Notice of Results
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 2008.
Financials
* Record profit after tax US$29.58 million (2007 US$12.58 million)
* Interim dividend maintained at 2.00p per share
* Earnings per share 28.82p (2007 - 18.23p) on continuing operations
* Increase attributable to sharply higher palm-oil price, higher
oil-palm f.f.b. crops and non-recurring sale of Perhentian Tinggi
Estate in Malaysia
Indonesian palm oil
* Although the palm-oil price has now fallen markedly from peak levels
recorded earlier this year, it continues to trade at historically-
strong levels
* Total oil-palm plantings on new Indonesian projects now 5,800
hectares; estimated to be 7,000 hectares by year end
Australian beef cattle
* Australian operations recorded losses but prospects look
better for second half
* Ownership of Australian associate, NAPCo, increased to 32.57% since
period end
Malaysian property and asset disposals
* Sale of Sungei Kruit Estate in Malaysia recently completed for
US$21.00 million. A total of US$78.00 million has now been
raised since the start of the divestment programme
Commenting on the results, the chairman, Richard Robinow, said:-
"I am delighted to report a 135% increase in profit after tax following the
welcome improvement in the palm-oil price and in our crops. The recent sale of
Sungei Kruit Estate represents another important step in the implementation of
the Group's strategy of divesting from Malaysia and investing in Indonesian palm
oil and Australian beef cattle. Progress in these latter two countries is
evidenced by the increased oil-palm plantings on our new Indonesian projects and
the recent increase in our share of NAPCo."
Enquires:
M.P. Evans Group PLC 020 7796 4133 on 24 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
The board is pleased to report a sharply-increased, record profit after tax for
the six months ended 30 June 2008 of US$29.58 million, compared with US$12.58
million for the first half of 2007. The increase was chiefly attributable to a
substantially higher average palm-oil price, a higher crop of oil palm fresh
fruit bunches ("f.f.b.") and a non-recurring gain resulting from the sale of a
Malaysian estate. These were partly offset by losses recorded on the Group's
Australian 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
Divestment from Malaysia
The programme of disposing of the Group's Malaysian plantations in order to
fund, together with loan finance, its expansion in the Indonesian palm-oil and
Australian beef-cattle sectors continues apace.
In March 2008, the sale of the remainder of Perhentian Tinggi Estate, for a
total consideration of approximately US$23 million, was completed. Very
recently, in September 2008, the sale of Sungei Kruit Estate, for a total of
approximately US$21 million, was also completed. Since the start of the
divestment programme in 2005, plantation assets representing a total of
approximately US$78 million have been sold and assets with an estimated value of
around US$50 million remain to be sold.
New Indonesian palm-oil projects
To date, the Group has secured a total of 36,000 hectares of land suitable for
the development of environmentally-sustainable oil palms, of which 12,000
hectares are located on Bangka Island and 24,000 hectares in East Kalimantan.
Of these, approximately 5,800 hectares have been planted; 3,700 in East
Kalimantan and 2,100 on Bangka. It is estimated that the total planted new
area will be around 7,000 hectares by the year end. The board continues to seek
a further 15,000 to 20,000 hectares of land suitable for oil-palm development.
It is confident that the identification of suitable land will not slow down the
anticipated rate of development in Indonesia.
Australian beef-cattle activities
The Group has recently acquired a further 488,993 shares in The North Australian
Pastoral Company Pty. Limited ("NAPCo") at a cost of A$12.75 per share. It now
owns a total of 5,471,788 shares, representing a 32.57% interest in the company,
acquired at an average cost of A$7.76 per share. NAPCo's net asset value per
share at 30 June 2008 stood at A$16.76 per share.
Further improvements have been carried out on both the pasture and arable areas
of Woodlands, which will enable more cattle to be grazed and more crops to be
grown, the latter either as forage for the cattle or for commercial sale.
The palm-oil market
The palm-oil market, together with vegetable oil markets in general, continued
to rally strongly in early 2008, with prices reaching a peak of about US$1,400
per tonne Rotterdam c.i.f. in March. This followed strong demand from the
emerging Asian economies (most notably China and India), a continued
strengthening of mineral oil and, thereby biofuel, prices and, no doubt, a
significant element of speculative buying. The very high price levels could not
be maintained and eased back to trade broadly between US$1,100 and US$1,200 for
the remainder of the period, before softening further to the current (albeit
historically-high) level of around US$750 per tonne.
The beef-cattle market
Australian prices for grass-fed, lighter-weight cattle (such as those produced
by Woodlands) rose significantly above the levels traded during the latter part
of 2007. This was attributable to some welcome rainfall in central and southern
Queensland, giving rise to greater demand for the cattle. Prices eased back
again in April but, since the period end, have started to pick up again and have
continued to strengthen, particularly in the last few weeks, as further rain has
fallen. Prices for the heavier, "grain-finished" cattle, such as those produced
by NAPCo, have remained reasonably buoyant, particularly as Asian demand has
been stimulated by the softening of the Australian Dollar. However, as
described under "Results for the period" later, prices for cows and "unfinished"
young cattle declined considerably as a result of the dry weather experienced in
many of the breeding areas such as the Northern Territory and the more northerly
parts of Queensland.
RESULTS FOR THE PERIOD
MAJORITY-OWNED OPERATIONS
Indonesia
As referred to above, palm-oil prices were at very strong levels during the
first half of 2008. This, combined with f.f.b. crops of oil palm recovering
from the lower levels of 2007, resulted in a substantial increase in the gross
profit (before the biological bearer-asset adjustment) to US$9,928,000 for the
six months ended 30 June 2008 compared with US$4,042,000 for the same period in
2007; a 146% increase. Crop, production and selling-price details for the
majority-owned estates are set out in the table opposite.
6 months 6 months Year
ended ended ended
30 June 30 June 31 December
2008 2007 2007
Tonnes Tonnes Tonnes
Crops
- oil-palm fresh fruit bunches
("f.f.b.")
Indonesia 68,300 57,400 129,900
------- ------- -------
Malaysia
- continuing operations 700 700 1,600
- discontinued operations 11,200 14,300 31,000
------- ------- -------
- total 11,900 15,000 32,600
------- ------- -------
Total 80,200 72,400 162,500
------- ------- -------
Production
- Indonesia (Pangkatan mill)
Crude palm oil 10,400 8,300 19,500
Palm kernels 2,900 2,300 5,400
------- ------- -------
Selling prices
Palm oil - Rotterdam cif
- average per tonne US$1,166 US$684 US$781
------- ------- -------
The robust palm-oil prices experienced in the first half of 2008 are referred to
in more detail above under "The palm-oil market". There was a welcome recovery
in f.f.b. crops as yields from the younger areas increased and following a
general upturn in the yield cycle. It was also attributable to the resolution
of the workers' strike on Pangkatan, Bilah and Sennah Estates in the early part
of 2008 which was described in the 2007 annual report. This has allowed
operations to
get back to a more normal basis and, as can be seen from the table above, f.f.b.
crops showed a marked increase (19%) for the first half of 2008 when compared
with the first half of 2007. It should be noted that, although harvesting has
returned to normal, it will take time for field-maintenance standards to be
brought back to proper levels. The f.f.b. crop in the first half of 2007 was
also adversely affected by an unusually severe flood on Simpang Kiri Estate at
the end of 2006. Upward pressure on costs, particularly fuel and fertilisers,
partly offset the beneficial effect of robust palm-oil prices and higher f.f.b.
crops.
The net biological gain of US$5,252,000 during the first half resulted from both
an increase in hectarage and the rising palm-oil price. Hectarage under
valuation increased, despite the sale of Perhentian Tinggi Estate, as planting
on the new Indonesian projects in East Kalimantan accelerated. This positive
effect on the biological bearer-asset valuation was further enhanced by an
increase in the long-term assumption for the price of crude palm oil used in the
valuation. This 20-year moving average was US$474 at 30 June 2008 (up US$19
during the period) compared with US$442 at 30 June 2007 (up US$9).
Australia
The loss from the operations of the Woodlands aggregation amounted to US$308,000
compared with US$45,000 for the first half of 2007. 2008 started promisingly
with good rainfall in the early part of the year, resulting in a healthy sorghum
crop (3,600 tonnes) sold at a good price. However, there followed another acute
dry period which restricted pasture and forage-crop growth and, as a result,
cattle-weight gain was disappointing. In addition to this, the valuation of the
cattle at 30 June 2008 was at a low point although values have since recovered
markedly. Costs, particularly those relating to fuel and chemicals increased
significantly during the period. Despite an unusually cold July and August,
rain returned during these months which bodes well for the remainder of the
year.
Almost 6,000 cattle were grazed on the property during the period. The Group's
own herd consisted of 3,226 head at 30 June 2008, compared with 3,021 at 31
December 2007 and 2,473 at 30 June 2007. In addition, during the first half of
2008, Woodlands agreed with the associated company, NAPCo, to fatten
approximately 2,500 of their cattle for a per-kg fee. These are likely to be
returned to NAPCo for grain fattening, and the income recognised, in the second
half of 2008 or early 2009.
Malaysia and Thailand
The continuing operations in Malaysia now consist only of the very small Bertam
Estate (74 hectares) near Penang Island, next to the property activities of the
associated company, Bertam Properties Sdn. Berhad ("Bertam Properties"). The
gross profits relating to Perhentian Tinggi (sold in the first half of 2008) and
Sungei Kruit Estates (in the course of disposal as at 30 June 2008) are included
under "Discontinued operations" which are reviewed below.
The Thai rubber factory achieved a gross profit of US$323,000 for the period
compared with US$221,000 in the first half of 2007. There was an unusual amount
of finished rubber held in stock at the end of 2007 which was sold in the first
half of 2008 at very good prices resulting in the increased profit. It remains
the board's intention to dispose of this operation and discussions with a
potential buyer continue.
Gross profit
As a result of all of the above, the gross profit (before the biological bearer-
asset adjustment) amounted to US$9,860,000 compared with US$4,079,000 for the
same period in 2007. The biological bearer-asset adjustments amounted to
US$5,252,000 for the first half of 2008 (2007 US$1,560,000). The following
table sets out an analysis of the gross profit/(loss) before the biological
bearer-asset adjustment and the biological bearer-asset adjustment between the
various activities and between the countries in which the Group operates.
Six months ended 30 June 2008
Biological
Cost of Gross bearer-asset
Turnover sales profit/(loss) adjustment
US$'000 US$'000 US$'000 US$'000
Plantations
Indonesia 15,563 (5,635) 9,928 5,252
Malaysia 285 (380) (95) -
------ ------ ------ ------
Total plantations 15,848 (6,015) 9,833 5,252
Cattle - Australia 1,750 (2,058) (308) -
Rubber manufacturing
- Thailand 4,389 (4,066) 323 -
Other - UK 12 - 12 -
------ ------ ------ ------
Group total 21,999 (12,139) 9,860 5,252
------ ------ ------ ------
Six months ended 30 June 2007
Biological-
Cost of Gross bearer-asset
Turnover sales profit/(loss) adjustment
US$'000 US$'000 US$'000 US$'000
Plantations
Indonesia 7,610 (3,568) 4,042 1,560
Malaysia 223 (371) (148) -
------ ------ ------ ------
Total plantations 7,833 (3,939) 3,894 1,560
Cattle - Australia 511 (556) (45) -
Rubber manufacturing
- Thailand 1,663 (1,442) 221 -
Other - UK 10 (1) 9 -
------ ------ ------ ------
Group total 10,017 (5,938) 4,079 1,560
------ ------ ------ ------
Year ended 31 December 2007
Biological-
Cost of Gross bearer-asset
Turnover sales profit/(loss) adjustment
US$'000 US$'000 US$'000 US$'000
Plantations
Indonesia 19,417 (8,290) 11,127 10,197
Malaysia 519 (578) (59) -
------ ------ ------ ------
Total plantations 19,936 (8,868) 11,068 10,197
Cattle - Australia 1,284 (1,864) (580) -
Rubber manufacturing
- Thailand 2,332 (2,233) 99 -
Other - UK 45 - 45 -
------ ------ ------ ------
Group total 23,597 (12,965) 10,632 10,197
------ ------ ------ ------
Administrative expenses
The increase in administrative expenses reflected the, primarily management,
costs on the new Indonesian projects as well as the expanding Jakarta head
office. Legal costs continue with regard to the Sennah Estate court case on
which further details are set out below.
ASSOCIATED COMPANIES
Indonesia
The Group's share of its Indonesian associated companies' profits for the
period, compared with that for the first half, and for the whole, of 2007, was
as follows:-
Six months ended 30 June 2008
Pre-tax Tax Post-tax
US$'000 US$'000 US$'000
PT Agro Muko (31.53%) 10,904 (3,052) 7,852
PT Kerasaan Indonesia (38.00%) 2,781 (792) 1,989
------ ------ ------
13,685 (3,844) 9,841
------ ------ ------
Six months ended 30 June 2007
Pre-tax Tax Post-tax
US$'000 US$'000 US$'000
PT Agro Muko (31.53%) 4,873 (1,435) 3,438
PT Kerasaan Indonesia (38.00%) 973 (290) 683
------ ------ ------
5,846 (1,725) 4,121
------ ------ ------
Year ended 31 December 2007
Pre-tax Tax Post-tax
US$'000 US$'000 US$'000
PT Agro Muko (31.53%) 17,991 (5,535) 12,456
PT Kerasaan Indonesia (38.00%) 3,525 (1,081) 2,444
------ ------ ------
21,516 (6,616) 14,900
------ ------ ------
Crops and production were as follows:-
6 months 6 months Year
ended ended ended
30 June 30 June 31 December
2008 2007 2007
Tonnes Tonnes Tonnes
Crops - f.f.b. -
PT Agro Muko - own 154,100 142,400 293,900
- outgrowers 4,100 2,000 5,100
PT Kerasaan Indonesia 23,200 25,300 53,300
-------- -------- --------
181,400 169,700 352,300
-------- -------- --------
Production -
(PT Agro Muko) - crude palm oil 35,600 32,200 65,500
- palm kernels 7,800 7,200 14,600
-------- -------- --------
Rubber crops -
(PT Agro Muko) - own 950 1,120 2,070
- outgrowers 210 290 360
-------- -------- --------
1,160 1,410 2,430
-------- -------- --------
As with the Group's majority-owned estates, the estates owned by the associated
companies overall achieved higher crops and benefited from the robust palm-oil
price although this was partially offset by cost inflation. PT Agro Muko's
rubber crop declined as the older areas are being replanted but prices remained
at very healthy levels.
Australia
The Group's share of NAPCCo's result for the period, compared with that for the
first half, and for the whole, of 2007, is set out below:-
Six months ended 30 June 2008
Pre-tax Tax Post-tax
US$'000 US$'000 US$'000
NAPCo (29.66%) (2,459) 737 (1,722)
------ ------ ------
Six months ended 30 June 2007
Pre-tax Tax Post-tax
US$'000 US$'000 US$'000
NAPCo (29.66%) 3,397 (863) 2,534
------ ------ ------
Year ended 31 December 2007
Pre-tax Tax Post-tax
US$'000 US$'000 US$'000
NAPCo (29.66%) 3,588 (748) 2,840
------ ------ ------
NAPCo recorded a loss for the first half of 2008 primarily because the absence
of a wet season on the breeding and growing-out stations resulted in the
necessity to sell cattle at a much younger age than would normally be the case.
Weaners would normally be moved on from the breeding stations to the growing-out
properties, then to the backgrounding (fattening) properties before ultimately
going through the feedlot prior to sale. Acute drought on the breeding and
growing-out properties has necessitated the disposal of these weaners before the
normal fattening process. The costs associated with the supplementary feeding
and the subsequent disposal of these animals have been incurred in the first
half of the year.
In addition to the above, the valuation of the herd at 30 June 2008 was
negatively affected by a low valuation of cows at that date which, in turn,
reduced the profit. Because of the drought, NAPCo's cows were not only at
lighter weights than normal but the large number of cows generally, and younger
cattle, on the market depressed values. However, since that date, rain has
fallen on some parts of Queensland and prices have recovered markedly.
Under more normal circumstances, NAPCo would sell between 50,000 and 60,000 head
each year but the conditions outlined above will result in approximately 40,000
weaners additionally being disposed of. This will reduce the herd to between
150,000 and 160,000 compared with the 198,000 at the end of 2007. However, the
core breeding herd is largely intact and, in the event that the season improves,
the company will buy in cattle to replenish the herd.
Malaysia
The Group's share of Bertam Properties' profit for the period, compared with
that for the first half, and for the whole, of 2007 is set out below:-
Six months ended 30 June 2008
Pre-tax Tax Post-tax
US$'000 US$'000 US$'000
Bertam Properties (40.00%) 1,161 (214) 947
------ ------ ------
Six months ended 30 June 2007
Pre-tax Tax Post-tax
US$'000 US$'000 US$'000
Bertam Properties (40.00%) 1,106 (178) 928
------ ------ ------
Year ended 31 December 2007
Pre-tax Tax Post-tax
US$'000 US$'000 US$'000
Bertam Properties (40.00%) 13,938 (1,066) 12,872
------ ------ ------
6 months 6 months Year
ended ended ended
30 June 30 June 31 December
2008 2007 2007
Tonnes Tonnes Tonnes
Bertam Estate crops - f.f.b. 2,600 4,800 8,600
------ ------ ------
Bertam Properties reported similar results in the first half of 2008 as those
for the same period in 2007. As in the past, the majority of the profits in the
period were derived from land sales, the main one of which was the sale of 92
hectares to the Malaysian Ministry of Higher Education in respect of Universiti
Teknologi Mara. 67% of the profit on this was recognised in 2007 and a further
19% during the period. The remaining 14% is expected to be recognised in the
second half of 2008.
Property development continues successfully but, as the group's land area
diminishes through development and land sales, the area devoted to oil-palm
cultivation reduces. Although crops fell by some 46% during the period, the
profit from this source was only 17% lower than for the same period in 2007 due
to the strength of the palm-oil price.
DISCONTINUED OPERATIONS
The sale of the majority of Perhentian Tinggi Estate (826 hectares) was
completed and the profit recognised in the first half of 2008. The sale of
Sungei Kruit Estate (828 hectares) has subsequently been completed and the
profit will be recognised in the second half of 2008. Accordingly,
"Discontinued operations" in the consolidated income statement for the period
includes, in respect of Perhentian Tinggi Estate, a gain of US$14.80 million
after tax on the sale of the estate, together with the write back of biological
bearer-asset gains of US$1.97 million. In addition, the operating results of
both Perhentian Tinggi Estate (up to the date of disposal) and Sungei Kruit
Estate, exchange differences and tax are included under this category. As with
the Indonesian plantation operations, Perhentian Tinggi and Sungei Kruit Estates
benefited from the strong palm-oil price and achieved markedly improved gross
profits.
SENNAH ESTATE LAWSUIT
A judicial review of the Indonesian Supreme Court's decision in August 2007 in
the Group's favour is awaited. This review has been sought by DR Rahmat Shah.
As in the earlier stages of this lawsuit, the Group will, through its Indonesian
lawyers, continue robustly to confront any issues raised.
PROSPECTS
F.f.b. crops in Indonesia are, as in the past, anticipated to be higher in the
second half of the year than the first. Overall, the crop for the whole year is
expected to be significantly higher than that for 2007. As referred to above
under "The palm-oil market", palm-oil prices have fallen markedly from the high
point of around US$1,400 per tonne (Rotterdam c.i.f.) achieved in March 2008 to
the current level of around US$750 per tonne. Notwithstanding this fall, the
price is still at an historically-high level.
Although July and August have been amongst the coldest on record in Queensland
(resulting in restricted growth of pastures and forage crops), recent good
rainfall on Woodlands should ensure that growth will improve as the summer
months arrive. The recent rainfall should also ensure a good wheat crop.
Cattle prices have improved in response to the rains and to the softening of the
Australian Dollar against the US Dollar.
The profit from the sale of Sungei Kruit Estate, amounting to approximately
US$8.7 million, will be recognised in the second half of 2008. As a result of
all of the foregoing the board anticipates significantly improved operating
profits for 2008 compared with 2007.
24 September 2008
CONSOLIDATED INCOME STATEMENT
For the six months ended 30 June 2008
Result before 6 months
biological- Biological- ended
bearer-asset bearer-asset 30 June
adjustment adjustment 2008
US$'000 US$'000 US$'000
Revenue 21,999 - 21,999
Cost of sales (12,139) (4,476) (16,615)
------ ------ ------
Gross profit 9,860 (4,476) 5,384
Gain on biological assets - 9,728 9,728
Foreign-exchange losses (697) - (697)
Other administrative expenses (3,093) - (3,093)
------ ------ ------
Group operating profit 6,070 5,252 11,322
Exceptional credit(note 3) 265 - 265
------ ------ ------
Profit on ordinary activities
before interest 6,335 5,252 11,587
Investment revenue 630 - 630
Finance costs (1,096) - (1,096)
------ ------ ------
Group-controlled profit before
taxation 5,869 5,252 11,121
Tax charge on profit on ordinary
activities (3,792) (1,498) (5,290)
------ ------ ------
Group-controlled profit after
taxation 2,077 3,754 5,831
Share of associated companies'
profit after tax 6,400 2,666 9,066
------ ------ ------
Profit after tax before
discontinued operations 8,477 6,420 14,897
Discontinued operations (note 4) 16,657 (1,971) 14,686
------ ------ ------
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 28.82
Continuing and discontinued operations 57.23
------
Diluted earnings per 10p share
Continuing operations 27.79
Continuing and discontinued operations 55.18
------
CONSOLIDATED INCOME STATEMENT
For the six months ended 30 June 2007
Result before 6 months
biological- Biological- ended
bearer-asset bearer-asset 30 June
adjustment adjustment 2007
US$'000 US$'000 US$'000
Revenue 10,017 - 10,017
Cost of sales (5,938) (1,864) (7,802)
------ ------ ------
Gross profit 4,079 (1,864) 2,215
Gain on biological assets - 3,424 3,424
Foreign-exchange gains 1,275 - 1,275
Other administrative expenses (2,577) - (2,577)
------ ------ ------
Group operating profit 2,777 1,560 4,337
Exceptional charge (note 3) (213) - (213)
------ ------ ------
Profit on ordinary activities
before interest 2,564 1,560 4,124
Investment revenue 320 - 320
Finance costs (715) - (715)
------ ------ ------
Group-controlled profit before
taxation 2,169 1,560 3,729
Tax (charge)/credit on profit on
ordinary activities (1,469) 92 (1,377)
------ ------ ------
Group-controlled profit after
taxation 700 1,652 2,352
Share of associated companies'
profit after tax 6,772 811 7,583
------ ------ ------
Profit after tax before
discontinued operations 7,472 2,463 9,935
Discontinued operations (note 4) 2,642 (2) 2,640
------ ------ ------
Profit after tax 10,114 2,461 12,575
------ ------ ------
Attributable to:
Equity holders of
M.P. Evans Group PLC 9,372 2,564 11,936
Minority interests 742 (103) 639
------ ------ ------
10,114 2,461 12,575
------ ------ ------
US Cents
Basic earnings per 10p share
Continuing operations 18.23
Continuing and discontinued operations 23.40
------
Diluted earnings per 10p share
Continuing operations 17.35
Continuing and discontinued operations 22.28
------
CONSOLIDATED INCOME STATEMENT
For the year ended 31 December 2007
Result before Year
biological- Biological- ended
bearer-asset bearer-asset 31 December
adjustment adjustment 2007
US$'000 US$'000 US$'000
Revenue 23,597 - 23,597
Cost of sales (12,965) (8,550) (21,515)
------ ------ ------
Gross profit 10,632 (8,550) 2,082
Gain on biological assets - 18,747 18,747
Foreign-exchange losses (1,434) - (1,434)
Other administrative expenses (5,152) - (5,152)
------ ------ ------
Group operating profit 4,046 10,197 14,243
Exceptional credit (note 3) 3,641 - 3,641
------ ------ ------
Profit on ordinary activities
before interest 7,687 10,197 17,884
Investment revenue 1,306 - 1,306
Finance costs (1,763) - (1,763)
------ ------ ------
Group-controlled profit before
taxation 7,230 10,197 17,427
Tax charge on profit on ordinary
activities (3,928) (3,185) (7,113)
------ ------ ------
Group-controlled profit after
taxation 3,302 7,012 10,314
Share of associated companies'
profit after tax 23,525 7,087 30,612
------ ------ ------
Profit after tax before
discontinued operations 26,827 14,099 40,926
Discontinued operations (note 4) 5,317 387 5,704
------ ------ ------
Profit after tax 32,144 14,486 46,630
------ ------ ------
Attributable to:
Equity holders of
M.P. Evans Group PLC 30,328 11,936 42,264
Minority interests 1,816 2,550 4,366
------ ------ ------
32,144 14,486 46,630
------ ------ ------
US Cents
Basic earnings per 10p share
Continuing operations 71.21
Continuing and discontinued operations 82.32
------
Diluted earnings per 10p share
Continuing operations 68.83
Continuing and discontinued operations 79.57
------
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
Called-up share capital (note 7) 8,733 - 8,733
Share premium account 18,401 - 18,401
Revaluation reserve 17,824 - 17,824
Capital redemption reserve 3,896 - 3,896
Merger reserve 1,056 - 1,056
Other reserve 543 - 543
Share of associated companies'
reserves 42,504 22,448 64,952
Foreign exchange reserve (25) - (25)
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
------- ------- -------
CONSOLIDATED BALANCE SHEET
AT 30 JUNE 2007
Before
biological- Biological-
bearer-asset bearer-asset 30 June
adjustment adjustment 2007
US$'000 US$'000 US$'000
Non-current assets
Intangible assets - goodwill 902 - 902
------- ------- -------
Biological assets (note 6) - 46,715 46,715
Property, plant and equipment 77,578 (11,177) 66,401
Investments 88,811 13,505 102,316
------- ------- -------
166,389 49,043 215,432
------- ------- -------
Current assets
Biological assets 1,942 - 1,942
Inventories 3,092 - 3,092
Trade and other receivables 9,868 - 9,868
Cash and cash equivalents 24,687 - 24,687
------- ------- -------
39,589 - 39,589
------- ------- -------
Total assets 206,880 49,043 255,923
------- ------- -------
Current liabilities
Bank loans and overdrafts 24,064 - 24,064
Trade and other payables 7,116 - 7,116
Current tax liability 610 - 610
------- ------- -------
31,790 - 31,790
------- ------- -------
------- ------- -------
Net current assets 7,799 - 7,799
------- ------- -------
Non-current liabilities
Deferred tax liability (1,327) 10,141 8,814
Long-term provisions 1,690 - 1,690
------- ------- -------
363 10,141 10,504
------- ------- -------
Total liabilities 32,153 10,141 42,294
------- ------- -------
------- ------- -------
Net assets 174,727 38,902 213,629
------- ------- -------
Equity
Called-up share capital 8,724 - 8,724
Share premium account 18,378 - 18,378
Revaluation reserve 19,411 - 19,411
Capital redemption reserve 3,896 - 3,896
Merger reserve (7,280) - (7,280)
Other reserve 492 - 492
Share of associated companies'
reserves 36,366 12,695 49,061
Foreign exchange reserve 794 (30) 764
Profit and loss account 88,737 22,043 110,780
------- ------- -------
Equity attributable to members of
M.P. Evans Group PLC (note 8) 169,518 34,708 204,226
Minority interest 5,209 4,194 9,403
------- ------- -------
Total equity 174,727 38,902 213,629
------- ------- -------
CONSOLIDATED BALANCE SHEET
at 31 December 2007
Before
biological- Biological-
bearer-asset bearer-asset 31 December
adjustment adjustment 2007
US$'000 US$'000 US$'000
Non-current assets
Intangible assets - goodwill 1,008 - 1,008
------ ------ ------
Biological assets (note 6) - 54,553 54,553
Property, plant and equipment 70,086 (17,443) 52,643
Investments 90,363 19,782 110,145
Deferred tax asset 1,010 - 1,010
------ ------ ------
161,459 56,892 218,351
------ ------ ------
Current assets
Assets held for sale 15,922 7,694 23,616
Biological assets 2,893 - 2,893
Inventories 9,522 - 9,522
Trade and other receivables 5,256 - 5,256
Current tax asset 1,130 - 1,130
Cash and cash equivalents 31,765 - 31,765
------- ------- -------
66,488 7,694 74,182
------- ------- -------
Total assets 228,955 64,586 293,541
------- ------- -------
Current liabilities
Liabilities related to
assets held for sale - 2,308 2,308
Bank loans and overdrafts 24,391 - 24,391
Trade and other payables 13,339 - 13,339
Current tax liability 1,724 - 1,724
------- ------- -------
39,454 2,308 41,762
------ ------ ------
Net current assets 27,034 5,386 32,420
------- ------- -------
Non-current liabilities
Borrowings 2,003 - 2,003
Deferred tax liability 1,909 11,133 13,042
Long-term provisions 1,375 - 1,375
------- ------- -------
5,287 11,133 16,420
------- ------- -------
Total liabilities 44,741 13,441 58,182
------- ------- -------
Net assets 184,214 51,145 235,359
------- ------- -------
Equity
Called-up share capital (note 7) 8,728 - 8,728
Share premium account 18,352 - 18,352
Revaluation reserve 16,974 - 16,974
Capital redemption reserve 3,896 - 3,896
Merger reserve 1,056 - 1,056
Other reserve 483 - 483
Share of associated companies'
reserves 37,655 19,782 57,437
Foreign exchange reserve (140) - (140)
Profit and loss account 91,903 24,723 116,626
------- ------- -------
Equity attributable to members of
M.P. Evans Group PLC (note 8) 178,907 44,505 223,412
Minority interest 5,307 6,640 11,947
------- ------- -------
Total equity 184,214 51,145 235,359
------- ------- -------
CONSOLIDATED CASH-FLOW STATEMENT
For the six months ended 30 June 2008
6 months 6 months Year
ended ended ended
30 June 30 June 31 December
2008 2007 2007
US$'000 US$'000 US$'000
Net cash from operating
activities (note 9) (3,218) 89 (4,850)
------- ------- -------
Investing activities
Interest received 670 374 1,244
Dividends from associated
undertakings 8,276 2,909 11,396
Dividends from trading investments 113 3 206
Proceeds from disposal of property,
plant and equipment 24,720 2,914 4,091
Purchase of property, plant and
equipment (2,451) (18,031) (14,955)
Re-organisation expenses - (240) -
Investment in subsidiary
undertaking - - (106)
Investment in associated
undertaking (62) - (1,414)
------- ------- -------
Net cash generated by/(used in)
investing activities (31,266) (12,071) 462
------- ------- -------
Financing activities
Dividends paid (note 5) (5,144) (4,520) (6,655)
Repayment of borrowings - (503) (1,004)
Proceeds on issue of shares (note 7) 53 1,117 1,095
Bank loans (repaid)/raised (2,681) 7,853 10,130
Dividend paid to minorities (1,131) (403) (498)
------- ------- -------
Net cash (used in)/generated by
financing activities (8,903) 3,544 3,068
------- ------- -------
Net increase/(decrease) in cash
and cash equivalents 19,145 (8,438) (1,320)
Cash and cash equivalents at
beginning of the period 31,765 33,114 33,114
Effect of foreign exchange rates (165) 11 (29)
------- ------- -------
Cash and cash equivalents at
end of the period 50,745 24,687 31,765
------- ------- -------
NOTES TO THE INTERIM STATEMENTS
For the six months ended 30 June 2008
1. STATUTORY INFORMATION
The financial information for the six-month periods ended 30 June 2008 and 2007
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 2007 is abridged from
the statutory accounts. The 31 December 2007 statutory accounts have been
reported on by the Group's auditors, Deloitte & Touche LLP, and 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 2007. This resulted in an amendment to the
previously published result of the six months to 30 June 2007, increasing profit
for the period by US$1.01 million from reversing a paper loss that had been
booked on the de-recognition of two associated companies that continue to be
held as investments.
3. EXCEPTIONAL ITEMS
6 months 6 months Year
ended ended ended
30 June 30 June 31 December
2008 2007 2007
US$'000 US$'000 US$'000
Continuing operations
Sale of tangible fixed assets 1 27 33
Sale of fixed-asset investments 81 - -
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 183 - 3,855
Restructuring - (240) (247)
------ ------ ------
265 (213) 3,641
------ ------ ------
4 DISCONTINUED OPERATIONS
6 months 6 months Year
ended ended ended
30 June 30 June 31 December
2008 2007 2007
US$'000 US$'000 US$'000
Malaysian estates sold
Profit after tax 1,829 590 3,642
Profit after tax on sale of estates 12,857 2,050 2,062
------ ------ ------
14,686 2,640 5,704
------ ------ ------
5. DIVIDENDS
6 months 6 months Year
ended ended ended
30 June 30 June 31 December
2008 2007 2007
US$'000 US$'000 US$'000
2006 final dividend
- 4.50p per 10p share - 4,520 4,588
2007 interim dividend
- 2.00p per 10p share - - 2,067
2007 final dividend
- 5.00p per 10p share 5,144 - -
------ ------ ------
5,144 4,520 6,655
------ ------ ------
Subsequent to 30 June 2008, the board has declared an interim dividend of 2.00p
per 10p share. The dividend will be paid on or after 4 November 2008 to those
shareholders on the register at the close of business on 3 October 2008.
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
2008 2007 2007
Price of crude palm oil (US$/t,
cif Rotterdam) 474 442 455
Exchange rate (Rupiah per US$) 9,225 9,054 9,419
------ ------ ------
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
2008 2007 2007
Shares of 10p each
At 1 January 51,690,758 50,961,432 50,961,432
Issued 21,250 185,279 729,326
---------- ---------- ----------
At period end 51,712,008 51,146,711 51,690,758
---------- ---------- ----------
US$'000 US$'000 US$'000
At 1 January 8,728 8,582 8,582
Issued 5 142 146
------- ------- -------
At period end 8,733 8,724 8,728
------- ------- -------
During the period 21,250 (2007 - 729,326) 10p shares were issued as a result of
the exercise of share options. Total cash proceeds received by the Company were
US$53,367 (2007 US$1,117,000).
8. RECONCILIATION OF MOVEMENTS IN SHAREHOLDERS' FUNDS
6 months 6 months Year
ended ended ended
30 June 30 June 31 December
2008 2007 2007
US$'000 US$'000 US$'000
Profit attributable to members
of the Company 26,637 11,936 42,264
Dividend (note 5) (5,144) (4,520) (6,655)
------- ------- -------
21,493 7,416 35,609
Issue of shares 53 1,117 1,095
Share-based payments 10 - 11
Other recognised gains and losses
relating to the period 7,340 11,998 3,002
------- ------- -------
Net addition to shareholders'
funds 28,896 20,531 39,717
Opening shareholders' funds 223,412 183,695 183,695
------- ------- -------
Closing shareholders' funds 252,308 204,226 223,412
------- ------- -------
9. ANALYSIS OF MOVEMENTS IN CASH FLOW
6 months 6 months Year
ended ended ended
30 June 30 June 31 December
2008 2007 2007
US$'000 US$'000 US$'000
Operating profit 10,860 7,175 18,649
Biological gain (8,073) (3,679) (21,325)
Depreciation of property, plant
and equipment 1,130 925 2,082
Past-service liabilities 94 - (102)
Share-based payments 69 - 11
------- ------- -------
Operating cash flows before
movements in working capital 4,080 4,421 (685)
Increase in inventories (2) (866) (6,187)
(Increase)/decrease in receivables (10) (1,849) 2,692
(Decrease)/increase in payables (1,453) 220 6,413
------- ------- -------
Cash generated from operating
activities 2,615 1,926 2,233
Income tax paid (4,737) (1,122) (5,320)
Interest paid (1,096) (715) (1,763)
------- ------- -------
Net cash from operating activities (3,218) 89 (4,850)
------- ------- -------
10. EXCHANGE RATES
6 months 6 months Year
ended ended ended
30 June 30 June 31 December
2008 2007 2007
US$1 = Indonesian Rupiah
- average 9,255 9,037 9,140
- period end 9,225 9,035 9,419
------ ------ ------
US$1 = Australian Dollar
- average 1.08 1.24 1.20
- period end 1.04 1.18 1.14
------ ------ ------
US$1 = Malaysian Ringgit
- average 3.22 3.46 3.44
- period end 3.27 3.45 3.31
------ ------ ------
£1 = US Dollar
- average 1.97 1.97 2.00
- period end 1.99 2.01 1.99
------ ------ ------
11. DISTRIBUTION
The interim report for the six-month period ended 30 June 2008 will be
despatched to shareholders on or after Wednesday 1 October 2008 and copies
thereof will be available from the Company at 3 Clanricarde Gardens, Tunbridge
Wells, Kent TN1 1HQ on and after that date.
24 September 2008
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