Anglo-Eastern Plant - Interim Results for six months ended 30 June 2022
25/08/2022 11:06
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RNS Number : 2433X Anglo-Eastern Plantations PLC 25 August 2022
Anglo-Eastern Plantations Plc
("AEP", "Group" or "Company")
Announcement of interim results for the six months ended 30 June 2022
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, has today released its results for the six months
ended 30 June 2022.
Financial Highlights
Continuing operations 2021
6 months
2022
to 30 June (restated) 2021
6 months
$m
12 months
to 30 June
to 31 December
$m (unaudited)
$m
(unaudited) (audited)
Revenue 249.2 197.7 433.4
Profit before tax
- before biological assets ("BA") movement 94.8 56.4 132.7
- after BA movement 89.5 60.2 137.1
Basic Earnings per ordinary share ("EPS")
- before BA movement 153.51cts 93.76cts 235.25cts
- after BA movement 144.73cts 100.11cts 242.34cts
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 2022 are as
follows:
Revenue from continuing operations for the six months to 30 June 2022 was
$249.2 million, 26% higher than $197.7 million reported for the same period
of 2021. The Group's gross profit from continuing operations was $90.3
million compared to $61.8 million for the first six months of 2021. Overall
profit before tax, after biological assets ("BA") movement, from continuing
operations for the first half of 2022 was 49% higher at $89.5 million against
$60.2 million for the corresponding period in 2021. The overall profit from
continuing operations includes a net reversal of impairment losses of $0.2
million for the first half of 2022 compared to a reversal of impairment loss
of $0.1 million for the first half of 2021. The BA movement adjustment from
continuing operations for the first half of 2022 was a debit of $5.3 million
compared to a credit of $3.9 million in the last period. The higher profit was
attributed to the higher Crude Palm Oil ("CPO") prices.
Fresh Fruit Bunches ("FFB") production from continuing operations for the
first half of 2022 was 3% lower at 550,800mt compared to 569,100mt for the
same period in the prior year due to lower production in Bengkulu and
Kalimantan regions. The harvest in Bengkulu was lower by 13% primarily due to
a reduction of almost 1,000ha of matured area of which 428ha was replanted in
the second half of 2021 while another 551ha was cleared for replanting in the
first half of 2022. During 1Q 2022 the public roads in Kurun township were
closed for a month because of extremely bad weather which affected the
transportation of crops and in turn caused a 9% decline in the harvest in
Central Kalimantan. Younger palms in North Sumatera continue to out-performed
the rest of the regions by registering a growth of 6% against last year.
Bought-in crops for the first half of 2022 also decreased by 4% to 557,600mt
from 583,400mt. The increased purchase of outside crops in North Sumatera (6%)
and Kalimantan (9%) could not off-set a 19% decrease in crop purchase in the
Bengkulu region. The significant decrease in the Bengkulu region is caused by
the reopening of a mill of one of the suppliers following a shutdown for
maintenance in 2021. In addition, some of AEP's mills had to reduce external
crop purchases due to the CPO storage tanks reaching their maximum storage
capacities as inventory built-up during the export ban.
Operational and financial performance
For the six months ended 30 June 2022, gross profit margin from continuing
operations increased to 36.2% from 31.3% as the Group experienced higher CPO
and palm kernel prices.
CPO price ex-Rotterdam averaged $1,640/mt for the first six months to 30 June
2022, 46% higher than $1,122/mt over the same period in 2021. As a result, the
Group's average ex-mill price was higher by 47% at $1,035/mt for the same
period (H1 2021: $706/mt). The ex-mill prices are normally at a discount to
ex-Rotterdam prices as buyers are required to pay logistic charges and
Indonesian CPO tax and levy. The Group also benefited from higher palm kernel
prices which was 66% higher at the average price of $808/mt against $486/mt
last year.
Profit after tax from continuing operations for the six months ended 30 June
2022 was 45% higher at $68.8 million, compared to a profit after tax from
continuing operations of $47.3 million for the first six months of 2021.
The resulting basic earnings per share from continuing operations for the
period was 144.73cts (H1 2021: 100.11cts).
The Group's balance sheet remains strong with no outstanding bank loans. Net
assets as at 30 June 2022 were $585.3 million compared to $496.6 million as at
30 June 2021 and $542.1 million as at 31 December 2021. The increase in net
assets from the last interim report was attributed to higher profit and higher
inventories. Inventories, comprising mainly of CPO, built up to $41 million
against $15 million as at 30 June 2021 due to the CPO export ban in Indonesia
which is explained in more detail under commodity prices below. The Indonesian
Rupiah has depreciated by 4% against the US dollar in the first half of 2022.
As at 30 June 2022, the Group had cash and cash equivalents including all
fixed deposits with banks of $246.8 million (H1 2021: $160.7 million, 31
December 2021: $219.7 million).
Operating costs
Operating costs for the Indonesian operations were higher in the first half
of 2022 compared to the same period in 2021 mainly due to higher prices paid
for third party crops, higher costs of maintaining plantations and mills and
higher harvesting costs arising from the increased matured area.
Fertiliser costs rose sharply by 80% in the first half of 2022 to $15.8
million from $8.8 million for the corresponding period last year. Transport
costs have also increased significantly by 56% to $2.8 million from $1.8
million for the corresponding period last year as diesel prices have
increased.
Production and Sales
2022 2021 2021
6 months 6 months Year
to 30 June to 30 June to 31 December
mt mt mt
Oil palm production
FFB
- all estates from continuing operations 550,800 569,100 1,152,400
- estates from discontinued operations 21,500 17,400 37,200
- bought-in from third parties 557,600 583,400 1,142,200
Saleable CPO 227,800 238,700 473,200
Saleable palm kernels 54,400 57,100 97,100
Oil palm sales
CPO 200,000 237,900 477,600
Palm kernels 48,900 55,400 113,400
FFB sold outside 17,800 13,400 29,400
Rubber production 168 206 425
The Group's six mills processed a total of 1,112,100mt in FFB for the first
half of 2022, a 4% decrease compared to 1,156,500mt for the same period last
year.
Overall CPO produced for the first half of 2022 was 5% lower at 227,800mt from
238,700mt. The oil extraction rate for the first half of 2022 was 20.5%
compared to 20.6% in the same period last year.
Commodity prices
The CPO price ex-Rotterdam for the first half of 2022 averaged $1,640/mt, 46%
higher than last year (H1 2021: $1,122/mt). The CPO price started the year at
$1,350/mt, gradually trending upwards to peak in March 2022 at $2,000/mt
before dropping to $1,420/mt towards the middle of June, before recovering to
close at $1,500/mt at 30 June 2022. The rally in the first three months of
2022 was built upon; speculation of unfavourable weather conditions in prime
soybean-producing countries which have adversely affected the supply of
soybean oil (of which CPO is the closest substitute), the gradual re-opening
of the world economy after the ravage of Covid-19 and the disruption to
supplies because of the Russia-Ukraine conflict. The Indonesian government's
move to ban the export of CPO and refined palm oil from 28 April 2022 to 22
May 2022 added further volatility to global edible oil prices. CPO prices have
since retracted to lower levels due to high inventory of CPO built up during
the export ban. The Indonesian government is constantly refining its policies
to accelerate exports of CPO as well as to contain the price of domestic
cooking oil which could trigger more volatility in prices.
Rubber price averaged $1,670/mt, 4% lower than H1 2021 at $1,734/mt.
Development
The Group's planted areas at 30 June 2022 comprised:
Total Mature Immature
Continuing operations Ha ha Ha
North Sumatera 19,107 18,851 256
Bengkulu 16,557 14,912 1,645
Riau 4,836 4,836 -
Kalimantan 17,409 14,889 2,520
Bangka 2,564 1,065 1,499
Plasma 3,586 2,268 1,318
Indonesia 64,059 56,821 7,238
Malaysia 3,453 3,453 -
67,512 60,274 7,238
Discontinued operations
South Sumatera 6,662 6,064 598
Plasma 1,065 1,020 45
7,727 7,084 643
Total: 30 June 2022 75,239 67,358 7,881
Total: 31 December 2021 75,204 65,921 9,283
Total: 30 June 2021 74,131 66,204 7,927
The Group's new planting and replanting for the first six months of 2022
totalled 439ha compared to 1,025ha for the same period last year. In addition,
Plasma planting for the period was 152ha (H1 2021: 187ha).
The Group remains optimistic that it will meet substantially its reduced total
planting target of 1,900ha (including replanting) in 2022. The Group's total
landholding from its continuing operations comprises some 90,690ha, of which
the planted area stands at around 67,512ha (H1 2021: 66,623ha) with the
balance of estimated plantable land at 10,850ha (H1 2021: 11,590ha).
The construction of the seventh mill in North Sumatera, which has been delayed
by the frequent lockdowns caused by the pandemic in the country, is nearing
completion. It is making good progress as most machineries have been
prefabricated and are being assembled on site. Some items like the steam
turbine and decanter have arrived at the local port and are awaiting delivery
to the construction site. The mill is expected to be completed before the year
end. The costs of construction have reached about $22 million against an
earlier estimate of $19 million.
In the meantime, an external consultant has been appointed to undertake an
environmental study to advise compliance criteria to apply for the necessary
permits to build the eighth mill in Kalimantan.
Dividend
As in previous years, no interim dividend has been declared. A final dividend
of 5.0 cents per share in respect of the year ended 31 December 2021 was paid
on 15 July 2022.
Outlook
CPO prices are expected to weaken in the second half of 2022 as the industry
enters into the high production season. In addition, the Indonesian
government's decision to waive the export levy until the end of August 2022 in
its effort to flush out and reduce its stockpile of palm oil could push prices
even lower. An agreement between Ukraine and Russia to reopen the ports in the
Black Sea to allow the export of commodities, including sunflower oil, from
the region would also negatively impact on palm oil prices. Economists fear
that inflationary pressure arising from higher commodity prices could trigger
a worldwide recession in the coming months which could dampen demand for CPO.
It is increasingly apparent that 2022 will be a year of two halves, with
record CPO prices in the first half of 2022 and much lower prices in the
second half. On a positive note, the Indonesian government's determination to
develop and increase the biodiesel blending to B35 and B40 from B30 in the
near future would help enhance the domestic consumption and absorb a higher
production of CPO.
Tribute
The Board has previously announced its profound sadness of the passing of our
ex-Chairman, Madam Lim Siew Kim on 14 July 2022. Madam Lim joined the Board in
1993 and was the Non-Executive Chairman from 2011 until her recent retirement.
During her tenure, the Group grew in profitability and the business expanded
to what it is today. The Board of Directors had conveyed their condolences to
the family members at the time and would like to formally record their
appreciation and thanks for Madam Lim's invaluable guidance and advice during
her tenure on the Board.
Principal risks and uncertainties
The principal risks and uncertainties, including the risks due to the
Coronavirus pandemic, have broadly remained the same since the publication of
the annual report for the year ended 31 December 2021.
A more detailed explanation of the risks relevant to the Group is on pages 42
to 47 and from pages 130 to 135 of the 2021 annual report which is available
at https://www.angloeastern.co.uk (http://www.angloeastern.co.uk) /.
Mr Jonathan Law Ngee Song
Chairman
25 August 2022
Responsibility Statements
We confirm that to the best of our knowledge:
a) The unaudited interim financial statements have been prepared
in accordance with International Accounting Standards ("IAS") 34: Interim
Financial Reporting as adopted by the European Union;
b) The Chairman's interim statement includes a fair review of the
information required by Disclosure and Transparency Rule ("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 2022 and any material changes in the related party
transactions described in the last Annual Report) of the DTR of the United
Kingdom Financial Conduct Authority.
By order of the Board
Dato' John Lim Ewe Chuan
Executive Director, Corporate Finance and Corporate Affairs
25 August 2022
Condensed Consolidated Income Statement
2022
6 months to 30 June 2021 2021
(unaudited) 6 months to 30 June (restated) Year to 31 December
(unaudited) (audited)
Notes Result before BA movement* BA movement Total Result BA movement Total Result BA movement Total
$000
$000
$000
$000
$000
$000
$000
before BA movement* before BA movement*
$000
$000
Continuing operations
Revenue 4 249,229 - 249,229 197,678 - 197,678 433,421 - 433,421
Cost of sales (153,633) (5,314) (158,947) (139,743) 3,865 (135,878) (300,354) 4,349 (296,005)
Gross profit 95,596 (5,314) 90,282 57,935 3,865 61,800 133,067 4,349 137,416
Administration expenses (3,015) - (3,015) (3,317) - (3,317) (8,764) - (8,764)
Reversal of impairment 622 - 622 133 - 133 5,437 - 5,437
Impairment losses (366) - (366) - - - (585) - (585)
(Provision) / Reversal for expected credit loss
(6) - (6) (1) - (1) 177 - 177
Operating profit 92,831 (5,314) 87,517 54,750 3,865 58,615 129,332 4,349 133,681
Exchange gains 311 - 311 298 - 298 212 - 212
Finance income 5 1,714 - 1,714 1,331 - 1,331 3,214 - 3,214
Finance expense 5 (8) - (8) (12) - (12) (24) - (24)
Profit before tax 6 94,848 (5,314) 89,534 56,367 3,865 60,232 132,734 4,349 137,083
Tax expense 7 (21,865) 1,169 (20,696) (12,128) (854) (12,982) (24,784) (958) (25,742)
Profit for the period from continuing operations 72,983 (4,145) 68,838 44,239 3,011 47,250 107,950 3,391 111,341
(Loss) / gain on discontinued operations, net of tax (297) (75) (372) (1,512) 67 (1,445) (28,471) 50 (28,421)
72,686 (4,220) 68,466 42,727 3,078 45,805 79,479 3,441 82,920
Profit for the period attributable to:
- Owners of the parent 60,582 (3,551) 57,031 35,746 2,581 38,327 65,485 2,856 68,341
- Non-controlling interests 12,104 (669) 11,435 6,981 497 7,478 13,994 585 14,579
72,686 (4,220) 68,466 42,727 3,078 45,805 79,479 3,441 82,920
Profit for the period from continuing operations attributable to:
- Owners of the parent 60,845 (3,480) 57,365 37,163 2,517 39,680 93,245 2,809 96,054
- Non-controlling interests 12,138 (665) 11,473 7,076 494 7,570 14,705 582 15,287
72,983 (4,145) 68,838 44,239 3,011 47,250 107,950 3,391 111,341
Earnings per share attributable to the owners of the parent during the period
Profit
- basic and diluted 9 143.89cts 96.70cts 172.42cts
Profit from continuing operations
- basic and diluted 9 144.73cts 100.11cts 242.34cts
* The total column represents the IFRS figures and the result before BA
movement is an Alternative Performance Measure ("APM") which reflects the
Group's results before the movement in fair value of biological assets has
been applied. We have opted to additionally disclose this APM as the BA
movement is considered to be a fair value calculation which does not
appropriately represent the Group's result for the year.
Condensed Consolidated Statement of Comprehensive Income
2022 2021 2021
6 months 6 months Year
to 30 June to 30 June to 31 December
(unaudited) (unaudited) (audited)
$000 $000 $000
Profit for the period 68,466 45,805 82,920
Other comprehensive expenses:
Items may be reclassified to profit or loss:
Loss on exchange translation of foreign operations (22,933) (13,110) (5,429)
Net other comprehensive expenses may be reclassified to profit or loss (22,933) (13,110) (5,429)
Items not to be reclassified to profit or loss:
Remeasurement of retirement benefits plan, net of tax - - 1,086
Net other comprehensive income not being reclassified to profit or loss - - 1,086
Total other comprehensive expenses for the period, net of tax (22,933) (13,110) (4,343)
Total comprehensive income for the period 45,533 32,695 78,577
Attributable to:
- Owners of the parent 38,570 27,815 64,993
- Non-controlling interests 6,963 4,880 13,584
45,533 32,695 78,577
Condensed Consolidated Statement of Financial Position
2022 2021 2021
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 259,545 275,177 260,532
Investment 49 - 49
Receivables 22,591 24,153 22,000
Deferred tax assets 1,674 14,730 4,324
283,859 314,060 286,905
Current assets
Inventories 41,012 15,038 14,316
Income tax receivables 4,766 10,034 5,072
Other tax receivables 52,054 34,717 45,423
Biological assets 7,133 12,443 12,803
Trade and other receivables 4,457 5,492 5,182
Short-term investments 59,495 1,539 1,439
Cash and cash equivalents 187,339 159,140 218,249
356,256 238,403 302,484
Assets in disposal groups classified as held for sale 13,000 - 13,210
369,256 238,403 315,694
Current liabilities
Trade and other payables (40,175) (27,223) (32,533)
Income tax liabilities (11,474) (11,863) (13,139)
Other tax liabilities (566) (1,171) (1,615)
Dividend payables (2,007) (420) (25)
Lease liabilities (152) (244) (240)
(54,374) (40,921) (47,552)
Net current assets 314,882 197,482 268,142
Non-current liabilities
Deferred tax liabilities (1,259) (625) (1,330)
Retirement benefits - net liabilities (12,089) (14,220) (11,499)
Lease liabilities (68) (90) (110)
(13,416) (14,935) (12,939)
Net assets 585,325 496,607 542,108
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
Exchange reserves (260,368) (248,111) (241,907)
Retained earnings 697,631 611,608 642,582
476,618 402,852 440,030
Non-controlling interests 108,707 93,755 102,078
Total equity 585,325 496,607 542,108
Condensed Consolidated Statement of Changes in Equity
Attributable to owners of the parent
Capital Non-controlling
Share Treasury Share redemption Exchange Retained interests Total
capital shares premium reserve Reserves earnings Total equity
$000 $000 $000 $000 $000 $000 $000 $000 $000
Balance at 31 December 2020 15,504 (1,171) 23,935 1,087 (237,599) 573,677 375,433 88,875 464,308
Items of other comprehensive income:
-Remeasurement of retirement benefits plan, net of tax - - - - - 960 960 126 1,086
-Loss on exchange translation of foreign operations - - - - (4,308) - (4,308) (1,121) (5,429)
Total other comprehensive (expenses) / income - - - - (4,308) 960 (3,348) (995) (4,343)
Profit for the year - - - - - 68,341 68,341 14,579 82,920
Total comprehensive (expenses) / income for the year - - - - (4,308) 69,301 64,993 13,584 78,577
Dividends paid - - - - - (396) (396) (381) (777)
Balance at 31 December 2021 15,504 (1,171) 23,935 1,087 (241,907) 642,582 440,030 102,078 542,108
Items of other comprehensive income:
-Remeasurement of retirement benefits plan, net of tax - - - - - - - - -
-Loss on exchange translation of foreign operations - - - - (18,461) - (18,461) (4,472) (22,933)
Total other comprehensive (expenses) / income - - - - (18,461) - (18,461) (4,472) (22,933)
Profit for the period - - - - - 57,031 57,031 11,435 68,466
Total comprehensive (expenses) / income for the period - - - (18,461) 57,031 38,570 6,963 45,533
Dividends payable - - - - - (1,982) (1,982) (334) (2,316)
Balance at 30 June 2022 15,504 (1,171) 23,935 1,087 (260,368) 697,631 476,618 108,707 585,325
Attributable to owners of the parent
Capital Non-controlling
Share Treasury Share redemption Exchange Retained interests Total
capital shares premium reserve reserves earnings Total Equity
$000 $000 $000 $000 $000 $000 $000 $000 $000
Balance at 31 December 2020 15,504 (1,171) 23,935 1,087 (237,599) 573,677 375,433 88,875 464,308
Items of other comprehensive income:
-Loss on exchange translation of foreign operations - - - - (10,512) - (10,512) (2,598) (13,110)
Total other comprehensive expenses - - - - (10,512) - (10,512) (2,598) (13,110)
Profit for the period - - - - - 38,327 38,327 7,478 45,805
Total comprehensive (expenses) / income for the period - - - - (10,512) 38,327 27,815 4,880 32,695
Dividends payable - - - - - (396) (396) - (396)
Balance at 30 June 2021 (after restatement) 15,504 (1,171) 23,935 1,087 (248,111) 611,608 402,852 93,755 496,607
Condensed Consolidated Statement of Cash Flows
2022 2021
2021
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 89,534 60,232 137,083
Adjustments for:
Biological assets movement 5,314 (3,865) (4,349)
(Gain) / Loss on disposal of property, plant and equipment (49) (1) 24
Depreciation 8,370 8,460 16,994
Retirement benefit provisions 1,100 1,222 103
Net finance income (1,706) (1,319) (3,190)
Unrealised gain in foreign exchange (311) (298) (212)
Property, plant and equipment written off 80 169 72
Reversal of impairment (256) (133) (4,852)
Provision / (Reversal) for expected credit loss 6 1 (177)
Operating cash flows before changes in working capital 102,082 64,468 141,496
(Increase) in inventories (27,157) (2,579) (2,649)
Decrease / (Increase) in non-current, trade and other receivables 584 (3,322) (517)
Increase in trade and other payables 8,849 1,039 6,683
Cash inflows from operations 84,358 59,606 145,013
Retirement benefits paid (137) (132) (487)
Overseas tax paid (28,935) (1,286) (12,359)
Operating cash flows from continuing operations 55,286 58,188 132,167
Operating cash flows (used in) / from discontinued operations (850) 2,884 (821)
Net cash flows from operating activities 54,436 61,072 131,346
Investing activities
Property, plant and equipment
- purchases (17,763) (10,592) (26,374)
- sales 51 1 413
Interest received 1,714 1,331 3,214
Increase in receivables from cooperatives under plasma scheme (1,395) (2,032) (1,985)
Investment in share equity - - (49)
Placement of fixed deposits with original maturity of more than three (59,495) - (1,439)
months
Withdrawal of fixed deposits with original maturity of more than three months 1,439 418 1,957
Cash used in investing activities from continuing operations (75,449) (10,874) (24,263)
Cash used in investing activities from discontinued operations (887) (2,988) (1,594)
Net cash used in investing activities (76,336) (13,862) (25,857)
Financing activities
Dividends paid to the holders of the parent - - (395)
Dividends paid to non-controlling interests (334) - (381)
Repayment of lease liabilities - principal (112) (106) (228)
Repayment of lease liabilities - interest (8) (12) (24)
Cash used in financing activities from continuing operations (454) (118) (1,028)
Cash used in financing activities from discontinued operations - - -
Net cash used in financing activities (454) (118) (1,028)
Net (decrease) / increase in cash and cash equivalents (22,354) 47,092 104,461
Cash and cash equivalents
At beginning of period 218,249 115,211 115,211
Exchange losses (8,556) (3,163) (1,423)
At end of period 187,339 159,140 218,249
Comprising:
Cash at end of period 187,339 159,140 218,249
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". 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 2021 Annual Report. The
financial information for the half years ended 30 June 2022 and 30 June 2021
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 UK adopted International Accounting Standards. The
comparative financial information for the year ended 31 December 2021 included
within this report does not constitute the full statutory accounts for that
period. The statutory Annual Report and Financial Statements for 2021 have
been filed with the Registrar of Companies. The Independent Auditors' Report
on the Annual Report and Financial Statements for 2021 was unqualified, did
not draw attention to any matters by way of emphasis, and did not contain a
statement under Sections 498(2) or 498(3) of the Companies Act 2006.
The Directors have a reasonable expectation, having made the appropriate
enquiries, that the Group has control of the monthly cashflows and that the
Group has sufficient cash resources to cover the fixed cashflows for a period
of at least 12 months from the date of approval of this interim report. For
these reasons, the Directors adopted a going concern basis in the preparation
of the interim report. The Directors have made this assessment after
consideration of the Group's budgeted cash flows and related assumptions
including appropriate stress testing of identified uncertainties, specifically
on the potential shut down of the entire operations if all the plantations are
infected with Coronavirus as well as the impact on the demand for palm oil due
to the Coronavirus pandemic. Stress testing of other identified uncertainties
was undertaken on primarily commodity prices and currency exchange rates.
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.
2. Foreign exchange
2022 2021 2021
6 months 6 months Year
to 30 June to 30 June to 31 December
(unaudited) (unaudited) (audited)
Closing exchange rates
Rp : $ 14,848 14,496 14,269
$ : £ 1.21 1.38 1.35
RM : $ 4.41 4.15 4.17
Average exchange rates
Rp : $ 14,445 14,298 14,312
$ : £ 1.30 1.39 1.38
RM : $ 4.27 4.10 4.15
3. Prior year restatement
With effect from 31 December 2021 and applied retrospectively, the Group have
opted for a change in accounting policy in respect of the treatment of land in
the Group's financial statements which is accounted for in accordance with IAS
16 Property, Plant and Equipment. The Group has historically recognised land
under the revaluation model however, following an analysis of the Group's
peers in the UK, it was apparent that the majority reported their land at
historical cost and therefore the decision was made to change the accounting
policy to make the financial information more comparable and provide a more
relevant result. Land has always been recognised in the local Indonesian
financial statements at historical cost. The Group now recognises land at
cost initially and is not depreciated except for the land in Malaysia as
the possibility to renew the leasehold land in Malaysia is minimal.
The effects of the restatements are summarised as follows:
6 months to 30 June 2021
$000
Impact on consolidated income statement
Profit for the year before restatement 45,869
Effect of change in restatement:
Cost of sales (64)
(64)
Profit for the year after restatement 45,805
The effect of the prior year adjustments had a negative impact on the earnings
per share before BA of 0.08cts and a negative impact on the earnings per share
after BA of 0.09cts for the period to 30 June 2021.
6 months to 30 June 2021
$000
Impact on consolidated statement of comprehensive income
Other comprehensive expenses for the year before restatement (15,893)
Effect of change in restatement:
Unrealised gain on revaluation of leasehold land, net of tax 1,014
Gain on exchange translation of foreign operations 1,769
2,783
Other comprehensive expenses for the year after restatement (13,110)
The following table summarises the impact of this prior year restatement on
the Consolidated Statement of Financial Position:
Balance as reported Restated balance at
30 June 2021 30 June 2021
$000 Effect of restatement $000
$000
Impact on consolidated statement of financial position
Property, plant and equipment 356,170 (80,993) 275,177
Deferred tax assets 9,317 5,413 14,730
Deferred tax liabilities (14,659) 14,034 (625)
Revaluation reserves 48,465 (48,465) -
Exchange reserves (245,502) (2,609) (248,111)
Retained earnings 611,459 149 611,608
Non-controlling interests 104,376 (10,621) 93,755
The restatement of land from fair value to historical cost has decreased the
value of the property, plant and equipment and eliminated the revaluation
reserves. Deferred tax liabilities previously recognised on the revaluation of
land have been reversed resulting in a decrease in deferred tax liabilities,
but also an increase in deferred tax assets where individual entities have
moved from a net deferred tax liability position to a net deferred tax asset
position. Depreciation of the land in Malaysia recognised retrospectively and
the reversal of the deferred tax liabilities previously recognised has
resulted in a small increase in retained earnings. All entities for which
these adjustments relate have non-controlling interests and therefore the
impact on those non-controlling interests has also been recognised.
4. Revenue
Disaggregation of Revenue
The Group has disaggregated revenue into various categories in the following
table which is intended to:
• Depict how the nature, amount and uncertainty of revenue and cash
flows are affected by timing of revenue recognition; and
• Enable users to understand the relationship with revenue segment
information provided in note 6.
There is no right of return and warranty provided to the customers on the sale
of products and services rendered.
CPO, palm kernel and FFB Shell nut Biomass products Biogas products Total
6 months to 30 June 2022 Rubber Others
$000 $000 $000 $000 $000 $000 $000
Contract counterparties
Government - - - - 540 - 540
Non-government
- Wholesalers 245,456 280 2,605 24 - 324 248,689
245,456 280 2,605 24 540 324 249,229
Timing of transfer of goods
Delivery to customer premises
3,569 280 - - - - 3,849
Delivery to port of departure - - - 24 - - 24
Customer collect from our mills / estates
241,887 - 2,605 - - - 244,492
Upon generation / others - - - - 540 324 864
245,456 280 2,605 24 540 324 249,229
CPO, palm kernel and FFB Shell nut Biomass products Biogas products Total
6 months to 30 June 2021 Rubber Others
$000 $000 $000 $000 $000 $000 $000
Contract counterparties
Government - - - - 423 - 423
Non-government
- Wholesalers 194,213 356 2,187 218 - 281 197,255
194,213 356 2,187 218 423 281 197,678
Timing of transfer of goods
Delivery to customer premises 2,304 356 - - - - 2,660
Delivery to port of departure - - - 218 - - 218
Customer collect from our mills / estates
191,909 - 2,187 - - - 194,096
Upon generation / others - - - - 423 281 704
194,213 356 2,187 218 423 281 197,678
CPO, palm kernel and FFB Shell nut Biomass products Biogas products Total
Year to 31 December 2021 Rubber Others
$000 $000 $000 $000 $000 $000 $000
Contract counterparties
Government - - - - 999 - 999
Non-government
- Wholesalers 426,436 695 4,036 336 - 919 432,422
426,436 695 4,036 336 999 919 433,421
Timing of transfer of goods
Delivery to customer premises 4,995 695 - - - - 5,690
Delivery to port of departure - - - 336 - - 336
Customer collect from our mills / estates
421,441 - 4,036 - - - 425,477
Upon generation / others - - - - 999 919 1,918
426,436 695 4,036 336 999 919 433,421
5. Finance income and expense
2022 2021 2021
6 months 6 months Year
to 30 June to 30 June to 31 December
(unaudited) (unaudited) (audited)
$000 $000 $000
Finance income
Interest receivable on:
Credit bank balances and time deposits 1,714 1,331 3,214
Finance expense
Interest payable on:
Interest expense on lease liabilities (8) (12) (24)
(8) (12) (24)
Net finance income recognized in income statement 1,706 1,319 3,190
6. Segment information
North Bengkulu Riau Bangka Kalimantan Total Indonesia Malaysia UK Total South* Sumatera
Sumatera
$000 $000 $000 $000 $000 $000 $000 $000 $000 $000
6 months to 30 June 2022 (unaudited)
Total sales revenue (all external)
- CPO, palm kernel and FFB 82,911 70,778 42,666 1,662 45,875 243,892 1,564 - 245,456 5,290
- Rubber 280 - - - - 280 - - 280 -
- Shell nut 1,017 614 909 - 65 2,605 - - 2,605 -
- Biomass products 24 - - - - 24 - - 24 -
- Biogas products 149 241 - - 150 540 - - 540 -
- Others 110 49 36 20 106 321 3 - 324 63
Total revenue 84,491 71,682 43,611 1,682 46,196 247,662 1,567 - 249,229 5,353
Profit / (loss) before tax 35,009 23,688 14,233 484 22,156 95,570 (87) (635) 94,848 401
BA movement (1,523) (1,176) (872) (114) (1,645) (5,330) 16 - (5,314) (96)
Profit / (loss) for the period before tax per consolidated income 33,486 22,512 13,361 370 20,511 90,240 (71) (635) 89,534 305
statement
Interest income 1,180 429 85 - 17 1,711 3 - 1,714 2
Interest expense (4) - - - - (4) (4) - (8) -
Depreciation (2,669) (1,969) (411) (196) (2,963) (8,208) (162) - (8,370) -
Reversal of impairment - - - - 622 622 - - 622 -
Impairment losses - - - - - - (366) - (366) -
(Provision) / Reversal of expected credit loss (10) (1) - 1 2 (8) - 2 (6) (9)
Inter-segment transactions 2,503 (988) (283) (149) (1,004) 79 299 10 388 (388)
Inter-segmental revenue 25,434 580 - - 5,527 31,541 - - 31,541 4,608
Tax expense (8,617) (4,864) (2,873) (52) (3,998) (20,404) (119) (173) (20,696) 339
Total assets 273,345 135,559 42,725 17,045 151,209 619,883 12,735 6,613 639,231 13,884
Property, plant and equipment 81,387 41,272 8,206 14,938 105,917 251,720 7,825 - 259,545 4,726
Non-current assets - additions 10,146 2,897 201 773 3,707 17,724 39 - 17,763 367
* South Sumatera represents the operations which have been discontinued and
have therefore been separated from the continuing operations.
North Bengkulu Riau Bangka Kalimantan Total Indonesia Malaysia UK Total South* Sumatera
Sumatera
$000 $000 $000 $000 $000 $000 $000 $000 $000 $000
6 months to 30 June 2021 (unaudited)
Total sales revenue (all external)
- CPO, palm kernel and FFB 57,451 66,910 31,239 925 36,442 192,967 1,246 - 194,213 3,339
- Rubber 356 - - - - 356 - - 356 -
- Shell nut 663 648 746 - 130 2,187 - - 2,187 -
- Biomass products 218 - - - - 218 - - 218 -
- Biogas products - 220 - - 203 423 - - 423 -
- Others 45 48 21 11 143 268 13 - 281 88
Total revenue 58,733 67,826 32,006 936 36,918 196,419 1,259 - 197,678 3,427
Profit / (loss) before tax 16,480 16,640 8,441 131 15,503 57,195 (232) (596) 56,367 (2,198)
BA movement 1,550 770 206 54 1,132 3,712 153 - 3,865 86
Profit / (loss) for the period before tax per consolidated income 18,030 17,410 8,647 185 16,635 60,907 (79) (596) 60,232 (2,112)
statement
Interest income 969 297 52 - 10 1,328 3 - 1,331 2
Interest expense (9) - - - - (9) (3) - (12) -
Depreciation (2,601) (2,075) (452) (172) (2,829) (8,129) (331) - (8,460) (982)
Reversal of impairment - - - - 133 133 - - 133 -
Impairment losses - - - - - - - - - (79)
(Provision) / Reversal of expected credit loss - (1) - - (1) (2) - 1 (1) 1
Inter-segment transactions 2,549 (1,002) (288) (141) (968) 150 218 10 378 (378)
Inter-segmental revenue 18,561 637 - - 4,075 23,273 - - 23,273 3,140
Tax expense (4,484) (3,402) (1,800) (17) (3,153) (12,856) (127) (1) (12,984) 670
Total assets 213,172 97,145 28,481 16,227 138,868 493,893 13,746 6,846 514,485 37,978
Property, plant and equipment 73,013 41,130 8,875 14,245 102,175 239,438 9,137 - 248,575 26,602
Non-current assets - additions 2,683 2,285 391 930 3,949 10,238 370 - 10,608 1,308
* South Sumatera represents the operations which have been discontinued and
have therefore been separated from the continuing operations.
North Bengkulu Riau Bangka Kalimantan Total Indonesia Malaysia UK Total South* Sumatera
Sumatera
$000 $000 $000 $000 $000 $000 $000 $000 $000 $000
Year to 31 December 2021 (audited)
Total sales revenue (all external)
- CPO, palm kernel and FFB 127,216 141,070 73,827 2,178 79,470 423,761 2,675 - 426,436 7,999
- Rubber 695 - - - - 695 - - 695 -
- Shell nut 1,173 1,191 1,440 - 232 4,036 - - 4,036 -
- Biomass products 336 - - - - 336 - - 336 -
- Biogas products 114 485 - - 400 999 - - 999 -
- Others 93 20 89 16 583 801 27 91 919 270
Total revenue 129,627 142,766 75,356 2,194 80,685 430,628 2,702 91 433,421 8,269
Profit / (loss) before tax 40,160 35,769 20,555 553 37,539 134,576 (517) (1,325) 132,734 (4,786)
BA movement 1,660 700 574 111 1,273 4,318 31 - 4,349 64
Profit / (loss) for the year before tax per consolidated income 137,083
statement
41,820 36,469 21,129 664 38,812 138,894 (486) (1,325) (4,722)
Interest income 2,323 720 133 1 22 3,199 15 - 3,214 5
Interest expense (15) - - - - (15) (9) - (24) -
Depreciation (5,270) (4,132) (905) (356) (5,660) (16,323) (671) - (16,994) (1,978)
Reversal of impairment - - - - 5,437 5,437 - - 5,437 -
Impairment losses - - - - (452) (452) (133) - (585) (716)
(Provision) / Reversal for expected credit loss 177
(4) - - - 180 176 - 1 (1,231)
Inter-segment transactions 902 (2,001) (11,754) (282) (1,934) (15,069) 476 74 (14,519) 14,519
Inter-segmental revenue 42,566 2,641 - - 9,431 54,638 - - 54,638 7,438
Tax expense (8,939) (7,831) (2,153) (109) (6,379) (25,411) (112) (219) (25,742) (1,927)
Total assets 252,633 117,748 34,580 17,095 145,578 567,634 13,758 7,152 588,544 14,055
Property, plant and equipment 77,170 42,027 8,751 14,960 108,844 251,752 8,780 - 260,532 5,653
Non-current assets - additions 8,490 4,727 608 1,600 7,072 22,497 517 - 23,014 3,424
* South Sumatera represents the operations which have been discontinued and
have therefore been separated from the continuing operations.
In the 6 months to 30 June 2022, revenue from 4 customers of the Indonesian
segment represent approximately $156.8m (H1 2021: $112.6m) of the Group's
total revenue. In the year 2021, revenue from 4 customers of the Indonesian
segment represent approximately $266.3m of the Group's total revenue. An
analysis of this revenue is provided below. Although Customers 1 to 2 each
contribute over 10% of the Group's total revenue, there was no over reliance
on these Customers as tenders were performed on a weekly basis. Three of the
top four customers were the same as in the year to 31 December 2021.
2022 2021 2021
6 months 6 months Year
to 30 June to 30 June to 31 December
(unaudited) (unaudited) (audited)
$m % $m % $m %
Major Customers
Customer 1 89.7 36.0 53.7 27.2 120.9 27.8
Customer 2 31.0 12.4 23.5 11.9 50.8 11.8
Customer 3 18.5 7.4 18.4 9.3 48.3 11.2
Customer 4 17.6 7.0 17.0 8.6 46.3 10.7
Total 156.8 62.8 112.6 57.0 266.3 61.5
7. Tax expense
2022 2021 2021
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 18,224 13,194 20,404
Foreign corporation tax - prior year (57) - 258
Deferred tax adjustment - origination and reversal of temporary differences 2,529 (212)
5,080
Recognition of previously unrecognised deferred tax assets - -
-
20,696 12,982 25,742
Corporation tax rate in Indonesia is at 22% (H1 2021: 22%, 2021: 22%) whereas
Malaysia is at 24% (H1 2021: 24%, 2021: 24%). The standard rate of corporation
tax in the UK for the current year is 19% (H1 2021: 19%, 2021: 19%).
8. Dividend
The final and only dividend in respect of 2021, amounting to 5.0 cents per
share, or $1,981,819 was paid on 15 July 2022 (2020: 1.0 cents per share, or
$396,364, paid on 16 July 2021). As in previous years, no interim dividend has
been declared.
9. Earnings per ordinary share ("EPS")
2022 2021 2021
6 months 6 months Year
to 30 June to 30 June to 31 December
(unaudited) (unaudited) (audited)
$000 $000 $000
Total operations
Profit for the period attributable to owners of the Company before BA movement 60,582 35,746 65,485
BA movement (3,551) 2,581 2,856
Earnings used in basic and diluted EPS 57,031 38,327 68,341
Continuing operations
Profit for the period attributable to owners of the Company before BA movement 60,845 37,163 93,245
BA movement (3,480) 2,517 2,809
Earnings used in basic and diluted EPS 57,365 39,680 96,054
Discontinued operations
Profit for the period attributable to owners of the Company before BA movement (263) (1,417) (27,760)
BA movement (71) 64 47
Earnings used in basic and diluted EPS (334) (1,353) (27,713)
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 - -
-
- used in diluted EPS 39,636 39,636 39,636
Total operations
- Basic and diluted EPS before BA movement 152.85cts 90.19cts 165.22cts
- Basic and diluted EPS after BA movement 143.89cts 96.70cts 172.42cts
Continuing operations
- Basic and diluted EPS before BA movement 153.51cts 93.76cts 235.25cts
- Basic and diluted EPS after BA movement 144.73cts 100.11cts 242.34cts
Discontinued operations
- Basic and diluted EPS before BA movement (0.66)cts (3.58)cts (70.04)cts
- Basic and diluted EPS after BA movement (0.84)cts (3.41)cts (69.92)cts
10. 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:
2022 2021 2021
6 months 6 months Year
to 30 June to 30 June to 31 December
(unaudited) (unaudited) (audited)
Carrying amount Fair value Carrying amount Fair value Carrying amount Fair value
$000 $000 $000 $000 $000 $000
Non-current receivables
Due from non-controlling interests 5,345 3,016 5,413 3,032 5,459 3,042
Due from cooperatives under Plasma scheme 17,246 12,373 18,740 17,061 19,879 13,122
22,591 15,389 24,153 20,093 25,338 16,164
Transfer to assets held for sale
- - - - (3,338) (2,079)
22,591 15,389 24,153 20,093 22,000 14,085
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 assets, non-current receivables and long-term loan are
classified as Level 3 in the fair value hierarchy.
The valuation techniques and significant unobservable inputs used in
determining the fair value measurement of non-current receivables and
borrowings due after one year, as well as the inter-relationship between key
unobservable inputs and fair value, are set out in the table below:
Item Valuation approach Inputs used Inter-relationship between key unobservable inputs and fair value
Non-current receivables
Due from non-controlling interests Based on cash flows discounted using current lending rate of 6% (H1 2021 and Discount rate The higher the discount rate, the lower the fair value.
2021: 6%).
Due from cooperatives under Plasma scheme Based on cash flows discounted using an estimated current lending rate of Discount rate The higher the discount rate, the lower the fair value.
7.00% (H1 2021: 6.75%, 2021: 7.00%).
11. Report and financial information
Copies of the interim report for the Group for the period ended 30 June 2022
are available on the AEP website at https://www.angloeastern.co.uk/.
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