Half Yearly Report

RNS Number : 5582T

Asian Plantations Limited

30 September 2010

 



30 September 2010

Asian Plantations Limited

("APL" or the "Company")

Interim Results for the six months ended 30 June 2010

Asian Plantations Limited (LSE: PALM), a palm oil plantation company with operations in Malaysia, is pleased to announce its unaudited interim results for the six month period ending 30 June 2010.

Highlights

·     First revenue reported from the sale of fresh fruit bunches ("FFB").

·     Fundraise of £4.25 million (circa. US$6.6 million) on 16 August 2010, via a Company sponsored institutional placing at 110 pence per share, representing a 46.7 per cent. premium to the Company's admission price of 75 pence per share on 30 November 2009.  Concurrently, the Company secured a new RM24.7 million (circa. US$7.8 million) nine year debt facility from a local bank in Malaysia.

·     Aggressive planting program underway, with the Company on track to complete the planting of its first estate, BJ Corporation, by 2011, and Incosetia by 2012.

·     Acquisition of the Fortune estate provides additional important scale to the Company's operations and is expected to be fully planted by 2013.  All planting targets are subject to the availability of the required working capital.

·     Up-sizing of the Company's milling plans, from 90 tonnes per hour to 120 tonnes per hour, based on the current land resource owned by the Company and third party crop in the area.  The Company's mill is expected to be operational in 2012 and will utilize advanced vertical sterilizer technology with methane recapture.

Datuk Linggi, Non-Executive Chairman of APL, commented:

"We are now into our third year of significant investment and land development. Based on the current planting schedule, we expect to harvest over 20,000 tonnes of FFB in 2012, with a target of up to 375,000 tonnes per annum, as all three existing fields fully mature.

The Fortune acquisition is consistent with our previously stated strategy to achieve a land resource of titled, Malaysian agricultural land in excess of 20,000 hectares by year-end 2011. Equally important, the acquired land is in close proximity to our existing estates, thereby allowing one mill to service the entire area.

All indicators point to increased scarcity for Malaysian titled land, a continued slow-down of palm oil exports from Malaysia and rising global awareness about the importance of palm oil in the global food supply chain. Coupling these trends with a rising edible oil price environment, the board of APL believes that its strategy of assembling wholly owned, properly titled, land parcels in Malaysia, an investment grade rated country, will generate substantial value for the Company's shareholders."

For further information contact:

Asian Plantations Limited Dennis Melka, Joint Chief Executive Officer Graeme Brown, Joint Chief Executive Officer	Tel: [phone] Tel: [phone]
Strand Hanson Limited James Harris Paul Cocker Liam Buswell	Tel: [phone]
Panmure Gordon (UK) Limited Tom Nicholson Edward Farmer	Tel: [phone]
Bankside Consultants Simon Rothschild Louise Mason	Tel: [phone] Tel: [phone]

Asian Plantations Limited and its Subsidiaries

Unaudited interim results for the six month period ending 30 June 2010

Consolidated Income Statement

For the six months ended 30 June 2010

	Note		Six Months Ended 30.6.2010		Six Months Ended 30.6.2009		Year Ended 31.12.2009
			USD'000		USD'000		USD'000
			Unaudited		Unaudited		Audited
Revenue			101		-		-
Cost of sales			(78)		-		-
Gross profit			23		-		-
Other income			18		-		48
Other items of expenses
Administrative expenses	3		(942)		(24)		(1,306)
Other expenses	4		(543)		(52)		(107)
Finance expenses			(565)		-		(22)
Loss before taxation			(2,009)		(76)		(1,387)
Income tax expense			-		-		-
Loss for the period/year			(2,009)		(76)		(1,387)
Loss attributable to :
Owners of the parent			(2,009)		(72)		(1,371)
Non-controlling interest			-		(4)		(16)
			(2,009)		(76)		(1,387)
Loss per share attributable to owners of the parent (cents per share)
Basic	5		(6.8)		(0.4)		(6.8)

Consolidated Statement of Comprehensive Income

For the six months ended 30 June 2010

	Six Months Ended 30.6.2010		Six Months Ended 30.6.2009		Year Ended 31.12.2009
	USD'000		USD'000		USD'000
	Unaudited		Unaudited		Audited
Loss for the period/year	(2,009)		(76)		(1,387)
Other comprehensive income:
Foreign currency translation adjustments	612		(100)		(203)
Total comprehensive income for the period/year	(1,397)		(176)		(1,590)
Total comprehensive income attributable to:
Owners of the parent	(1,397)		(165)		(1,580)
Non-controlling interest	-		(11)		(10)
	(1,397)		(176)		(1,590)

Consolidated Statement of Financial Position as at 30 June 2010

		Note		30.6.2010		30.6.2009		31.12.2009
				USD'000		USD'000		USD'000
				Unaudited		Unaudited		Audited
Non-current assets
Property, plant and equipment		6		6,369		1,262		5,063
Biological assets		7		7,925		1,902		6,093
Land use rights		8		21,824		6,023		20,950
Goodwill on consolidation				561		189		534
Total non-current assets				36,679		9,376		32,640
Current assets
Inventories				83		68		45
Trade and other receivables				179		100		180
Prepaid operating expenses				133		-		82
Cash and cash equivalents				1,736		92		4,174
Total current assets				2,131		260		4,481
Total assets				38,810		9,636		37,121
Current liabilities
Trade and other payables				1,108		688		1,383
Loans and borrowings		9		1,901		1,711		2,544
Total current liabilities				3,009		2,399		3,927
Non-current liability
Loans and borrowings		9		23,939		1,431		19,935
Total non-current liabilities				23,939		1,431		19,935
Total liabilities				26,948		3,830		23,862
Net assets				11,862		5,806		13,259

Consolidated Statement of Financial Position as at 30 June 2010 (cont'd)

				30.6.2010		30.6.2009		31.12.2009
				USD'000		USD'000		USD'000
				Unaudited		Unaudited		Audited
Attributable to owners of the parent
Share capital		10		35,459		5,849		35,459
Other reserves				(19,714)		(246)		(20,452)
Accumulated losses				(3,883)		(283)		(1,748)
				11,862		5,320		13,259
Non-controlling interests				-		486		-
Total equity				11,862		5,806		13,259

Consolidated Statement of Changes in Equity

For the six months ended 30 June 2010

	Attributable to owners of the parent
	Share Capital		Other reserves		Accumu-lated losses		Total share capital and reserves		Non-controlling interests			Total equity
	USD'000		USD'000		USD'000		USD'000		USD'000			USD'000
For the six months ended
30.6.2010
Unaudited
At 1 January 2010	35,459		(20,452)		(1,748)		13,259		-			13,259
Loss for the period	-		-		(2,009)		(2,009)		-			(2,009)
Other comprehensive income for the period	-		738		(126)		612		-			612
Total comprehensive income for the period	-		738		(2,135)		(1,397)		-			(1,397)
At 30 June 2010	35,459		(19,714)		(3,883)		11,862		-			11,862
For the six months ended
30.6.2009
Unaudited
At 1 January 2009	5,849		13		(377)		5,485		497			5,982
Loss for the period	-		-		(72)		(72)		(4)			(76)
Other comprehensive income for the period	-		(259)		166		(93)		(7)			(100)
Total comprehensive income for the period	-		(259)		94		(165)		(11)			(176)
At 30 June 2009	5,849		(246)		(283)		5,320		486			5,806

Consolidated Statement of Changes in Equity

For the six months ended 30 June 2010 (cont'd)

	Attributable to owners of the parent
	Share Capital		Other reserves		Accumu-lated losses		Total share capital and reserves			Non-controlling interests			Total equity
	USD'000		USD'000		USD'000		USD'000			USD'000			USD'000
For the year ended
31.12.2009
Audited
At 1 January 2009	5,849		13		(377)		5,485			497			5,982
Loss for the period	-		-		(1,371)		(1,371)			(16)			(1,387)
Other comprehensive income for the year	-		(209)		-		(209)			6			(203)
Total comprehensive income for the year	-		(209)		(1,371)		(1,580)			(10)			(1,590)
Share issuance expense	(160)		-		-		(160)			-			(160)
Issuance of ordinary shares for cash	8,714		-		-		8,714			-			8,714
Issuance of new shares as consideration for acquisition of a subsidiary company	26,905		-		-		26,905			-			26,905
Adjustment due to pooling of interest method	(5,849)		(20,256)		-		(26,105)			-			(26,105)
Acquisition of minority interest in a subsidiary	-		-		-		-			(487)			(487)
At 31 December 2009	35,459		(20,452)		(1,748)		13,259			-			13,259

Consolidated Statement of Cash Flow

For the six months ended 30 June 2010

	Six Months Ended 30.6.2010		Six Months Ended 30.6.2009		Year Ended 31.12.2009
	USD'000		USD'000		USD'000
	Unaudited		Unaudited		Audited
Cash flows from operating activities
Loss before taxation	(2,009)		(76)		(1,387)
Adjustments for:
Amortisation of land use rights	198		51		88
Depreciation of property, plant and equipment	22		20		2
Gain arising from changes in fair value of biological assets	-		(828)		-
Interest expense	565		-		22
Currency realignment	(38)		1		303
Operating cash flows before changes in working capital	(1,262)		(832)		(972)
Increase in inventories	(38)		(37)		(13)
Decrease/(Increase) in trade and other receivables	1		8		(69)
Increase in prepaid operating expenses	(51)		-		(24)
(Decrease)/Increase in trade and other payables	(316)		394		(6,884)
Cash flows from operations	(1,666)		(467)		(7,962)
Interest paid	(638)		(54)		(165)
Net cash used in operating activities	(2,304)		(521)		(8,127)
Cash flows from investing activities
Net cash outflow arising from the acquisition of a subsidiary	-		-		(12,021)
Purchase of property, plant and equipment	(1,169)		(828)		(2,474)
Addition to biological assets	(1,387)		-		(1,919)
Acquisition of minority interest in a subsidiary	-		-		(487)
Net cash used in investing activities	(2,556)		(828)		(16,901)

Consolidated Statement of Cash Flow 

For the six months ended 30 June 2010 (cont'd)

	Six Months Ended 30.6.2010		Six Months Ended 30.6.2009		Year Ended 31.12.2009
	USD'000		USD'000		USD'000
	Unaudited		Unaudited		Audited
Cash flows from financing activities
Proceeds from issuance of ordinary shares	-		-		8,714
Share issuance expenses	-		-		(160)
Drawdown of term loans	2,226		1,370		20,581
Repayment of finance lease	(18)		(2)		(9)
Net cash generated from financing activities	2,208		1,368		29,126
Net (decrease)/increase in cash and cash equivalents	(2,652)		19		4,098
Effect of exchange rates on cash and cash equivalents	214		(1)		2
Cash and cash equivalents, beginning balance	4,174		74		74
Cash and cash equivalents, ending balance	1,736		92		4,174

Notes on Financial Statements - 30 June 2010

1.         General Information

Asian Plantations Limited (the "Company") is a limited liability company incorporated and domiciled in the Republic of Singapore and listed on the Alternative Investment Market ("AIM") of the London Stock Exchange.

The registered office of the Company is located at No.14 Ann Siang Road, #02-01, Singapore 069694.

The principal activity of the Company is that of investment holding. The principal activities of the subsidiaries are development of oil palm plantation. 

2.         Basis of preparation and accounting polices

The consolidated financial statements for the six months ended 30 June 2010 are unaudited and do not include all the information and disclosures required in the annual financial statements, and should be read in conjunction with the Group's annual financial statements as at 31 December 2009.

The consolidated financial statements have been prepared in accordance with International Financial Reporting Standards ("IFRS") as issued by the International Accounting Standards Board ("IASB").

The accounting policies, presentation and methods of computation have been followed in these unaudited financial statements as were applied in the preparation of the Group's annual financial statements for the year ended 31 December 2009.

The financial statements are presented in United States Dollars ("USD") to facilitate the comparison of financial results with companies in the Oil-palm industry and all values are rounded to the nearest thousand ("USD'000") except when otherwise indicated.

The consolidated financial statements for the six months ended 30 June 2010 was approved by the Directors on 28 September 2010.

            Foreign currency

The functional currencies of the entities in the Group have been determined to be Ringgit Malaysia ("RM"), and the unaudited interim consolidated financial information of the subsidiary undertakings have been drawn up in RM.

The results and financial position of the Group have been translated from its functional currency to its presentation currency for the respective year/periods at the following rates:

	30.6.2010		30.6.2009		31.12.2009
RM/USD
Assets and liabilities	3.2575		3.5225		3.4245
Income and expenses	3.2993		3.5898		3.5233

 

3.         Administrative expenses

Included in administrative expenses are audit, tax, legal and other professional fees amounting to USD464,000 (Year ended 31.12.2009: USD759,000; six months ended 30.6.2009: USD11,000).

4.         Other expenses

Included in other expenses are costs associated with the acquisition of subsidiaries amounting to USD212,000 (Year ended 31.12.2009: USD38,000; six months ended 30.6.2009: Nil). 

5.         Loss per share

The basic loss per share amounts are calculated by dividing the loss for the period attributable to owners of the parent by the weighted average number of ordinary shares outstanding during the period. 

The following tables reflect the loss and share data used in the computation of basic loss per share for the respective periods: 

		Six Months Ended 30.6.2010		Six Months Ended 30.6.2009		Year Ended 31.12.2009
		USD'000		USD'000		USD'000
		Unaudited		Unaudited		Audited
Loss attributable to owners of the parent		(2,009)		(72)		(1,371)
		Number of shares		Number of shares		Number of shares
		'000		'000		'000
Weighted average number of ordinary shares outstanding		29,577		20,019		20,019

For the purpose of basic loss per share computation, the weighted average number of ordinary shares outstanding is assumed to be 20,019,000 for the period ended 30 June 2009 for comparative purpose.

The Group does not have any diluted loss per share as there is no dilutive potential ordinary share during the current and previous periods. 

6.         Property, plant and equipment

			30.6.2010		30.6.2009				31.12.2009
			USD'000		USD'000				USD'000
			Unaudited		Unaudited				Audited
At cost
At 1 January			5,063		401				401
Additions			1,169		871				2,624
Acquisition of subsidiaries			-		-				2,016
Depreciation			(135)		(20)				(55)
Exchange differences			272		10				77
			6,369		1,262				5,063
Depreciation of property, plant and equipment capitalized to biological assets:			113		-					53

7.         Biological assets 

			30.6.2010		30.6.2009				31.12.2009
			USD'000		USD'000				USD'000
			Unaudited		Unaudited				Audited
At fair value
At 1 January			6,093		1,019				1,019
Additions			1,501		882				2,062
Acquisition of subsidiaries			-		-				2,941
Exchange differences			331		1				71
			7,925		1,902				6,093
Represented by:
Mature plantation			890		-				847
Immature plantation			5,996		1,274				4,537
Nursery			1,039		628				709
			7,925		1,902					6,093

Mature oil palm trees produce fresh fruit bunches("FFBs") which are used to produce Crude Palm Oil ("CPO"). The fair values of oil palm plantations are determined by using the discounted future cash flows of the underlying plantations.  The expected future cash flows of the oil palm plantations are determined using the projected selling prices of CPO in the market.

Significant assumptions made in determining the fair values of the mature oil palm plantations, using a discounted cash flow model, are as follows:

(a)        no new planting or re-planting activities are assumed;

(b)        oil palm trees have an average life that ranges from 28 years (31.12.2009: 28 years; 30.6.2009: 28 years), with the first three years as immature and the remaining years as mature;

(c)        discount rate used for the Group's plantation operations which is applied in the discounted future cash flows calculation is 8.9% (31.12.2009: 8.9%; 30.6.2009: 8.9%);

(d)        FFB price is derived by applying the oil extraction rate to the estimated CPO price of USD715 (31.12.2009: USD584; 30.6.2009: USD568) per metric tonne; and

(e)        yield per hectare of oil palm trees is based on the standard yield profile of the industry.

8.         Land use rights  

			30.6.2010		30.6.2009		31.12.2009
			USD'000		USD'000		USD'000
			Unaudited		Unaudited		Audited
At cost
At 1 January			20,950		6,178		6,178
Acquisition of subsidiaries			-		-		14,808
Amortisation charge			(198)		(51)		(105)
Exchange differences			1,072		(104)		69
			21,824		6,023		20,950

9.         Loans and borrowings   

			30.6.2010		30.6.2009		31.12.2009
			USD'000		USD'000		USD'000
			Unaudited		Unaudited		Audited
Current
Short term revolving credit			1,841		1,703		1,752
Term loans			-		-		765
Obligation under finance leases			60		8		27
			1,901		1,711		2,544
Non-Current
Term loans			23,668		1,396		19,817
Obligation under finance leases			271		35		118
			23,939		1,431		19,935
Total loans and borrowings
Short term revolving credit			1,841		1,703		1,752
Term loans			23,668		1,396		20,582
Obligation under finance leases			331		43		145
			25,840		3,142		22,479
Maturity of borrowings (excluding   obligations under finance leases)
Within one year			1,841		1,703		2,517
After one year but not more than five   years			9,840		1,396		13,496
More than five years			13,828		-		6,321
			25,509		3,099		22,334

Short-term revolving credit and term loans

The short term revolving credit is denominated in RM and bears interest at the rate of the bank's cost of fund plus 1.75%. It is repayable on demand and has a six months' rollover period upon maturity.

The term loans are denominated in RM and bear interest ranging from the rate of the bank's cost of fund plus 1.75% per annum to base lending rate plus 1% per annum. They are repayable over 6 years, after the grace period of 3 to 4 years.

The short term revolving credit and term loans are secured by 1st and 3rd parties legal charges over the rights to use a long term leasehold land of which the Group has prepaid the lease payments relating to the land as disclosed in Note 8 and is also supported by corporate guarantees from the Company and a director related company.

For all the BJ Corporation Sdn Bhd Banking Facilities, it is further supported by a Joint and Several Guarantee from Datuk Linggi, Dennis Melka and Graeme Brown.

For Asian Plantations (Sarawak) Sdn Bhd Banking Facility of RM55 million is further supported by a Joint and Several Guarantee from Datuk Linggi, Dennis Melka, Graeme Brown and Gerald Baring Linggi.

10.       Share capital   

	Six Months ended 30.6.2010		Six Months ended 30.6.2010		Six Months ended 30.6.2009		Six Months ended 30.6.2009		Year  ended 31.12.2009		Year ended 31.12.2009
	No. of shares				No. of shares				No. of shares
	'000		USD'000		'000		USD'000		'000		USD'000
	Unaudited		Unaudited		Unaudited		Unaudited		Audited		Audited
At 1 January	29,577		35,459		20,260		5,849		20,260		5,849
Adjustment due to pooling of interest method	-		-		-		-		(20,260)		(5,849)
Issuance of new shares as consideration for acquisition of a subsidiary company	-		-		-		-		22,500		26,905
Addition during the period/year	-		-		-		-		7,077		8,714
Share issuance expense	-		-		-		-		-		(160)
	29,577		35,459		20,260		5,849		29,577		35,459

11.       Related party disclosure

The Group had the following transactions with a related party during the periods:

		Six Months Ended 30.6.2010		Six Months Ended 30.6.2009		Year Ended 31.12.2009
		USD'000		USD'000		USD'000
		Unaudited		Unaudited		Audited
Transactions with Director: - Repayment of advances from a Director of a subsidiary		-		-		103

12.       Subsequent events

On 16 August 2010, the Company announced that it has entered into subscription agreements with a number of institutional investors for a total of 3,868,083 new ordinary shares at a subscription price of 110 pence per share (the "Subscription").  The Subscription raised approximately £4.25 million (equivalent to USD6.6 million), before expenses.

The Company has entered into a conditional agreement dated 1 September 2010 to acquire the entire issued share capital of Fortune (the "Proposed Acquisition"), which owns a partly developed palm oil plantation totaling approximately 5,000 hectares in Sarawak, Malaysia.

The total consideration for the Proposed Acquisition, which is subject to a number of conditions, is RM38.7 million (equivalent to USD12.2 million) and is payable in two tranches. The initial non-refundable tranche of RM3.9 million (equivalent to USD1.2 million) was settled on 1 September 2010 and a further tranche of RM34.8 million (equivalent to USD11.0 million) is to be paid by 29 November 2010.

 

END

 

 

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