Anglo-Eastern Plant - Interim Results for six months ended 30 June 2023
24/08/2023 11:15
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RNS Number : 3651K Anglo-Eastern Plantations PLC 24 August 2023
Anglo-Eastern Plantations Plc
("AEP", "Group" or "Company")
Announcement of interim results for the six months ended 30 June 2023
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 2023.
Financial Highlights
Continuing operations 2023 2022 2022
6 months
6 months
12 months
to 30 June
to 30 June
to 31 December
$m
$m
$m
(unaudited) (unaudited) (audited)
Revenue 173.4 249.2 447.6
Profit before tax
- before biological assets ("BA") movement 32.2 94.8 138.7
- after BA movement 32.5 89.5 132.9
Basic Earnings per ordinary share ("EPS")
- before BA movement 50.27cts 153.51cts 221.86cts
- after BA movement 50.73cts 144.73cts 212.34cts
Enquiries:
Anglo-Eastern Plantations Plc
Dato' John Lim Ewe Chuan +44 (0)20 7216 4621
Panmure Gordon (UK) Limited
Dominic Morley / Amrit Mahbubani +44 (0)20 7886 2500
Chairman's Interim Statement
The interim results for the Group for the six months to 30 June 2023 are as
follows:
Revenue from continuing operations for the six months to 30 June 2023 was
$173.4 million, 30% lower than $249.2 million reported for the same period of
2022. The Group's gross profit from continuing operations was $33.2
million compared to $90.3 million for the first six months of 2022. Overall
profit before tax, after biological assets ("BA") movement, from continuing
operations for the first half of 2023 was 64% lower at $32.5 million against
$89.5 million for the corresponding period in 2022. There was no reversal of
impairment losses for the first half of 2023 compared to a net reversal of
impairment losses of $0.2 million for the first half of 2022. The BA movement
adjustment from continuing operations for the first half of 2023 was a credit
of $0.3 million as compared to a debit of $5.3 million for the same period
last year. The lower profit was mainly attributed to lower Crude Palm Oil
("CPO") prices, as well as lower crop productions in Bengkulu and North
Sumatra and lower third party crops.
Fresh Fruit Bunches ("FFB") production from continuing operations for the
first half of 2023 was 5% lower at 522,700mt compared to 550,800mt for the
same period in the previous year due to lower production in Bengkulu and North
Sumatera regions. The harvest in Bengkulu was lower by 16% due primarily to
the reduction of almost 1,300ha of matured area of which 985ha was replanted
in 2022 while another 682ha was cleared for replanting in the first half of
2023. Production in Kalimantan continued to recover by registering a 10%
increase in harvest with 500ha coming to maturity in the first half of 2023.
Bought-in crops for the first half of 2023 decreased by 10% to 501,400mt from
557,600mt for the same period last year. The 20% increase in third party crops
in Kalimantan could not off-set a 14% decrease in bought in crops in Bengkulu
and North Sumatera. Lower crop trend faced by our estates in North Sumatera
and Bengkulu was also experienced by local smallholders and farmers.
Operational and financial performance
For the six months ended 30 June 2023, gross profit margin from continuing
operations decreased to 19.2% from 36.2% as the Group experienced lower CPO
and palm kernel prices.
CPO price ex-Rotterdam averaged $991/mt for the first six months to 30 June
2023, 40% lower than $1,640/mt over the same period in 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. As a result,
the Group's average ex-mill price was lower by 27% at $751/mt for the same
period (H2 2022: $1,035/mt). The ex-mill prices are normally at a discount to
ex-Rotterdam prices as buyers factor in logistic charges and Indonesian CPO
tax and levy, which they have to bear. Palm kernel prices were also lower by
55% at the average price of $361/mt against $808/mt in the same period last
year.
Profit after tax from continuing operations for the six months ended 30 June
2023 was 65% lower at $24.1 million, compared to a profit after tax from
continuing operations of $68.8 million for the first six months of 2022.
The resulting basic earnings per share from continuing operations for the
period was 50.73cts (H1 2022: 144.73cts).
The Group's balance sheet remains strong with no outstanding bank loans. Net
assets as at 30 June 2023 were $605.5 million compared to $585.3 million as
at 30 June 2022 and $573.0 million as at 31 December 2022. The increase in
net assets from the last interim report was attributed to profit during the
period. The Indonesian Rupiah has appreciated by 4% against the US dollar
in the first half of 2023.
As at 30 June 2023, the Group had cash and cash equivalents including
short-term investments known as fixed deposits with banks of $261.3 million
(H1 2022: $246.8 million, 31 December 2022: $277.0 million). The Group
remitted in advance about $10 million to the Company's Registrar for payment
of a dividend resulting in lower cash position at 30 June 2023 compared to 31
December 2022.
Operating costs
Operating costs for the Indonesian operations were lower in the first half of
2023 compared to the same period in 2022 mainly due to lower volume and prices
paid for third party crops. This helped to offset higher maintenance costs in
plantations and mills and also higher harvesting costs arising from the
increase in newly matured area. Fertiliser costs rose sharply by 7.5% in the
first half of 2023 to $17.0 million from $15.8 million for the corresponding
period in 2022. We have recently concluded a tender to purchase fertilisers
for the second half of 2023 and we are pleased to report that prices of
fertiliser have corrected sharply by as much as 40% since peaking in the first
half of 2023. Transport costs have also increased significantly by 54% to $4.3
million from $2.8 million for the corresponding period in 2022 due to
increases in diesel prices.
Production and Sales
2023 2022 2022
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 522,700 550,800 1,124,400
- estates from discontinued operations 15,700 21,500 46,300
- bought-in from third parties 501,400 557,600 1,080,300
Saleable CPO 210,900 227,800 455,600
Saleable palm kernels 48,600 54,400 106,200
Oil palm sales
CPO 201,800 200,000 449,800
Palm kernels 47,400 48,900 105,700
FFB sold outside 24,200 17,800 42,800
Rubber production 250 168 440
The Group's six mills processed a total of 1,015,600mt in FFB for the first
half of 2023, a 9% decrease compared to 1,112,100mt for the same period last
year.
Overall CPO produced for the first half of 2023 was 7% lower at 210,900mt from
227,800mt for the corresponding period in 2022. The oil extraction rate for
the first half of 2023 was 20.8%, slight improvement compared to 20.5% for the
same period last year.
Commodity prices
The CPO price ex-Rotterdam for the first half of 2023 averaged $991/mt, 40%
lower than last year (H1 2022: $1,640/mt). CPO price started the year at
$1,060/mt and generally traded within a 12% range peaking at $1,100/mt in
early January and March 2023 before dropping to a low of $860/mt in late May
2023. CPO price recovered slightly to close at $955/mt at 30 June 2023. The
trend of CPO price in the first half of 2023 reflected the increase in
inventory of soft oils amidst reports of a slowdown in global demand.
Rubber price averaged $1,307/mt, 22% lower than H1 2022 at $1,670/mt.
Development
The Group's planted areas at 30 June 2023 comprised:
Total Mature Immature
Continuing operations Ha ha Ha
North Sumatera 19,093 18,699 394
Bengkulu 16,742 13,568 3,174
Riau 4,816 4,816 -
Kalimantan 18,068 15,389 2,679
Bangka 2,647 1,716 931
Plasma 3,761 2,629 1,132
Indonesia 65,127 56,817 8,310
Malaysia 3,453 3,453 -
68,580 60,270 8,310
Discontinued operations
South Sumatera 6,681 6,288 393
Plasma 1,068 1,043 25
7,749 7,331 418
Total: 30 June 2023 76,329 67,601 8,728
Total: 31 December 2022 76,095 66,694 9,401
Total: 30 June 2022 75,239 67,358 7,881
The Group's new planting and replanting for the first six months of 2023
totalled 987ha compared to 439ha for the same period last year. In addition,
Plasma planting for the period was 89ha (H1 2022: 152ha).
The Group remains optimistic that it will meet substantially its planting
target of 2,500ha (including replanting) in 2023. The Group's total
landholding from its continuing operations comprises some 90,670ha, of which
the planted area stands at around 68,580ha (H1 2022: 67,512ha) with a balance
of estimated plantable land at 9,500ha (H1 2022: 10,850ha).
The seventh mill in North Sumatera which was earmarked for completion in the
first half of 2023 has been delayed because of the tragic explosion, as
previously announced on 9 May 2023, resulting in a loss of lives of 4
employees of the contractor whilst conducting final trials and tests before
handing over. The police recently completed their investigation and the
contractor is now allowed access to the area to assess the damages and to
determine the extent of repairs required. We do not expect the mill be in
commercial operation until early next year.
The environment impact assessment study ("EIA") for the eighth mill in
Kalimantan has been completed. The earthworks however cannot commence until
the relevant government ministry has approved the EIA report. The backlog of
companies seeking approval of their EIA reports is expected to set back the
commencement of earthworks by a few months.
Dividend
The final dividend of 25.0 cents per share in respect of the year ended 31
December 2022 was paid on 7 July 2023.
As you are aware AEP has not been paying Interim dividend for a number years,
however, the Board is pleased to declare an interim dividend of 15.0 cents per
share in respect of the year ending 31 December 2023. The interim dividend
will be paid on 6 October 2023 to those shareholders on the register on 8
September 2023.
Outlook
Despite a traditionally more robust FFB production in the second half of the
year, which would increase supply, CPO price is expected to perform better due
to a projected drop in soybean production in the United States as farmers
planted more corns at the expense of soybeans. The Indonesian government
strong commitment for the B35 biodiesel mandate is expected to strengthen
local demand and should augur well for the CPO price. Russia's recent pull out
from the Black Sea Grain deal which allowed for the secure passage of
agricultural products from Ukraine's ports in the Black Sea would also have
some impact on sunflower oil and CPO prices. We do not expect the drought
induced by El Nino weather phenomenon to have a significant effect on yield
for the second half of 2023. The effect, if any would be more prominent in
2024.
Principal risks and uncertainties
The principal risks and uncertainties, including the risks due to the Covid-19
and other contagious diseases, have broadly remained the same since the
publication of the annual report for the year ended 31 December 2022.
A more detailed explanation of the risks relevant to the Group is on pages 31
to 36 and from pages 139 to 144 of the 2022 annual report which is available
at https://www.angloeastern.co.uk (http://www.angloeastern.co.uk) /.
Subsequent events
The disposal of the three non-performing plantations in South Sumatera, namely
PT Riau Agrindo Agung, PT Karya Kencana Sentosa Tiga and PT Empat Lawang Agro
Perkasa, to Mrs Lina (also known as Liena Efendy) and Miss Lenny Nurimba on 5
July 2023 for a total cash consideration of $8.5 million had been completed.
Since the Group is no longer in control of the subsidiaries, all the assets
and liabilities of the subsidiaries will be derecognised from July 2023
onwards.
In July 2023, the Group also completed the acquisition of 25% of the issued
share capital of PT United Kingdom Indonesia Plantations and the 10% of the
issued share capital of PT Mitra Puding Mas, from PT. Canadianty Corporindo,
the minority shareholder in Indonesia, for a total cash consideration of
$25.2million, increasing the Group ownership interest to 100%.
Mr Jonathan Law Ngee Song
Chairman
24 August 2023
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 2023 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
24 August 2023
Condensed Consolidated Income Statement
2023
6 months to 30 June 2022 2022
(unaudited) 6 months to 30 June 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 3 173,449 - 173,449 249,229 - 249,229 447,619 - 447,619
Cost of sales (140,496) 291 (140,205) (153,633) (5,314) (158,947) (304,424) (5,792) (310,216)
Gross profit 32,953 291 33,244 95,596 (5,314) 90,282 143,195 (5,792) 137,403
Administration expenses (4,224) - (4,224) (3,021) - (3,021) (9,683) - (9,683)
Reversal of impairment - - - 622 - 622 - - -
Impairment losses - - - (366) - (366) (617) - (617)
Operating profit 28,729 291 29,020 92,831 (5,314) 87,517 132,895 (5,792) 127,103
Exchange (losses) / gains (493) - (493) 311 - 311 991 - 991
Finance income 4 3,990 - 3,990 1,714 - 1,714 4,859 - 4,859
Finance expense 4 (15) - (15) (8) - (8) (12) - (12)
Profit before tax 5 32,211 291 32,502 94,848 (5,314) 89,534 138,733 (5,792) 132,941
Tax expense 6 (8,349) (65) (8,414) (21,865) 1,169 (20,696) (32,737) 1,276 (31,461)
Profit for the period from continuing operations 23,862 226 24,088 72,983 (4,145) 68,838 105,996 (4,516) 101,480
(Loss) / Gain on discontinued operations, net of tax (297) (75) (372)
(2,542) 67 (2,475) (5,684) (139) (5,823)
21,320 293 21,613 72,686 (4,220) 68,466 100,312 (4,655) 95,657
Profit for the period attributable to:
- Owners of the parent 17,795 248 18,043 60,582 (3,551) 57,031 83,548 (3,904) 79,644
- Non-controlling interests 3,525 45 3,570 12,104 (669) 11,435 16,764 (751) 16,013
21,320 293 21,613 72,686 (4,220) 68,466 100,312 (4,655) 95,657
Profit for the period from continuing operations attributable to:
- Owners of the parent 19,924 184 20,108 60,845 (3,480) 57,365 87,937 (3,772) 84,165
- Non-controlling interests 3,938 42 3,980 12,138 (665) 11,473 18,059 (744) 17,315
23,862 226 24,088 72,983 (4,145) 68,838 105,996 (4,516) 101,480
Earnings per share attributable to the owners of the parent during the period
Profit
- basic and diluted 8 45.52cts 143.89cts 200.94cts
Profit from continuing operations
- basic and diluted 8 50.73cts 144.73cts 212.34cts
* 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
management do not use the fair value of BA movement in assessing business
performance.
Condensed Consolidated Statement of Comprehensive Income
2023 2022 2022
6 months 6 months Year
to 30 June to 30 June to 31 December
(unaudited) (unaudited) (audited)
$000 $000 $000
Profit for the period 21,613 68,466 95,657
Other comprehensive income / (expenses):
Items may be reclassified to profit or loss:
Profit / (Loss) on exchange translation of foreign operations 25,971 (22,933) (54,975)
Net other comprehensive income / (expenses) may be reclassified to profit or 25,971 (22,933) (54,975)
loss
Items not to be reclassified to profit or loss:
Remeasurement of retirement benefits plan, net of tax - - 177
Net other comprehensive income not being reclassified to profit or loss - - 177
Total other comprehensive income / (expenses) for the period, net of tax 25,971 (22,933) (54,798)
Total comprehensive income for the period 47,584 45,533 40,859
Attributable to:
- Owners of the parent 39,100 38,570 34,343
- Non-controlling interests 8,484 6,963 6,516
47,584 45,533 40,859
Condensed Consolidated Statement of Financial Position
2023 2022 2022
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 273,024 259,545 252,414
Investment 27 49 42
Receivables 20,142 22,591 18,963
Deferred tax assets 2,310 1,674 1,832
295,503 283,859 273,251
Current assets
Inventories 23,468 41,012 19,590
Income tax receivables 8,198 4,766 4,122
Other tax receivables 40,327 52,054 37,576
Biological assets 6,735 7,133 6,161
Trade and other receivables 17,591 4,457 3,468
Short-term investments 39,040 59,495 55,566
Cash and cash equivalents 222,286 187,339 221,476
357,645 356,256 347,959
Assets in disposal groups classified as held for sale 8,500 13,000 9,000
366,145 369,256 356,959
Current liabilities
Trade and other payables (29,909) (40,175) (33,966)
Income tax liabilities (1,501) (11,474) (10,230)
Other tax liabilities (1,976) (566) (1,221)
Dividend payables (9,941) (2,007) (32)
Lease liabilities (124) (152) (73)
(43,451) (54,374) (45,522)
Net current assets 322,694 314,882 311,437
Non-current liabilities
Deferred tax liabilities (783) (1,259) (805)
Retirement benefits - net liabilities (11,563) (12,089) (10,874)
Lease liabilities (311) (68) (31)
(12,657) (13,416) (11,710)
Net assets 605,540 585,325 572,978
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 (267,990) (260,368) (288,891)
Retained earnings 718,721 697,631 712,919
490,086 476,618 463,383
Non-controlling interests 115,454 108,707 109,595
Total equity 605,540 585,325 572,978
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
Note $000 $000 $000 $000 $000 $000 $000 $000 $000
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 - - - - - 144 144 33 177
-Loss on exchange translation of foreign operations - - - - (45,445) - (45,445) (9,530) (54,975)
Total other comprehensive (expenses) / income - - - - (45,445) 144 (45,301) (9,497) (54,798)
Profit for the year - - - - - 79,644 79,644 16,013 95,657
Total comprehensive (expenses) / income for the year - - - - (45,445) 79,788 34,343 6,516 40,859
Acquisition of non-controlling interests - - - - (1,539) (7,469) (9,008) 3,175 (5,833)
Dividends paid - - - - - (1,982) (1,982) (2,174) (4,156)
Balance at 31 December 2022 15,504 (1,171) 23,935 1,087 (288,891) 712,919 463,383 109,595 572,978
Items of other comprehensive income:
-Remeasurement of retirement benefits plan, net of tax - - - - - - - - -
-Profit on exchange translation of foreign operations - - - - 21,057 - 21,057 4,914 25,971
Total other comprehensive income - - - - 21,057 - 21,057 4,914 25,971
Profit for the period - - - - - 18,043 18,043 3,570 21,613
Total comprehensive income for the period - - - 21,057 18,043 39,100 8,484 47,584
Acquisition of non-controlling interests 10 - - - - (156) (2,332) (2,488) (120) (2,608)
Dividends payable - - - - - (9,909) (9,909) (2,505) (12,414)
Balance at 30 June 2023 15,504 (1,171) 23,935 1,087 (267,990) 718,721 490,086 115,454 605,540
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 2021 15,504 (1,171) 23,935 1,087 (241,907) 642,582 440,030 102,078 542,108
Items of other comprehensive income:
-Loss on exchange translation of foreign operations - - - - (18,461) - (18,461) (4,472) (22,933)
Total other comprehensive expenses - - - - (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
Condensed Consolidated Statement of Cash Flows
2023 2022
2022
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 from continuing operations 32,502 89,534 132,941
Adjustments for:
Biological assets movement (291) 5,314 5,792
Gain on disposal of property, plant and equipment (26) (49) (91)
Depreciation 8,116 8,370 16,724
Retirement benefit provisions 386 1,100 1,157
Net finance income (3,975) (1,706) (4,847)
Unrealised loss / (gain) in foreign exchange 493 (311) (991)
Property, plant and equipment written off 28 80 134
(Reversal of impairment) / impairment of losses - (256) 617
Provision for expected credit loss 20 6 1,665
Operating cash flows before changes in working capital 37,253 102,082 153,101
Increase in inventories (2,871) (27,157) (6,291)
(Increase) / Decrease in non-current, trade and other receivables (15,582) 584 (896)
(Decrease) / Increase in trade and other payables (5,804) 8,849 4,035
Cash inflows from operations 12,996 84,358 149,949
Retirement benefits paid (301) (137) (612)
Overseas tax paid (22,172) (28,935) (27,495)
Operating cash flows (used in) / from continuing operations (9,477) 55,286 121,842
Operating cash flows used in discontinued operations (850) (850) (1,331)
Net cash flows (used in) / from operating activities (10,327) 54,436 120,511
Investing activities
Property, plant and equipment
- purchases (17,110) (17,763) (34,026)
- sales 155 51 111
Interest received 3,990 1,714 4,859
Increase in receivables from cooperatives under plasma scheme (1,473) (1,395) (2,570)
Placement of fixed deposits with original maturity of more than three (39,040) (59,495) (55,566)
months
Withdrawal of fixed deposits with original maturity of more than three months 55,566 1,439 1,439
Cash from / (used in) investing activities from continuing operations 2,088 (75,449) (85,753)
Cash used in investing activities from discontinued operations (935) (887) (1,865)
Net cash from / (used in) investing activities 1,153 (76,336) (87,618)
Financing activities
Dividends paid to the holders of the parent - - (1,975)
Dividends paid to non-controlling interests (2,505) (334) (2,174)
Repayment of lease liabilities - principal (102) (112) (220)
Repayment of lease liabilities - interest (15) (8) (12)
Acquisition of non-controlling interests - - (5,142)
Cash used in financing activities from continuing operations (2,622) (454) (9,523)
Cash used in financing activities from discontinued operations - - -
Net cash used in financing activities (2,622) (454) (9,523)
Net (decrease) / increase in cash and cash equivalents (11,796) (22,354) 23,370
Cash and cash equivalents
At beginning of period 221,476 218,249 218,249
Exchange gain / (loss) 12,606 (8,556) (20,143)
At end of period 222,286 187,339 221,476
Comprising:
Cash at end of period 222,286 187,339 221,476
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 2022 Annual Report. The
financial information for the half years ended 30 June 2023 and 30 June 2022
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 2022 included
within this report does not constitute the full statutory accounts for that
period. The statutory Annual Report and Financial Statements for 2022 have
been filed with the Registrar of Companies. The Independent Auditors' Report
on the Annual Report and Financial Statements for 2022 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
2023 2022 2022
6 months 6 months Year
to 30 June to 30 June to 31 December
(unaudited) (unaudited) (audited)
Closing exchange rates
Rp : $ 15,026 14,848 15,731
$ : £ 1.27 1.21 1.20
RM : $ 4.67 4.41 4.41
Average exchange rates
Rp : $ 15,071 14,445 14,810
$ : £ 1.23 1.30 1.24
RM : $ 4.46 4.27 4.40
3. 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 5.
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 2023 Rubber Others
$000 $000 $000 $000 $000 $000 $000
Contract counterparties
Government - - - - 550 - 550
Non-government
- Wholesalers 169,920 327 2,337 - - 315 172,899
169,920 327 2,337 - 550 315 173,449
Timing of transfer of goods
Delivery to customer premises
3,339 327 - - - - 3,666
Delivery to port of departure
- - - - - - -
Customer collect from our mills / estates
166,581 - 2,337 - - - 168,918
Upon generation / others - - - - 550 315 865
169,920 327 2,337 - 550 315 173,449
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
Year to 31 December 2022 Rubber Others
$000 $000 $000 $000 $000 $000 $000
Contract counterparties
Government - - - - 1,160 - 1,160
Non-government
- Wholesalers 437,247 630 5,438 24 - 3,120 446,459
437,247 630 5,438 24 1,160 3,120 447,619
Timing of transfer of goods
Delivery to customer premises
5,359 630 - - - - 5,989
Delivery to port of departure - - - 24 - - 24
Customer collect from our mills / estates
431,888 - 5,438 - - - 437,326
Upon generation / others - - - - 1,160 3,120 4,280
437,247 630 5,438 24 1,160 3,120 447,619
4. Finance income and expense
2023 2022 2022
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 3,990 1,714 4,859
Finance expense
Interest payable on:
Interest expense on lease liabilities (15) (8) (12)
(15) (8) (12)
Net finance income recognised in income statement 3,975 1,706 4,847
5. 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 2023 (unaudited)
Total sales revenue (all external)
- CPO, palm kernel and FFB 57,802 46,763 22,485 1,679 40,169 168,898 1,022 - 169,920 2,789
- Rubber 327 - - - - 327 - - 327 -
- Shell nut 1,171 337 785 - 44 2,337 - - 2,337 -
- Biomass products - - - - - - - - - -
- Biogas products 168 187 - - 195 550 - - 550 -
- Others 213 58 - 20 14 305 8 2 315 69
Total revenue 59,681 47,345 23,270 1,699 40,422 172,417 1,030 2 173,449 2,858
Profit / (loss) before tax 11,795 6,734 5,747 (67) 8,973 33,182 (513) (458) 32,211 (696)
BA movement 366 (1) (77) 30 (76) 242 49 - 291 86
Profit / (loss) for the period before tax per consolidated income 12,161 6,733 5,670 (37) 8,897 33,424 (464) (458) 32,502 (610)
statement
Interest income 2,164 1,267 501 - 21 3,953 36 1 3,990 2
Interest expense (13) - - - - (13) (2) - (15) -
Depreciation (2,571) (1,749) (419) (239) (3,054) (8,032) (84) - (8,116) -
Provision of expected credit loss (4) (8) - - (7) (19) - (1) (20) (9)
Inter-segment transactions 2,046 (945) (270) (146) (996) (311) 301 10 - -
Inter-segmental revenue 16,269 3,540 - - 5,230 25,039 - - 25,039 2,023
Tax expense (3,093) (1,299) (1,200) 44 (1,554) (7,102) (96) (1,216) (8,414) 471
Total assets 261,948 141,814 51,847 19,054 155,488 630,151 10,342 11,677 652,170 9,478
Non-current assets 86,369 46,374 8,145 16,399 108,633 265,920 7,104 - 273,024 -
Non-current assets - additions 6,104 5,102 377 1,036 5,162 17,781 12 - 17,793 137
* 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 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
Non-current assets 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
Year to 31 December 2022 (audited)
Total sales revenue (all external)
- CPO, palm kernel and FFB 146,044 124,480 77,688 2,554 84,198 434,964 2,283 - 437,247 9,192
- Rubber 630 - - - - 630 - - 630 -
- Shell nut 2,056 1,197 2,067 - 118 5,438 - - 5,438 -
- Biomass products 24 - - - - 24 - - 24 -
- Biogas products 354 475 - - 331 1,160 - - 1,160 -
- Others 141 - 2,662 33 264 3,100 20 - 3,120 114
Total revenue 149,249 126,152 82,417 2,587 84,911 445,316 2,303 - 447,619 9,306
Profit / (loss) before tax 51,210 35,809 26,166 433 29,079 142,697 (721) (3,243) 138,733 (1,105)
BA movement (1,845) (1,571) (846) (106) (1,354) (5,722) (70) - (5,792) (178)
Profit / (loss) for the year before tax per consolidated income 132,941
statement
49,365 34,238 25,320 327 27,725 136,975 (791) (3,243) (1,283)
Interest income 3,149 1,321 320 - 31 4,821 38 - 4,859 4
Interest expense (5) - - - - (5) (7) - (12) -
Depreciation (5,295) (3,942) (813) (374) (5,922) (16,346) (378) - (16,724) -
Impairment losses - - - - (185) (185) (432) - (617) -
(Provision) / Reversal for expected credit loss (1,665)
(169) (57) - - 12 (214) - (1,451) 91
Inter-segment transactions 4,654 (1,927) (551) (291) (1,960) (75) 589 53 567 (567)
Inter-segmental revenue 44,080 2,711 - - 9,628 56,419 - - 56,419 7,305
Tax expense (12,022) (7,262) (5,499) (26) (5,414) (30,223) (98) (1,140) (31,461) 494
Total assets 258,237 138,272 52,321 17,469 139,914 606,213 11,540 2,602 620,355 9,855
Non-current assets 79,119 41,193 7,820 14,901 101,780 244,813 7,601 - 252,414 5,704
Non-current assets - additions 15,007 7,283 709 1,788 9,376 34,163 107 - 34,270 793
* 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 2023, revenue from 4 customers of the Indonesian
segment represent approximately $85.8m (H1 2022: $156.8m) of the Group's total
revenue. In the year 2022, revenue from 4 customers of the Indonesian segment
represent approximately $263.0m of the Group's total revenue for continuing
operations. An analysis of this revenue is provided below. Although Customers
1 to 3 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
2022.
2023 2022 2022
6 months 6 months Year
to 30 June to 30 June to 31 December
(unaudited) (unaudited) (audited)
$m % $m % $m %
Major Customers
Customer 1 27.9 16.1 89.7 36.0 146.4 32.6
Customer 2 23.1 13.3 31.0 12.4 55.9 12.5
Customer 3 17.7 10.2 18.5 7.4 33.1 7.4
Customer 4 17.1 9.9 17.6 7.0 27.6 6.2
Total 85.8 49.5 156.8 62.8 263.0 58.7
6. Tax expense
2023 2022 2022
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 8,843 18,224 29,727
Foreign corporation tax - prior year - (57) 7
Deferred tax adjustment - origination and reversal of temporary differences (429) 2,529
832
Deferred tax - prior year - - 895
8,414 20,696 31,461
Corporation tax rate in Indonesia is at 22% (H1 2022: 22%, 2022: 22%) whereas
Malaysia is at 24% (H1 2022: 24%, 2022: 24%). The standard rate of corporation
tax in the UK for the current year is 19% (H1 2022: 19%, 2022: 19%).
7. Dividend
The final and only dividend in respect of 2022, amounting to 25.0 cents per
share, or $9,909,093 was paid on 7 July 2023 (2021: 5.0 cents per share, or
$1,981,819 paid on 15 July 2022).
The interim dividend of 15.0 cents per share, or $5,945,456 in respect of the
year ending 31 December 2023 will be paid on 6 October 2023 to those
shareholders on the register on 8 September 2023.
8. Earnings per ordinary share ("EPS")
2023 2022 2022
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 17,795 60,582 83,548
BA movement 248 (3,551) (3,904)
Earnings used in basic and diluted EPS 18,043 57,031 79,644
Continuing operations
Profit for the period attributable to owners of the Company before BA movement 19,924 60,845 87,937
BA movement 184 (3,480) (3,772)
Earnings used in basic and diluted EPS 20,108 57,365 84,165
Discontinued operations
Loss for the period attributable to owners of the Company before BA movement (2,129) (263) (4,389)
BA movement 64 (71) (132)
Earnings used in basic and diluted EPS (2,065) (334) (4,521)
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 44.90cts 152.85cts 210.79cts
- Basic and diluted EPS after BA movement 45.52cts 143.89cts 200.94cts
Continuing operations
- Basic and diluted EPS before BA movement 50.27cts 153.51cts 221.86cts
- Basic and diluted EPS after BA movement 50.73cts 144.73cts 212.34cts
Discontinued operations
- Basic and diluted EPS before BA movement (5.37)cts (0.66)cts (11.07)cts
- Basic and diluted EPS after BA movement (5.21)cts (0.84)cts (11.41)cts
9. 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:
2023 2022 2022
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 434 434 5,345 3,016 1,549 797
Due from cooperatives under Plasma scheme 19,708 13,390 17,246 12,373 17,414 11,729
20,142 13,824 22,591 15,389 18,963 12,526
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 2022 and Discount rate The higher the discount rate, the lower the fair value.
2022: 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.
10.25% (H1 2022: 7.00%, 2022: 8.50%).
10. Acquisition of non-controlling interests
In June 2023, the Group also acquired some additional 0.4% and 4.5% interest
in the voting shares of PT Sawit Graha Manunggal ("SGM") and PT Kahayan Agro
Plantation ("KAP"), respectively, increasing the Group ownership interest to
almost 100% with a consideration of $2.6 million. The following is the
schedule of additional interest acquired in SGM and KAP:
$000
Consideration paid to non-controlling shareholders 2,608
Carrying value of the additional interest (120)
Difference recognised in retained earnings 2,488
11. Subsequent events
The disposal of the three non-performing plantations in South Sumatera, namely
PT Riau Agrindo Agung, PT Karya Kencana Sentosa Tiga and PT Empat Lawang Agro
Perkasa, to Mrs Lina (also known as Liena Efendy) and Miss Lenny Nurimba on 5
July 2023 for a total cash consideration of $8.5 million had been completed.
Since the Group is no longer in control of the subsidiaries, all the assets
and liabilities of the subsidiaries will be derecognised from July 2023
onwards.
In July 2023, the Group also completed the acquisition of 25% of the issued
share capital of PT United Kingdom Indonesia Plantations and the 10% of the
issued share capital of PT Mitra Puding Mas, from PT Canadianty Corporindo,
the minority shareholder in Indonesia, for a total cash consideration of
$25.2million, increasing the Group ownership interest to 100%.
12. Report and financial information
Copies of the interim report for the Group for the period ended 30 June 2023
are available on the AEP website at https://www.angloeastern.co.uk/.
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