TIDMAEP

RNS Number : 6576J

Anglo-Eastern Plantations PLC

20 August 2019

Anglo-Eastern Plantations PLC

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

Announcement of interim results for the six months ended 30 June 2019

The group comprising Anglo-Eastern Plantations PLC and its subsidiaries (the "Group"), is a major producer of palm oil and rubber with plantations across Indonesia and Malaysia, amounting to some 128,200 hectares, and has today released its results for the six months ended 30 June 2019.

Financial Highlights

 
                                          2019                2018                    2018 
                                      6 months            6 months               12 months 
                                    to 30 June               to 30          to 31 December 
                                                              June 
                                            $m                  $m                      $m 
                                   (unaudited)         (unaudited)               (audited) 
 Revenue                                  97.9               133.3                   250.9 
 (Loss) / Profit before tax 
  - before biological assets 
   ("BA") movement                       (0.2)                21.7                    33.2 
  - after BA movement                      1.6                22.0                    30.9 
 
   Basic Earnings per ordinary 
   share ("EPS") 
  - before BA movement               (6.72)cts            30.37cts                32.50cts 
  - after BA movement                (3.74)cts            30.90cts                28.79cts 
 Total net assets                        472.7               463.8                   464.6 
 

Enquiries:

 
 Anglo-Eastern Plantations PLC 
 Dato' John Lim Ewe Chuan          +44 (0)20 7216 4621 
 
 Panmure Gordon (UK) Limited 
 Dominic Morley                    +44 (0)20 7886 2954 
 

Chairman's Interim Statement

The interim results for the Group for the six months to 30 June 2019 are as follows:

Revenue for the six months to 30 June was $97.9 million, 27% lower than $133.3 million reported for the first six months of 2018. The Group's gross profit was $5.3 million compared to $25.2 million for the first six months of 2018. Overall profit before tax for the first half of 2019 decreased by 93% to $1.6 million (after BA movement) versus $22.0 million for the corresponding period in 2018. This was attributed mainly to lower Crude Palm Oil ("CPO") prices.

Fresh Fruit Bunches ("FFB") production for the first half of 2019 was 1% lower at 470,300mt compared to 477,400mt in the same period last year. The decrease in production was due to a lower production trend observed in Riau, Bengkulu and South Sumatera which was similarly experienced by other planters in the region. Bought-in crops, however, decreased by 15% to 402,900mt from 473,100mt consistent with lower crop production by other planters in Riau and Bengkulu.

Operational and financial performance

For the six months ended 30 June 2019, gross profit margin decreased to 5.4% from 18.9% as the Group experienced lower CPO, palm kernel and rubber prices. Higher operational costs and the increase in newly matured areas also compressed the operating profit margin.

CPO price ex-Rotterdam averaged $527/mt for the first six months to 30 June 2019, 20% lower than $661/mt over the same period in 2018. Our Group's average ex-mill price for CPO was lower at $466/mt for the same period (1H 2018: $564/mt).

Profit after tax for the six months ended 30 June 2019 was $0.3 million, 98% lower compared to a profit of $16.2 million for the first six months of 2018.

The resulting basic earnings per share for the period decreased by 112% to a loss of 3.74cts (1H 2018: 30.90cts).

The Group's balance sheet remains strong. Net assets as at 30 June 2019 were $472.7 million compared to $463.8 million as at 30 June 2018 and $464.6 million as at 31 December 2018. The increase in net assets was attributed to a $10.5 million exchange translation gain for the first half of 2019 and similar gain of $8.1 million for the twelve months since June 2018. The Indonesian Rupiah has appreciated by 2% against the US dollar in each of the two respective periods.

As at 30 June 2019, the Group had cash and cash equivalents of $100.1 million (1H 2018: $130.1 million) and borrowings of $16.1 million (1H 2018: $25.6 million), giving it a net cash position of $84.0 million, compared to $104.5 million as at 30 June 2018. This is largely due to further investment in new planting, maintenance of immature areas and repayment of loans.

Operating costs

Operating costs per hectare for the Indonesian operations were higher in the first half of 2019 compared to the same period in 2018 mainly due to an increase in wages, estate upkeep and mill maintenance. Higher operating costs were also partly attributed to a 5% increase in newly matured areas where the yield remains relatively low.

Production and Sales

 
                                         2019         2018             2018 
                                     6 months     6 months             Year 
                                   to 30 June   to 30 June   to 31 December 
                                           mt           mt               mt 
 Oil palm production 
 FFB 
 - all estates                        470,300      477,400        1,035,800 
 - bought-in from third parties       402,900      473,100        1,010,000 
 Saleable CPO                         177,500      193,800          418,800 
 Saleable palm kernels                 42,300       46,700           99,200 
 
 Oil palm sales 
 CPO                                  182,600      195,500          418,800 
 Palm kernels                          41,200       45,000           99,900 
 FFB sold outside                      23,300       14,000           24,700 
 
 Rubber production                        202          291              637 
 

The Group's six mills processed a total of 849,900mt in FFB for the first half of 2019, a 9% decrease compared to 936,500mt for the same period last year. The lower throughput was mainly due to lower production trend in Riau and Bengkulu. Production in Riau moderated after a bumper harvest last year when yield peaked at 29.4mt/ha while lower production in Bengkulu was likely weather induced. As a result of the low FFB prices, AEP estates in South Sumatera have started to sell their crops to local millers to save on the high transport costs to their own mills.

Overall CPO produced for the first half of 2019 was 8% lower at 177,500mt from 193,800mt. The oil extraction rate for the first half of 2019 improved marginally to 20.9% from 20.7% in the same period last year.

The Group continues to reduce its greenhouse gas ("GHG") emissions by capturing the methane gas released from its effluent treatment plants to produce electricity. The three biogas plants in the Group produced over 7,470 MWh of electricity compared to 7,060 MWh in the same period last year. The third biogas plant located in Kalimantan began commercial operation in February this year.

Commodity prices

The CPO price ex-Rotterdam for first half of 2019 averaged $527/mt, 20% lower than last year (1H 2018: $661/mt). The price has gradually trended downwards from the start of the year at $517/mt to close at $501/mt on 28 June 2019 and has since increased to $522/mt as at 14 August 2019. CPO prices are expected to remain subdued in the coming months due to oversupply, competitive pricing of other vegetable oils and projection of higher production in the second half of 2019.

Rubber price averaged $1,315/mt, 1% lower than 2018 (1H 2018: $1,329/mt).

Development

The Group's planted areas at 30 June 2019 comprised:

 
                             Total   Mature   Immature 
                                ha       ha         Ha 
 North Sumatera             19,194   15,311      3,883 
 Bengkulu                   16,981   16,981          - 
 Riau                        4,873    4,873          - 
 South Sumatera              6,271    5,344        927 
 Kalimantan                 15,118   12,858      2,260 
 Bangka                      1,183      538        645 
 Plasma                      3,423    1,818      1,605 
                           -------  -------  --------- 
 Indonesia                  67,043   57,723      9,320 
 Malaysia                    3,460    3,460          - 
                           -------  -------  --------- 
 Total: 30 June 2019        70,503   61,183      9,320 
                           -------  -------  --------- 
 Total: 31 December 2018    69,792   57,909     11,883 
                           -------  -------  --------- 
 Total: 30 June 2018        68,703   58,266     10,437 
                           -------  -------  --------- 
 

The Group's new planting for the first six months of 2019 totalled 481ha compared to 427ha for the same period last year. New planting is delayed as the Group awaits results of a peer review of high carbon stock sustainability study which will determine areas in Central Kalimantan which cannot be planted with oil palm due to high conservation and high carbon stock values.

The Group remains optimistic that planting will continue to pick up in the second half of 2019. The Group's total landholding comprises some 128,200ha, of which the planted area stands around 70,503ha (1H 2018: 68,703ha) with the balance of estimated plantable land at 21,000ha.

The earthwork for the fourth biogas reactor lagoon has been completed. The contractor will begin civil works and the lining of the lagoon membrane which are expected to be completed by the fourth quarter of 2019.The sinking and uneven settlement of soil which have affected the progress of the construction of the seventh mill in North Sumetera have been addressed and the need for additional filling is being monitored. Tenders will be invited for the civil and mechanical works by the third quarter of 2019. The mill is scheduled for completion by 2021.

Dividend

As in previous years, no interim dividend has been declared. A final dividend of 3.0 cents per share in respect of the year ended 31 December 2018 was paid on 12 July 2019.

Outlook

The Group expects CPO prices to remain subdued due to likely higher output and inventories across the market in the second half of 2019. Analysts also highlighted the spread between CPO futures and spot prices has narrowed over the past months signalling the market's negative sentiments on CPO prices going forward. We expect production volumes in the second half of the year to improve.

Principal risks and uncertainties

We believe that the potential impact on the Group of Britain's vote to leave the European Union is limited, unless Brexit causes a worldwide recession. Other than maintaining its corporate presence and listing in United Kingdom, all plantation and mill operations together with marketing are primarily based in Indonesia. The principal risks and uncertainties have broadly remained the same since the publication of the annual report for the year ended 31 December 2018.

A more detailed explanation of the risks relevant to the Group is on pages 21 to 25 and from pages 92 to 97 of the 2018 annual report which is available at https://www.angloeastern.co.uk/.

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

Madam Lim Siew Kim

Chairman

20 August 2019

Responsibility Statements

We confirm that to the best of our knowledge:

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

b) The Chairman's statement includes a fair review of the information required by DTR 4.2.7R (an indication of important events during the first six months and a description of the principal risks and uncertainties for the remaining six months of the year); and

c) The interim financial statements include a fair review of the information required by DTR 4.2.8R (material related party transactions in the six months ended 30 June 2019 and any material changes in the related party transactions described in the last Annual Report) of the Disclosure and Transparency Rules of the United Kingdom Financial Services Authority.

By order of the Board

Dato' John Lim Ewe Chuan

Executive Director, Corporate Finance and Corporate Affairs

20 August 2019

Condensed Consolidated Income Statement

 
 
                                         2019                               2018                           2018 
                                  6 months to 30 June                6 months to 30 June            Year to 31 December 
                                      (unaudited)                        (unaudited)                     (audited) 
                           --------------------------------  ---------------------------------  ------------------------  ---------- 
                    Notes     Result                             Result                              Result 
  Continuing                  before                             before                              before 
  operations                      BA         BA                      BA         BA                       BA           BA 
                            movement   movement       Total    movement   movement       Total     movement     movement       Total 
                                $000       $000        $000        $000       $000        $000         $000         $000        $000 
-----------------  ------  ---------  ---------              ----------  ---------  ----------  -----------  -----------  ---------- 
 Revenue                4     97,863          -      97,863     133,331          -     133,331      250,859            -     250,859 
 Cost of sales              (94,432)      1,845    (92,587)   (108,458)        332   (108,126)    (206,224)      (2,286)   (208,510) 
-----------------  ------  ---------  ---------  ----------  ----------  ---------  ----------  -----------  -----------  ---------- 
 Gross profit                  3,431      1,845       5,276      24,873        332      25,205       44,635      (2,286)      42,349 
 Administration 
  expenses                   (3,190)          -     (3,190)     (3,544)          -     (3,544)      (9,368)            -     (9,368) 
 Impairment 
  losses                     (2,337)          -     (2,337)           -          -           -      (4,339)            -     (4,339) 
-----------------  ------  ---------  ---------  ----------  ----------  ---------  ----------  -----------  -----------  ---------- 
 Operating (loss) 
  / 
  profit                     (2,096)      1,845       (251)      21,329        332      21,661       30,928      (2,286)      28,642 
 Exchange gains / 
  (losses)                       163          -         163     (1,222)          -     (1,222)      (1,250)            -     (1,250) 
 Finance income                2,257          -       2,257       2,374          -       2,374        5,048            -       5,048 
 Finance expense        3      (569)          -       (569)       (793)          -       (793)      (1,511)            -     (1,511) 
-----------------  ------  ---------  ---------  ----------  ----------  ---------  ----------  -----------  -----------  ---------- 
 (Loss) / Profit 
  before 
  tax                   4      (245)      1,845       1,600      21,688        332      22,020       33,215      (2,286)      30,929 
 Tax expense            5      (804)      (461)     (1,265)     (5,739)       (83)     (5,822)     (13,633)          571    (13,062) 
-----------------  ------  ---------  ---------  ----------  ----------  ---------  ----------  -----------  -----------  ---------- 
 (Loss) / Profit 
  for 
  the period                 (1,049)      1,384         335      15,949        249      16,198       19,582      (1,715)      17,867 
-----------------  ------  ---------  ---------  ----------  ----------  ---------  ----------  -----------  -----------  ---------- 
 Attributable to: 
 - Owners of the 
  parent                     (2,664)      1,181     (1,483)      12,037        209      12,246       12,882      (1,469)      11,413 
 - 
  Non-controlling 
  interests                    1,615        203       1,818       3,912         40       3,952        6,700        (246)       6,454 
-----------------  ------  ---------  ---------  ----------  ----------  ---------  ----------  -----------  -----------  ---------- 
                             (1,049)      1,384         335      15,949        249      16,198       19,582      (1,715)      17,867 
-----------------  ------  ---------  ---------  ----------  ----------  ---------  ----------  -----------  -----------  ---------- 
 Earnings per 
  share 
  for (loss) / 
  profit 
  attributable to 
  the 
  owners of the 
  parent 
  during the 
  period 
 - basic                7                         (3.74)cts                           30.90cts                  28.79cts 
 - diluted              7                         (3.74)cts                           30.87cts                  28.79cts 
 
 

Condensed Consolidated Statement of Comprehensive Income

 
                                                                         2019          2018             2018 
                                                                     6 months      6 months             Year 
                                                                   to 30 June    to 30 June   to 31 December 
                                                                  (unaudited)   (unaudited)        (audited) 
                                                                         $000          $000             $000 
---------------------------------------------------------------  ------------  ------------  --------------- 
 Profit for the period                                                    335        16,198           17,867 
---------------------------------------------------------------  ------------  ------------  --------------- 
 Other comprehensive expenses: 
 Items may be reclassified to profit or loss: 
         Profit / (loss) on exchange translation of foreign 
          operations                                                   10,523      (27,093)         (29,550) 
---------------------------------------------------------------  ------------  ------------  --------------- 
 Net other comprehensive income / (expenses) may 
  be reclassified to profit or loss                                    10,523      (27,093)         (29,550) 
---------------------------------------------------------------  ------------  ------------  --------------- 
 Items not to be reclassified to profit or loss: 
          Unrealised (loss) / gain on revaluation of leasehold 
           land, net of tax                                           (1,521)         (531)              137 
         Remeasurement of retirement benefits plan, net 
          of tax                                                            -             -              894 
---------------------------------------------------------------  ------------  ------------  --------------- 
 Net other comprehensive (expenses) / income not 
  being reclassified to profit or loss                                (1,521)         (531)            1,031 
---------------------------------------------------------------  ------------  ------------  --------------- 
 Total other comprehensive income / (expenses) 
  for the period, net of tax                                            9,002      (27,624)         (28,519) 
 Total comprehensive income / (expenses) for the 
  period                                                                9,337      (11,426)         (10,652) 
 Attributable to: 
 - Owners of the parent                                                 5,475      (10,906)         (11,527) 
 - Non-controlling interests                                            3,862         (520)              875 
---------------------------------------------------------------  ------------  ------------  --------------- 
                                                                        9,337      (11,426)         (10,652) 
---------------------------------------------------------------  ------------  ------------  --------------- 
 

Condensed Consolidated Statement of Financial Position

 
                                                       2019            2018                2018 
                                              as at 30 June   as at 30 June   as at 31 December 
                                                (unaudited)     (unaudited)           (audited) 
                                                       $000            $000                $000 
 ------------------------------------------  --------------  --------------  ------------------ 
 Non-current assets 
 Property, plant and equipment                      350,914         337,719             340,367 
 Receivables                                         13,343           8,746              11,020 
 Deferred tax assets                                 15,318          10,857              11,147 
-------------------------------------------  --------------  --------------  ------------------ 
                                                    379,575         357,322             362,534 
 ------------------------------------------  --------------  --------------  ------------------ 
 Current assets 
 Inventories                                         10,015          10,718               9,540 
 Tax receivables                                     38,521          34,327              44,310 
 Biological assets                                    6,041           6,695               4,093 
 Trade and other receivables                          6,159           6,308               5,203 
 Cash and cash equivalents                          100,123         130,127             112,212 
-------------------------------------------  --------------  --------------  ------------------ 
                                                    160,859         188,175             175,358 
 ------------------------------------------  --------------  --------------  ------------------ 
 Current liabilities 
 Loans and borrowings                              (13,328)        (11,844)            (11,078) 
 Trade and other payables                          (17,452)        (20,553)            (20,083) 
 Tax liabilities                                    (4,847)         (4,688)             (5,626) 
 Dividend payables                                  (1,262)         (1,617)                (37) 
-------------------------------------------  --------------  --------------  ------------------ 
                                                   (36,889)        (38,702)            (36,824) 
 ------------------------------------------  --------------  --------------  ------------------ 
 Net current assets                                 123,970         149,473             138,534 
-------------------------------------------  --------------  --------------  ------------------ 
 Non-current liabilities 
 Loans and borrowings                               (2,734)        (13,719)             (8,203) 
 Deferred tax liabilities                          (19,032)        (20,023)            (20,040) 
 Retirement benefits - net liabilities              (9,107)         (9,246)             (8,244) 
-------------------------------------------  --------------  --------------  ------------------ 
                                                   (30,873)        (42,988)            (36,487) 
 ------------------------------------------  --------------  --------------  ------------------ 
 Net assets                                         472,672         463,807             464,581 
-------------------------------------------  --------------  --------------  ------------------ 
 
 Issued capital and reserves attributable 
  to owners of the parent 
 Share capital                                       15,504          15,504              15,504 
 Treasury shares                                    (1,171)         (1,171)             (1,171) 
 Share premium                                       23,935          23,935              23,935 
 Capital redemption reserve                           1,087           1,087               1,087 
 Revaluation reserves                                49,864          50,789              51,308 
 Exchange reserves                                (236,768)       (244,088)           (245,170) 
 Retained earnings                                  523,815         526,545             526,487 
-------------------------------------------  --------------  --------------  ------------------ 
                                                    376,266         372,601             371,980 
 Non-controlling interests                           96,406          91,206              92,601 
-------------------------------------------  --------------  --------------  ------------------ 
 Total equity                                       472,672         463,807             464,581 
-------------------------------------------  --------------  --------------  ------------------ 
 

Condensed Consolidated Statement of Changes in Equity

 
                                                                                          Attributable to owners of the parent 
                                                            ----------------------------------------------------------------------------------------------- 
                                                                                                  Capital                                                     Non-controlling 
                                                                Share    Treasury      Share   redemption    Revaluation    Exchange    Retained                    interests      Total 
                                                              capital      shares    premium      reserve       reserves    Reserves    earnings      Total                       equity 
                                                                 $000        $000       $000         $000           $000        $000        $000       $000              $000       $000 
----------------------------------------------------------  ---------  ----------  ---------  -----------  -------------  ----------  ----------  ---------  ----------------  --------- 
 
 Balance at 31 December 
  2017                                                         15,504     (1,171)     23,935        1,087         51,288   (221,435)     515,884    385,092            91,799      476,891 
 Items of other comprehensive 
  income: 
 
   *    Unrealised gain on revaluation of leasehold land, 
  net 
        of tax                                                      -           -          -            -             20           -           -         20               117          137 
 
   *    Remeasurement of retirement benefits plan, net of 
  tax                                                               -           -          -            -              -           -         775        775               119          894 
 
   *    Loss on exchange translation of foreign operations          -           -          -            -              -    (23,735)           -   (23,735)           (5,815)     (29,550) 
----------------------------------------------------------  ---------  ----------  ---------  -----------  -------------  ----------  ----------  ---------  ----------------  ----------- 
 Total other comprehensive 
  income / (expenses)                                               -           -          -            -             20    (23,735)         775   (22,940)           (5,579)     (28,519) 
 Profit for the year                                                -           -          -            -              -           -      11,413     11,413             6,454       17,867 
----------------------------------------------------------  ---------  ----------  ---------  -----------  -------------  ----------  ----------  ---------  ----------------  ----------- 
 Total comprehensive income 
  / (expenses) for the year                                         -           -          -            -             20    (23,735)      12,188   (11,527)               875     (10,652) 
 Dividends paid                                                     -           -          -            -              -           -     (1,585)    (1,585)              (73)      (1,658) 
----------------------------------------------------------  --------- 
 Balance at 31 December 
  2018                                                         15,504     (1,171)     23,935        1,087         51,308   (245,170)     526,487    371,980            92,601      464,581 
----------------------------------------------------------  ---------  ----------  ---------  -----------  -------------  ----------  ----------  ---------  ----------------  ----------- 
 Items of other comprehensive 
  income: 
 
   *    Unrealised loss on revaluation of leasehold land, 
  net 
        of tax                                                      -           -          -            -        (1,444)           -           -    (1,444)              (77)      (1,521) 
 
   *    Gain on exchange translation of foreign operations          -           -          -            -              -       8,402           -      8,402             2,121       10,523 
----------------------------------------------------------  ---------  ----------  ---------  -----------  -------------  ----------  ----------  ---------  ----------------  ----------- 
 Total other comprehensive 
  (expenses) / income                                               -           -          -            -        (1,444)       8,402           -      6,958             2,044        9,002 
 (Loss) / Profit for the 
  period                                                            -           -          -            -              -           -     (1,483)    (1,483)             1,818          335 
----------------------------------------------------------  ---------  ----------  ---------  -----------  -------------  ----------  ----------  ---------  ----------------  ----------- 
 Total comprehensive (expenses) 
  / income for the period                                           -           -          -            -        (1,444)       8,402     (1,483)      5,475             3,862        9,337 
 Dividends payable                                                  -           -          -            -              -           -     (1,189)    (1,189)              (57)      (1,246) 
 Balance at 30 June 2019                                       15,504     (1,171)     23,935        1,087         49,864   (236,768)     523,815    376,266            96,406      472,672 
----------------------------------------------------------  ---------  ----------  ---------  -----------  -------------  ----------  ----------  ---------  ----------------  ----------- 
 
 
                                                                                            Attributable to owners of the parent 
                                                            --------------------------------------------------------------------------------------------------- 
                                                                                                  Capital                                                         Non-controlling 
                                                                Share    Treasury      Share   redemption    Revaluation    Exchange    Retained                        interests        Total 
                                                              capital      shares    premium      reserve       reserves    reserves    earnings          Total                         Equity 
                                                                 $000        $000       $000         $000           $000        $000        $000           $000              $000         $000 
----------------------------------------------------------  ---------  ----------  ---------  -----------  -------------  ----------  ----------  -------------  ----------------  ----------- 
 
 Balance at 31 December 
  2017                                                         15,504     (1,171)     23,935        1,087         51,288   (221,435)     515,884        385,092            91,799      476,891 
 Items of other comprehensive 
  income: 
 
   *    Unrealised loss on revaluation of leasehold land, 
  net 
        of tax                                                      -           -          -            -          (499)           -           -          (499)              (32)        (531) 
 
   *    Gain on exchange translation of foreign operations          -           -          -            -              -    (22,653)           -       (22,653)           (4,440)     (27,093) 
----------------------------------------------------------  ---------  ----------  ---------  -----------  -------------  ----------  ----------  -------------  ----------------  ----------- 
 Total other comprehensive 
  (expenses) / income                                               -           -          -            -          (499)    (22,653)           -       (23,152)           (4,472)     (27,624) 
 Profit for the period                                              -           -          -            -              -           -      12,246         12,246             3,952       16,198 
----------------------------------------------------------  ---------  ----------  ---------  -----------  -------------  ----------  ----------  -------------  ----------------  ----------- 
 Total comprehensive (expenses) 
  / income for the period                                           -           -          -            -          (499)    (22,653)      12,246       (10,906)             (520)     (11,426) 
 Dividends payable                                                  -           -          -            -              -           -     (1,585)        (1,585)              (73)      (1,658) 
 Balance at 30 June 2018                                       15,504     (1,171)     23,935        1,087         50,789   (244,088)     526,545        372,601            91,206      463,807 
----------------------------------------------------------  ---------  ----------  ---------  -----------  -------------  ----------  ----------  -------------  ----------------  ----------- 
 
 

Condensed Consolidated Statement of Cash Flows

 
 
                                             2019          2018               2018 
                                         6 months      6 months               Year 
                                       to 30 June    to 30 June     to 31 December 
                                      (unaudited)   (unaudited)          (audited) 
                                             $000          $000               $000 
-----------------------------------  ------------  ------------  ----------------- 
 Cash flows from operating 
  activities 
 Profit before tax                          1,600        22,020             30,929 
 Adjustments for: 
    Biological assets movement            (1,845)         (332)              2,286 
    Gains on disposal of property, 
     plant and equipment                     (21)           (8)               (21) 
    Depreciation                            8,511         8,375             16,752 
    Retirement benefit provisions             764           878              1,250 
    Net finance income                    (1,688)       (1,581)            (3,537) 
    Unrealised (gains) / losses 
     in foreign exchange                    (163)         1,222              1,250 
    Property, plant and equipment 
     written off                               46            17                620 
    Impairment losses                       2,337             -              4,339 
 Operating cash flows before 
  changes in working capital                9,541        30,591             53,868 
    Increase in inventories                 (246)       (1,877)              (746) 
    Increase in non-current, 
     trade and other receivables          (3,383)       (1,062)            (2,173) 
    (Decrease) / Increase in 
     trade and other payables             (2,774)         4,629              4,148 
-----------------------------------  ------------  ------------  ----------------- 
 Cash inflows from operations               3,138        32,281             55,097 
    Interest paid                           (569)         (793)            (1,511) 
    Retirement benefits paid                (103)          (83)              (257) 
    Overseas tax paid                       (162)      (19,636)           (36,508) 
-----------------------------------  ------------  ------------  ----------------- 
 Net cash flows from operating 
  activities                                2,304        11,769             16,821 
-----------------------------------  ------------  ------------  ----------------- 
 
 Investing activities 
 Property, plant and equipment 
    - purchases                          (15,992)      (13,279)           (30,282) 
    - sales                                    52            41                 42 
 Interest received                          2,257         2,374              5,048 
 Net cash used in investing 
  activities                             (13,683)      (10,864)           (25,192) 
-----------------------------------  ------------  ------------  ----------------- 
 
 
 Financing activities 
 Dividends paid to the holders 
  of the parent                              -         -      (1,585) 
 Dividends paid to non-controlling 
  interests                               (57)      (73)       (73) 
 Repayment of existing long-term 
  loans                                (3,219)   (2,313)    (8,594) 
 Net cash used in financing 
  activities                           (3,276)   (2,386)   (10,252) 
-----------------------------------  ---------  --------  --------- 
 Net decrease in cash and 
  cash equivalents                    (14,655)   (1,481)   (18,623) 
 
 Cash and cash equivalents 
 At beginning of period                112,212   139,489    139,489 
 Exchange gains / (losses)               2,566   (7,881)    (8,654) 
-----------------------------------  ---------  --------  --------- 
 At end of period                      100,123   130,127    112,212 
-----------------------------------  ---------  --------  --------- 
 
   Comprising: 
 Cash at end of period                 100,123   130,127    112,212 
-----------------------------------  ---------  --------  --------- 
 
 

Notes to the interim statements

   1.         Basis of preparation of interim financial statements 

These interim consolidated financial statements have been prepared in accordance with IAS 34, "Interim Financial Reporting", as adopted by the European Union. They do not include all disclosures that would otherwise be required in a complete set of financial statements and should be read in conjunction with the 2018 Annual Report. The financial information for the half years ended 30 June 2019 and 30 June 2018 does not constitute statutory accounts within the meaning of Section 434(3) of the Companies Act 2006 and has been neither audited nor reviewed pursuant to guidance issued by the Auditing Practices Board.

Basis of preparation

The annual financial statements of Anglo-Eastern Plantations PLC are prepared in accordance with IFRSs as adopted by the European Union. The comparative financial information for the year ended 31 December 2018 included within this report does not constitute the full statutory accounts for that period. The statutory Annual Report and Financial Statements for 2018 have been filed with the Registrar of Companies. The Independent Auditors' Report on the Annual Report and Financial Statements for 2018 was unqualified, did not draw attention to any matters by way of emphasis, and did not contain a statement under 498(2) or 498(3) of the Companies Act 2006.

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

Changes in accounting standards

The same accounting policies, presentation and methods of computation are followed in these condensed consolidated financial statements as were applied in the Group's latest annual audited financial statements, except for those that relate to new standards and interpretations effective for the first time for periods beginning on 1 January 2019 and will be adopted in the 2019 annual financial statements. The new standard impacting the Group that will be adopted in the annual financial statements for the year ended 31 December 2019, and which has given rise to changes in the Group's accounting policies is IFRS 16 Leases.

Details of the impact of this standard are given below. Other new and amended standards and Interpretations issued by the IASB that will apply for the first time in the next annual financial statements are not expected to impact the Group as they are either not relevant to the Group's activities or require accounting which is consistent with the Group's current accounting policies.

IFRS 16 Leases

IFRS 16 introduces a single lessee accounting model and requires a lessee to recognise assets and liabilities for all leases with a term of more than 12 months, unless the underlying asset is of low value. A lessee is required to recognise a right-of-use asset representing its right to use the underlying leased asset and a leased liability representing its obligation to make lease payments. The impact to the Group is immaterial.

   2.         Foreign exchange 
 
                                              2019          2018             2018 
                                          6 months      6 months             Year 
                                        to 30 June    to 30 June   to 31 December 
                                       (unaudited)   (unaudited)        (audited) 
 
            Closing exchange rates 
            Rp : $                          14,141        14,404           14,481 
            $ : GBP                           1.27          1.32             1.28 
            RM : $                            4.13          4.04             4.13 
 
            Average exchange rates 
            Rp : $                          14,197        13,753           14,246 
            $ : GBP                           1.29          1.38             1.33 
            RM : $                            4.12          3.94             4.04 
 
   3.         Finance expense 
 
                               2019          2018             2018 
                           6 months      6 months             Year 
                         to 30 June    to 30 June   to 31 December 
                        (unaudited)   (unaudited)        (audited) 
                               $000          $000             $000 
 
            Payable             569           793            1,511 
                       ------------  ------------  --------------- 
 
   4.         Segment information 
 
                              North                 South                                       Total 
                           Sumatera   Bengkulu   Sumatera      Riau   Bangka   Kalimantan   Indonesia   Malaysia      UK     Total 
                               $000       $000       $000      $000     $000         $000        $000       $000    $000      $000 
 6 months to 30 June 2019 
 (unaudited) 
    Total sales revenue 
    (all 
    external) 
 
   *    CPO, palm kernel 
   and FFB                   34,900     28,837        813    15,902      217       14,474      95,143        854       -    95,997 
 
   *    Rubber                  266          -          -         -        -            -         266          -       -       266 
 
   *    Shell nut               189        242          -       290        -           17         738          -       -       738 
 
   *    Biomass products        303          -          -         -        -            -         303          -       -       303 
     - Biogas products           33        229          -         -        -          123         385          -       -       385 
     - Others                    34         29         25         -        -           28         116         58       -       174 
                          ---------  ---------  ---------  --------  -------  -----------  ----------  ---------  ------  -------- 
     Total revenue           35,725     29,337        838    16,192      217       14,642      96,951        912       -    97,863 
                          ---------  ---------  ---------  --------  -------  -----------  ----------  ---------  ------  -------- 
 
     Profit / (loss) 
      before 
      tax                       701      1,509    (3,533)     3,941    (242)      (1,451)         925      (401)   (769)     (245) 
     BA movement                805        651         50      (42)       13          348       1,825         20       -     1,845 
                          ---------  ---------  ---------  --------  -------  -----------  ----------  ---------  ------  -------- 
     Profit / (loss) for 
      the 
      period before tax 
      per consolidated 
      income statement        1,506      2,160    (3,483)     3,899    (229)      (1,103)       2,750      (381)   (769)     1,600 
                          ---------  ---------  ---------  --------  -------  -----------  ----------  ---------  ------  -------- 
 
     Interest income          1,012        962          2       180        -           16       2,172         83       2     2,257 
     Depreciation           (2,026)    (2,142)    (1,205)     (447)    (135)      (2,306)     (8,261)      (250)       -   (8,511) 
     impairment losses            -          -      (115)         -        -      (2,222)     (2,337)          -       -   (2,337) 
     Inter-segment 
      transactions            2,514    (1,010)      (367)     (290)     (61)        (972)       (186)         58     128         - 
     Inter-segment 
      revenue                10,314        560        622         -        -          624      12,120          -       -    12,120 
     Tax expense            (2,730)       (59)      2,155   (2,216)      154        1,593     (1,103)      (117)    (45)   (1,265) 
 
     Total assets           176,332    120,118     45,785    33,772   12,600      124,385     512,992     21,553   5,889   540,434 
     Non-current assets     108,550     71,925     43,493    17,975   12,238      105,731     359,912     16,630   3,033   379,575 
     Non-current assets 
      - additions             4,377      2,127      1,521       111    1,935        5,540      15,611         95       -    15,706 
 
 
 
 
                              North                 South                                       Total 
                           Sumatera   Bengkulu   Sumatera      Riau   Bangka   Kalimantan   Indonesia   Malaysia        UK     Total 
                               $000       $000       $000      $000     $000         $000        $000       $000      $000      $000 
 6 months to 30 June 2018 
 (unaudited) 
    Total sales revenue 
    (all 
    external) 
 
   *    CPO, palm kernel 
   and FFB                   43,054     44,177          -    22,318      143       19,597     129,289      1,234         -   130,523 
 
   *    Rubber                  393          -          -         -        -            -         393          -         -       393 
 
   *    Shell nut               289        281          -       421        -           12       1,003          -         -     1,003 
 
   *    Biomass products        310          -          -         -        -            -         310          -         -       310 
     - Biogas products          226        266          -         -        -            -         492          -         -       492 
     - Others                   531          -         10        18        -           51         610          -         -       610 
                          ---------  ---------  ---------  --------  -------  -----------  ----------  ---------  --------  -------- 
     Total revenue           44,803     44,724         10    22,757      143       19,660     132,097      1,234         -   133,331 
                          ---------  ---------  ---------  --------  -------  -----------  ----------  ---------  --------  -------- 
 
     Profit / (loss) 
      before 
      tax                     5,191     10,303    (2,694)     7,208    (226)        3,121      22,903       (57)   (1,158)    21,688 
     BA movement                583         80       (56)      (28)      (2)        (241)         336        (4)         -       332 
                          ---------  ---------  ---------  --------  -------  -----------  ----------  ---------  --------  -------- 
     Profit / (loss) for 
      the 
      period before tax 
      per consolidated 
      income statement        5,774     10,383    (2,750)     7,180    (228)        2,880      23,239       (61)   (1,158)    22,020 
                          ---------  ---------  ---------  --------  -------  -----------  ----------  ---------  --------  -------- 
 
     Interest income            788      1,309          1       182        -           11       2,291         82         1     2,374 
     Depreciation           (2,008)    (2,033)    (1,276)     (463)    (119)      (2,215)     (8,114)      (261)         -   (8,375) 
     impairment losses            -          -          -         -        -            -           -          -         -         - 
     Inter-segment 
      transactions            2,569    (1,051)      (364)     (301)     (49)        (880)        (76)         46        30         - 
     Inter-segment 
      revenue                11,867        568      1,959         -        -          194      14,588          -         -    14,588 
     Tax expense            (3,613)    (2,177)      2,077   (2,802)      133          641     (5,741)       (52)      (29)   (5,822) 
 
     Total assets           168,247    147,978     40,952    34,332   11,305      111,967     514,781     24,261     6,455   545,497 
     Non-current assets     100,619     69,203     39,232    17,973   11,038       98,390     336,455     17,869     2,998   357,322 
     Non-current assets 
      - additions             3,786      1,597      1,382       315      677        5,417      13,174        105         -    13,279 
 
 
 
 
                              North                 South                                       Total 
                           Sumatera   Bengkulu   Sumatera      Riau   Bangka   Kalimantan   Indonesia   Malaysia        UK      Total 
                               $000       $000       $000      $000     $000         $000        $000       $000      $000       $000 
    Year to 31 December 2018 
    (audited) 
    Total sales revenue 
    (all 
    external) 
 
   *    CPO, palm kernel 
   and FFB                   84,771     79,652          1    43,970      261       34,848     243,503      2,092         -    245,595 
 
   *    Rubber                  792          -          -         -        -            -         792          -         -        792 
 
   *    Shell nut               651        432          -       930        -           34       2,047          -         -      2,047 
 
   *    Biomass products        914          -          -         -        -            -         914          -         -        914 
     - Biogas products          417        446          -         -        -            -         863          -         -        863 
     - Others                   519         38         18         -        -           73         648          -         -        648 
                          ---------  ---------  ---------  --------  -------  -----------  ----------  ---------  --------  --------- 
     Total revenue           88,064     80,568         19    44,900      261       34,955     248,767      2,092         -    250,859 
                          ---------  ---------  ---------  --------  -------  -----------  ----------  ---------  --------  --------- 
 
     Profit / (loss) 
      before 
      tax                    12,993     18,753    (7,445)    13,112    (531)        (557)      36,325      (894)   (2,216)     33,215 
     BA movement              (296)    (1,074)       (93)     (272)      (4)        (479)     (2,218)       (68)         -    (2,286) 
                          ---------  ---------  ---------  --------  -------  -----------  ----------  ---------  --------  --------- 
     Profit / (loss) for 
      the 
      period before tax 
      per consolidated 
      income statement       12,697     17,679    (7,538)    12,840    (535)      (1,036)      34,107      (962)   (2,216)     30,929 
                          ---------  ---------  ---------  --------  -------  -----------  ----------  ---------  --------  --------- 
 
     Interest income          1,594      2,978          3       318        -           20       4,913        133         2      5,048 
     Depreciation           (4,031)    (4,120)    (2,530)     (900)    (234)      (4,425)    (16,240)      (512)         -   (16,752) 
     impairment losses            -          -      (914)         -        -      (3,425)     (4,339)          -         -    (4,339) 
     Inter-segment 
      transactions            4,887    (2,021)      (700)     (579)     (94)      (1,870)       (377)        103       274          - 
     Inter-segment 
      revenue                24,409      1,608      3,710         -        -        1,049      30,776          -         -     30,776 
     Tax expense            (7,872)    (2,994)      1,862   (5,351)      151        1,154    (13,050)         19      (31)   (13,062) 
 
     Total assets           188,266    118,098     41,074    36,900   11,815      113,186     509,339     22,347     6,206    537,892 
     Non-current assets     103,648     70,237     39,672    17,884   11,588       99,738     342,767     16,783     2,984    362,534 
     Non-current assets 
      - additions             8,578      4,460      3,753       472    1,647       11,355      30,265        110         -     30,375 
 
 
 

In the 6 months to 30 June 2019, revenues from 4 customers of the Indonesian segment represent approximately $57.2m (1H 2018: $60.1m) of the Group's total revenues. In year 2018, revenues from 4 customers of the Indonesian segment represent approximately $115.4m of the Group's total revenues. An analysis of this revenue is provided below. Although Customer 1 to 3 each contribute over 10% of the Group's total revenue, there is no over reliance on these Customers as tenders are performed on a monthly basis. Two of the top four customers are the same as in the year to 31 December 2018.

 
                                    2019                  2018                2018 
                                6 months              6 months                Year 
                              to 30 June            to 30 June      to 31 December 
                             (unaudited)           (unaudited)           (audited) 
                           $m          %          $m         %        $m         % 
  Major Customers 
  Customer 1             21.8       22.3        18.6      14.0      37.1      14.8 
  Customer 2             16.9       17.2        15.3      11.5      29.6      11.8 
  Customer 3             10.4       10.6        14.7      11.0      24.9       9.9 
  Customer 4              8.1        8.3        11.5       8.6      23.8       9.5 
------------------  ---------  ---------  ----------  --------  --------  -------- 
  Total                  57.2       58.4        60.1      45.1     115.4      46.0 
------------------  ---------  ---------  ----------  --------  --------  -------- 
 
   5.         Tax expense 
 
                                       2019          2018             2018 
                                   6 months      6 months             Year 
                                 to 30 June    to 30 June   to 31 December 
                                (unaudited)   (unaudited)        (audited) 
                                       $000          $000             $000 
 
 Foreign corporation tax 
  - current year                      6,087         9,043           16,852 
 Foreign corporation tax 
  - prior year                            -             6               70 
 Deferred tax adjustment 
  - origination and reversal 
  of temporary differences          (4,822)       (3,227)          (3,860) 
                                      1,265         5,822           13,062 
                               ------------  ------------  --------------- 
 
   6.         Dividend 

The final and only dividend in respect of 2018, amounting to 3.0 cents per share, or $1,189,091 was paid on 12 July 2019 (2017: 4.0 cents per share, or $1,585,455, paid on 13 July 2018). As in previous years, no interim dividend has been declared.

   7.         Earnings per ordinary share ("EPS") 
 
                                                     2019          2018             2018 
                                                 6 months      6 months             Year 
                                               to 30 June    to 30 June   to 31 December 
                                              (unaudited)   (unaudited)        (audited) 
                                                     $000          $000             $000 
 
          (Loss) / Profit for the period 
           attributable to owners of the 
           Company before BA movement             (2,664)        12,037           12,882 
          BA movement                               1,181           209          (1,469) 
                                             ------------  ------------  --------------- 
          Earnings used in basic and 
           diluted EPS                            (1,483)        12,246           11,413 
                                             ------------  ------------  --------------- 
 
                                                   Number        Number           Number 
                                                     '000          '000             '000 
         Weighted average number of 
          shares in issue in the period 
          - used in basic EPS                      39,636        39,636           39,636 
          - dilutive effect of outstanding 
           share options                                -            33                - 
                                             ------------  ------------  --------------- 
          - used in diluted EPS                    39,636        39,669           39,636 
                                             ------------  ------------  --------------- 
 
         Basic EPS before BA movement           (6.72)cts      30.37cts         32.50cts 
         Basic EPS after BA movement            (3.74)cts      30.90cts         28.79cts 
 
         Dilutive EPS before BA movement        (6.72)cts      30.34cts         32.50cts 
         Dilutive EPS after BA movement         (3.74)cts      30.87cts         28.79cts 
 
   8.         Fair value measurement of financial instruments 

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

 
                                          2019                   2018                2018 
                                      6 months               6 months                Year 
                                    to 30 June             to 30 June      to 31 December 
                                   (unaudited)            (unaudited)           (audited) 
                             Carrying     Fair      Carrying     Fair   Carrying     Fair 
                               amount    value        amount    value     amount    value 
                                 $000     $000          $000     $000       $000     $000 
 Non-current receivables 
 Due from non-controlling 
  interests                     3,022    1,850         2,977    1,837      2,965    1,833 
 Due from cooperatives 
  under Plasma 
  scheme                       10,321    7,407         5,769    5,495      8,055    6,240 
                               13,343    9,257         8,746    7,332     11,020    8,073 
                            ---------  -------  ------------  -------  ---------  ------- 
 
 Borrowings due 
  after one year 
 Long-term loan                 2,734    2,473        13,719   13,403      8,203    7,742 
                            ---------  -------  ------------  -------  ---------  ------- 
 
 
 

Financial instruments not measured at fair value include cash and cash equivalents, trade and other receivables, trade and other payables, and borrowings due within one year.

Due to their short-term nature, the carrying value of cash and cash equivalents, trade and other receivables, trade and other payables and borrowings due within one year approximates their fair value.

All non-current receivables and long-term loan are classified as Level 3 in the fair value hierarchy.

The valuation techniques and significant unobservable inputs used in determining the fair value measurement of non-current receivables and borrowings due after one year, as well as the inter-relationship between key unobservable inputs and fair value, are set out in the table below:

 
 Item                 Valuation approach       Inputs used    Inter-relationship 
                                                               between key unobservable 
                                                               inputs and fair 
                                                               value 
-----------------  -------------------------  ------------  --------------------------- 
 
     Non-current receivables 
 Due from             Based on cash flows      Discount       The higher the 
  non-controlling      discounted using         rate           discount rate, 
  interests            current lending rate                    the lower the 
                       of 6% (1H 2018 and                      fair value. 
                       2018: 6%). 
 Due from             Based on cash flows      Discount       The higher the 
  cooperatives         discounted using         rate           discount rate, 
  under Plasma         an estimated current                    the lower the 
  scheme               lending rate of 6.58%                   fair value. 
                       (1H 2018: 6.05%, 
                       2018: 6.58%). 
 Borrowings due after one year 
 Long-term            Based on cash flows      Discount       The higher the 
  loan                 discounted using         rate           discount rate, 
                       an estimated current                    the lower the 
                       lending rate of 6.58%                   fair value. 
                       (1H 2018: 6.05%, 
                       2018: 6.58%). 
 
   9.         Report and financial information 

Copies of the interim report for the Group for the period ended 30 June 2019 are available on the AEP website at https://www.angloeastern.co.uk/.

This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact rns@lseg.com or visit www.rns.com.

END

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