co-
operatives (approximately US$5.00 million as at 30 June 2009) will be repaid to
the Group.
FINANCE COSTS
Finance costs relate to the Group's borrowings for its Australian cattle
operation. Australian interest rates were markedly lower in the first half of
2009. The reduced cost of US$560,000, compared with US$1,096,000 for the same
period last year, reflected both the lower interest rate and a weaker Australian
Dollar.
BOARD CHANGES
A number of changes within the board are planned with effect from 1 January
2010. Richard Robinow will stand down from his position as non-executive
chairman but will remain on the board as a non-executive director.Peter Hadsley-
Chaplin, currently joint managing director, will assume the role of chairman,
acting in a part-time executive capacity, devoting approximately 60% of his time
to the Group's affairs. He will continue to take prime responsibility for the
Australian side of the business and to focus on Group strategy and investor
relations. Philip Fletcher, currently joint managing and finance director, will
assume the role of Group managing director with prime responsibility for both
the existing and new projects in Indonesia but also acting in a supporting role
with regard to the Australian activities. He will relinquish his position as
finance director.
The board is pleased to announce that, also on 1 January 2010, Tristan Price,
currently Group finance controller, will be appointed as finance director. Mr
Price, who is 42, joined the Group in December 2006. He qualified as a Chartered
Accountant with Coopers & Lybrand after which he worked as an economist with the
Organisation for Economic Co-operation and Development (OECD) and then latterly
as head of financial planning and policy at the Foreign & Commonwealth Office.
PROSPECTS
Palm oil continues to trade around US$700 per tonne as vegetable-oil prices
generally remain at healthy levels. Although an unusually large US soybean crop
is in prospect, this will not necessarily be sufficient to compensate for the
significant declines in South American exports following the poor harvests
there. As in the past, for seasonal reasons, the Group's Indonesian f.f.b. crops
are expected to be higher in the second half of the year than the first.
Development and planting work on the Group's two new Indonesian oil-palm
projects continue apace and, by the end of 2009, it is expected that a total of
approximately 13,000 hectares will have been planted, of which some 2,500
hectares will have been, or will in the future be, allocated to the smallholder
co-operative schemes referred to earlier.
As referred to under "The beef-cattle market" above, cattle prices have tapered
off a little following the onset of drier seasonal conditions and, in the case
of grain-finished cattle, as a result of the strengthening Australian Dollar.
Longer term, the outlook appears positive.
In view of, primarily, the lower palm-oil price and the absence of Malaysian
estates sales, the board anticipates a reduced operating profit for 2009
compared with 2008.
21 September 2009
UNAUDITED CONSOLIDATED INCOME STATEMENT
For the six months ended 30 June 2009
Result before 6 months
biological Biological ended
bearer-asset bearer-asset 30 June
adjustment adjustment 2009
US$'000 US$'000 US$'000
Revenue 11,920 - 11,920
Cost of sales (6,884) 154 (6,730)
------ ------ ------
Gross profit 5,036 154 5,190
Gain on biological assets - 14,500 14,500
Planting expenditure - (5,300) (5,300)
Foreign-exchange losses (159) - (159)
Other administrative expenses (3,032) - (3,032)
------ ------ ------
Group operating profit 1,845 9,354 11,199
Exceptional credit/(charge)(note 3) 12 (1,987) (1,975)
------ ------ ------
Profit on ordinary activities
before interest 1,857 7,367 9,224
Investment revenue 463 - 463
Finance costs (560) - (560)
------ ------ ------
Group-controlled profit before
taxation 1,760 7,367 9,127
Tax charge on profit on ordinary
activities (2,030) (776) (2,806)
------ ------ ------
Group-controlled (loss)/profit
after taxation (270) 6,591 6,321
Share of associated companies'
profit after tax 1,178 1,859 3,037
------ ------ ------
Profit after tax before
discontinued operations 908 8,450 9,358
Discontinued operations (note 4) (4) - (4)
------ ------ ------
Profit after tax 904 8,450 9,354
------ ------ ------
Attributable to:
Equity holders of
M.P. Evans Group PLC 144 7,600 7,744
Minority interests 760 850 1,610
------ ------ ------
904 8,450 9,354
------ ------ ------
US Cents
Basic earnings per 10p share
Continuing operations 14.77
Continuing and discontinued operations 14.83
------
Diluted earnings per 10p share
Continuing operations 14.36
Continuing and discontinued operations 14.42
------
UNAUDITED CONSOLIDATED INCOME STATEMENT
For the six months ended 30 June 2008
Result before 6 months
biological Biological ended
bearer-asset bearer-asset 30 June
adjustment adjustment 2008
US$'000 US$'000 US$'000
Revenue 17,610 - 17,610
Cost of sales (8,073) 85 (7,988)
------ ------ ------
Gross profit 9,537 85 9,622
Gain on biological assets - 9,728 9,728
Planting expenditure - (4,561) (4,561)
Foreign-exchange losses (697) - (697)
Other administrative expenses (3,011) - (3,011)
------ ------ ------
Group operating profit 5,829 5,252 11,081
Exceptional credit (note 3) 183 - 183
------ ------ ------
Profit on ordinary activities
before interest 6,012 5,252 11,264
Investment revenue 630 - 630
Finance costs (1,096) - (1,096)
------ ------ ------
Group-controlled profit before
taxation 5,546 5,252 10,798
Tax charge on profit on ordinary
activities (3,792) (1,498) (5,290)
------ ------ ------
Group-controlled profit after
taxation 1,754 3,754 5,508
Share of associated companies'
profit after tax 6,400 2,666 9,066
------ ------ ------
Profit after tax before
discontinued operations 8,154 6,420 14,574
Discontinued operations (note 4) 16,980 (1,971) 15,009
------ ------ ------
Profit after tax 25,134 4,449 29,583
------ ------ ------
Attributable to:
Equity holders of
M.P. Evans Group PLC 23,070 3,567 26,637
Minority interests 2,064 882 2,946
------ ------ ------
25,134 4,449 29,583
------ ------ ------
US Cents
Basic earnings per 10p share
Continuing operations 23.12
Continuing and discontinued operations 51.53
------
Diluted earnings per 10p share
Continuing operations 22.29
Continuing and discontinued operations 49.68
------
UNAUDITED CONSOLIDATED INCOME STATEMENT
For the year ended 31 December 2008
Result before Year
biological Biological ended
bearer-asset bearer-asset 31 December
adjustment adjustment 2008
US$'000 US$'000 US$'000
Revenue 30,387 - 30,387
Cost of sales (16,759) 206 (16,553)
------ ------ ------
Gross profit 13,628 206 13,834
Gain on biological assets - 24,226 24,226
Planting expenditure - (13,283) (13,283)
Foreign-exchange gains 44 - 44
Other administrative expenses (4,182) - (4,182)
------ ------ ------
Group operating profit 9,490 11,149 20,639
Exceptional credit (note 3) 3,900 - 3,900
------ ------ ------
Profit on ordinary activities
before interest 13,390 11,149 24,539
Investment revenue 1,295 - 1,295
Finance costs (2,387) - (2,387)
------ ------ ------
Group-controlled profit before
taxation 12,298 11,149 23,447
Tax charge on profit on ordinary
activities (4,181) (2,309) (6,490)
------ ------ ------
Group-controlled profit after
taxation 8,117 8,840 16,957
Share of associated companies'
profit after tax 11,901 229 12,130
------ ------ ------
Profit after tax before
discontinued operations 20,018 9,069 29,087
Discontinued operations (note 4) 29,895 (5,386) 24,509
------ ------ ------
Profit after tax 49,913 3,683 53,596
------ ------ ------
Attributable to:
Equity holders of
M.P. Evans Group PLC 47,885 1,904 49,789
Minority interests 2,028 1,779 3,807
------ ------ ------
49,913 3,683 53,596
------ ------ ------
US Cents
Basic earnings per 10p share
Continuing operations 48.88
Continuing and discontinued operations 96.26
------
Diluted earnings per 10p share
Continuing operations 47.30
Continuing and discontinued operations 93.16
------
UNAUDITED CONSOLIDATED BALANCE SHEET
AT 30 JUNE 2009
Before
biological Biological
bearer-asset bearer-asset 30 June
adjustment adjustment 2009
US$'000 US$'000 US$'000
Non-current assets
Intangible assets - goodwill 1,157 - 1,157
------- ------- -------
Biological assets (note 6) - 87,339 87,339
Property, plant and equipment 86,898 (32,823) 54,075
Investments 82,131 21,870 104,001
Deferred tax asset 1,766 - 1,766
------- ------- -------
170,795 76,386 247,181
------- ------- -------
Current assets
Assets held for sale 262 - 262
Biological assets 3,363 - 3,363
Inventories 10,731 - 10,731
Trade and other receivables 11,373 - 11,373
Current tax asset 687 - 687
Cash and cash equivalents 46,106 - 46,106
------- ------- -------
72,522 - 72,522
------- ------- -------
Total assets 244,474 76,386 320,860
------- ------- -------
Current liabilities
Liabilities relating to assets
held for sale 37 - 37
Bank loans and overdrafts 19,960 - 19,960
Trade and other payables 8,460 - 8,460
Current tax liability 346 - 346
------- ------- -------
28,803 - 28,803
------- ------- -------
------- ------- -------
Net current assets 43,719 - 43,719
------- ------- -------
Non-current liabilities
Borrowings 2,000 - 2,000
Deferred tax liability 2,216 13,556 15,772
Long-term provisions 1,597 - 1,597
------- ------- -------
5,813 13,556 19,369
------- ------- -------
Total liabilities 34,616 13,556 48,172
------- ------- -------
------- ------- -------
Net assets 209,858 62,830 272,688
------- ------- -------
Equity
Share capital (note 7) 8,817 - 8,817
Other reserves 60,090 21,869 81,959
Profit and loss account 137,487 31,692 169,179
------- ------- -------
Equity attributable to members of
M.P. Evans Group PLC (note 8) 206,394 53,561 259,955
Minority interest 3,464 9,269 12,733
------- ------- -------
Total equity 209,858 62,830 272,688
------- ------- -------
UNAUDITED CONSOLIDATED BALANCE SHEET
AT 30 JUNE 2008
Before
biological Biological
bearer-asset bearer-asset 30 June
adjustment adjustment 2008
US$'000 US$'000 US$'000
Non-current assets
Intangible assets - goodwill 1,008 - 1,008
------- ------- -------
Biological assets (note 6) - 64,281 64,281
Property, plant and equipment 78,910 (22,177) 56,733
Investments 94,475 22,448 116,923
Deferred tax asset 1,195 - 1,195
------- ------- -------
174,580 64,552 239,132
------- ------- -------
Current assets
Assets held for sale 7,625 4,878 12,503
Biological assets 4,054 - 4,054
Inventories 9,946 - 9,946
Trade and other receivables 5,330 - 5,330
Current tax asset 826 - 826
Cash and cash equivalents 50,745 - 50,745
------- ------- -------
78,526 4,878 83,404
------- ------- -------
Total assets 254,114 69,430 323,544
------- ------- -------
Current liabilities
Liabilities relating to assets
held for sale - 1,464 1,464
Bank loans and overdrafts 23,798 - 23,798
Trade and other payables 12,166 - 12,166
Current tax liability 2,308 - 2,308
------- ------- -------
38,272 1,464 39,736
------- ------- -------
------- ------- -------
Net current assets 40,254 3,414 43,668
------- ------- -------
Non-current liabilities
Borrowings 2,000 - 2,000
Deferred tax liability 1,637 12,631 14,268
Long-term provisions 1,467 - 1,467
------- ------- -------
5,104 12,631 17,735
------- ------- -------
Total liabilities 43,376 14,095 57,471
------- ------- -------
------- ------- -------
Net assets 210,738 55,335 266,073
------- ------- -------
Equity
Share capital (note 7) 8,733 - 8,733
Other reserves 84,199 22,448 106,647
Profit and loss account 111,563 25,365 136,928
------- ------- -------
Equity attributable to members of
M.P. Evans Group PLC (note 8) 204,495 47,813 252,308
Minority interest 6,243 7,522 13,765
------- ------- -------
Total equity 210,738 55,335 266,073
------- ------- -------
UNAUDITED CONSOLIDATED BALANCE SHEET
AT 31 DECEMBER 2008
Before
biological Biological
bearer-asset bearer-asset 31 December
adjustment adjustment 2008
US$'000 US$'000 US$'000
Non-current assets
Intangible assets - goodwill 1,157 - 1,157
------- ------- -------
Biological assets (note 6) - 78,779 78,779
Property, plant and equipment 77,973 (30,519) 47,454
Investments 80,913 20,010 100,923
Deferred tax asset 2,334 - 2,334
------- ------- -------
161,220 68,270 229,490
------- ------- -------
Current assets
Assets held for sale 275 - 275
Biological assets 1,872 - 1,872
Inventories 10,292 - 10,292
Trade and other receivables 5,176 - 5,176
Current tax asset 933 - 933
Cash and cash equivalents 56,472 - 56,472
------- ------- -------
75,020 - 75,020
------- ------- -------
Total assets 237,397 68,270 305,667
------- ------- -------
Current liabilities
Liabilities relating to assets
held for sale 109 - 109
Bank loans and overdrafts 18,986 - 18,986
Trade and other payables 5,238 - 5,238
Current tax liability 1,510 - 1,510
------- ------- -------
25,843 - 25,843
------- ------- -------
------- ------- -------
Net current assets 49,177 - 49,177
------- ------- -------
Non-current liabilities
Borrowings 2,018 - 2,018
Deferred tax liability 1,612 13,442 15,054
Long-term provisions 1,377 - 1,377
------- ------- -------
5,007 13,442 18,449
------- ------- -------
Total liabilities 30,850 13,442 44,292
------- ------- -------
------- ------- -------
Net assets 206,547 54,828 261,375
------- ------- -------
Equity
Share capital (note 7) 8,812 - 8,812
Other reserves 60,111 20,010 80,121
Profit and loss account 133,846 26,399 160,245
------- ------- -------
Equity attributable to members of
M.P. Evans Group PLC (note 8) 202,769 46,409 249,178
Minority interest 3,778 8,419 12,197
------- ------- -------
Total equity 206,547 54,828 261,375
------- ------- -------
UNAUDITED CONSOLIDATED CASH-FLOW STATEMENT
For the six months ended 30 June 2009
6 months 6 months Year
ended ended ended
30 June 30 June 31 December
2009 2008 2008
US$'000 US$'000 US$'000
Net cash from operating
activities (note 9) (5,250) (3,218) (21,724)
------- ------- -------
Investing activities
Interest received 365 670 1,267
Dividends from associated
undertakings 5,709 8,276 17,266
Dividends from trading investments 99 113 283
Proceeds on disposal of property,
plant and equipment 430 24,720 50,570
Purchase of property, plant and
equipment (4,476) (2,451) (3,688)
Investment in subsidiary
undertaking - - (2,616)
Investment in associated
undertaking - (62) (5,475)
Disposal of subsidiary - - 145
------- ------- -------
Net cash generated by investing
activities 2,127 31,266 57,752
------- ------- -------
Financing activities
Dividends paid (note 5) (4,309) (5,144) (6,819)
Repayment of borrowings - - (575)
Proceeds on issue of shares (note 7) 52 53 280
Bank loans repaid (1,878) (2,681) -
Dividend paid to minorities (1,074) (1,131) (1,070)
------- ------- -------
Net cash used in financing
activities (7,209) (8,903) (8,184)
------- ------- -------
Net (decrease)/increase in cash
and cash equivalents (10,332) 19,145 27,844
Cash and cash equivalents at
beginning of the period 56,472 31,765 31,765
Effect of foreign exchange rates (34) (165) (3,137)
------- ------- -------
Cash and cash equivalents at
end of the period 46,106 50,745 56,472
------- ------- -------
NOTES TO THE INTERIM STATEMENTS
For the six months ended 30 June 2009
1. STATUTORY INFORMATION
The financial information for the six-month periods ended 30 June 2009 and
2008 has been neither audited nor reviewed by the Group's auditors and does
not constitute accounts within the meaning of section 240 of the Companies Act
1985. The financial information for the year ended 31 December 2008 is
abridged from the statutory accounts. The 31 December 2008 statutory accounts
have been filed with the Registrar of Companies. The report of the auditors
thereon was unqualified and did not contain a statement under section 237(2)
or (3) of the Companies Act 1985, nor did it contain any matters to which the
auditors drew attention without qualifying their audit report.
2. ACCOUNTING POLICIES
The consolidated financial results have been prepared in accordance with
International Financial Reported Standards (IFRS and IFRIC interpretations)
issued by the International Accounting Standards Board (IASB) as adopted by
the EU, and with those parts of the Companies Act 1985 applicable to companies
preparing accounts under IFRS.
The accounting policies of the Group follow those set out in the annual
financial statements at 31 December 2008.
3. EXCEPTIONAL (CHARGE)/CREDIT
6 months 6 months Year
ended ended ended
30 June 30 June 31 December
2009 2008 2008
US$'000 US$'000 US$'000
Continuing operations:
Write down of biological
bearer-asset value on land
sales to co-operatives (1,987) - -
Credit on purchase of share in
associated undertaking - - 3,707
Previously unrealised profit on
sale of land to an associated
undertaking released to the
income statement on the sale of
that land by the associated
undertaking to third parties 12 183 193
------ ------ ------
(1,975) 183 3,900
------ ------ ------
4 DISCONTINUED OPERATIONS
6 months 6 months Year
ended ended ended
30 June 30 June 31 December
2009 2008 2008
US$'000 US$'000 US$'000
Estates
(Loss)/profit after tax (4) 2,152 1,171
Profit after tax on sale of estates - 12,857 23,338
------ ------ ------
(4) 15,009 24,509
------ ------ ------
5. DIVIDENDS
6 months 6 months Year
ended ended ended
30 June 30 June 31 December
2009 2008 2008
US$'000 US$'000 US$'000
2007 final dividend - 5.00p
per 10p share - 5,144 5,144
2008 interim dividend - 2.00p
per 10p share - - 1,675
2008 final dividend - 5.00p
per 10p share 4,309 - -
------ ------ ------
4,309 5,144 6,819
------ ------ ------
Subsequent to 30 June 2009, the board has declared an interim dividend of 2.00p
per 10p share. The dividend will be paid on or after 4 November 2009 to those
shareholders on the register at the close of business on 9 October 2009.
6. BIOLOGICAL ASSETS
The Group values its plantation assets using a discounted cash flow over the
expected 25-year economic life of the asset. The discount rate used in this
valuation is 14%. The price of the f.f.b. crop is taken to be a 20-year average
based on actual selling prices or, where the plantation has its own mill, an
inference based on the widely-quoted commodity price for crude palm oil
delivered c.i.f. Rotterdam. The directors have concluded that using a 20-year
average provides their best estimate of prices to be achieved over the valuation
period.
The long-term average price and exchange rates used in determining the
valuations based on cash flows were as follows:
30 June 30 June 31 December
2009 2008 2008
Price of crude palm oil (US$/t,
cif Rotterdam) 492 474 486
Exchange rate (US$1 = Rupiah) 10,225 9,225 10,950
------ ------ ------
For palm oil, changes in the price assumption have a more than proportionate
impact on the valuation of oil-palm plantings.
7. SHARE CAPITAL
30 June 30 June 31 December
2009 2008 2008
Number of shares of 10p each
At 1 January 52,211,585 51,690,758 51,690,758
Issued 30,800 21,250 520,827
---------- ---------- ----------
At period end 52,242,385 51,712,008 52,211,585
---------- ---------- ----------
US$'000 US$'000 US$'000
At 1 January 8,812 8,728 8,728
Issued 5 5 84
------- ------- -------
At period end 8,817 8,733 8,812
------- ------- -------
During the period, 30,800 (2008 - 21,250) 10p shares were issued as a result of
the exercise of share options. Total cash proceeds received by the Company were
US$51,963 (2008 US$53,367).
8. RECONCILIATION OF MOVEMENTS IN SHAREHOLDERS' FUNDS
6 months 6 months Year
ended ended ended
30 June 30 June 31 December
2009 2008 2008
US$'000 US$'000 US$'000
Profit attributable to members
of the Company 7,744 26,637 49,789
Dividend (note 5) (4,309) (5,144) (6,819)
------- ------- -------
3,435 21,493 42,970
Issue of shares 52 53 1,412
Share-based payments 50 10 48
Other recognised gains and losses
relating to the period 7,240 7,340 (18,664)
------- ------- -------
Net addition to shareholders'
funds 10,777 28,896 25,766
Opening shareholders' funds 249,178 223,412 223,412
------- ------- -------
Closing shareholders' funds 259,955 252,308 249,178
------- ------- -------
9. ANALYSIS OF MOVEMENTS IN CASH FLOW
6 months 6 months Year
ended ended ended
30 June 30 June 31 December
2009 2008 2008
US$'000 US$'000 US$'000
Operating profit 11,113 10,860 22,582
Biological gain (15,325) (8,073) (23,205)
Goodwill - - (3,441)
Depreciation of property, plant
and equipment 1,182 1,130 2,058
Impairment - - 422
Past-service liabilities 115 94 220
Share-based payments 50 69 48
------- ------- -------
Operating cash flows before
movements in working capital (2,865) 4,080 (1,316)
Decrease/(increase) in inventories 54 (2) (861)
Increase in receivables (3,119) (10) (165)
Increase/(decrease) in payables 2,904 (1,453) (7,858)
------- ------- -------
Cash generated from operating
activities (3,026) 2,615 (10,200)
Income tax paid (1,664) (4,737) (9,467)
Interest paid (560) (1,096) (2,057)
------- ------- -------
Net cash from operating activities (5,250) (3,218) (21,724)
------- ------- -------
10. EXCHANGE RATES
6 months 6 months Year
ended ended ended
30 June 30 June 31 December
2009 2008 2008
US$1 = Indonesian Rupiah
- average 11,048 9,255 9,657
- period end 10,225 9,225 10,950
------ ------ ------
US$1 = Australian Dollar
- average 1.41 1.08 1.20
- period end 1.24 1.04 1.43
------ ------ ------
US$1 = Malaysian Ringgit
- average 3.59 3.22 3.33
- period end 3.52 3.27 3.46
------ ------ ------
£1 = US Dollar
- average 1.49 1.97 1.85
- period end 1.65 1.99 1.44
------ ------ ------
11. AUDITORS
PricewaterhouseCoopers LLP has been appointed by the board as auditors to the
Company following the resignation of Deloitte LLP. This follows an audit tender
carried out by the board as part of its corporate governance procedure. In its
letter of resignation, Deloitte LLP stated that there were no circumstances
connected with its resignation which it considered should be brought to the
attention of the members or creditors of the Company.
12. DISTRIBUTION
The interim report for the six-month period ended 30 June 2009 will be
despatched to shareholders on or before 30 September 2009 and copies thereof
will be available from the Company at 3 Clanricarde Gardens, Tunbridge Wells,
Kent TN1 1HQ on and after that date.
21 September 2009
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