Anglo-Eastern Plant - Trading Statement
02/11/2022 09:00
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RNS Number : 0592F Anglo-Eastern Plantations PLC 02 November 2022
2 November 2022
Anglo-Eastern Plantations Plc
("AEP" or the "Company")
Trading Statement
Anglo-Eastern Plantations Plc, a major producer of palm oil and some rubber
across Indonesia and Malaysia, today announces a trading update covering the
nine months to 30 September 2022.
Operational and financial performance
For the first nine months ended 30 September 2022, our own production of fresh
fruit bunches ("FFB") from continuing operations was 859,900mt, a decrease of
3% compared to the same period in 2021 (9M21: 886,980mt). Replanting in
Bengkulu has reduced the matured areas by almost 1,800 hectares over the last
two years which explained the decline of 11% in production in this region.
Production in Kalimantan region also experienced a drop of 8% due mainly to
seasonal variation. FFB bought-in was 845,850mt, a decrease of 4% in
comparison with the same period in 2021 (9M21: 878,590mt). Although North
Sumatera and Kalimantan regions managed to increase their purchase of outside
crops compared to the corresponding period in 2021, that did not make up for
the 17% decrease in crop purchase in the Bengkulu region, which was caused by
the temporary shutdown of a supplier's mill for maintenance in 2021. In
addition, some of AEP's mills had to reduce external crop purchases as their
storage tanks for CPO reached maximum capacity as inventories built up during
the export ban which lasted almost a month. Total Crude Palm Oil ("CPO")
produced was 351,460mt, a decrease of 3% compared to the corresponding period
in 2021 (9M21: 364,040mt) due to lower FFB supplied from both our own estates
and bought-in crops.
CPO price ex-Rotterdam averaged $1,471/mt for the first nine months of 2022.
This represents a significant increase of 27% from the average price of
$1,156/mt recorded in the corresponding period in 2021. Prices remain volatile
as CPO price ex-Rotterdam closed at $995/mt on 11 October 2022 compared to
$1,350/mt at the start of the year. Our Group's average ex-mill price for CPO
for the first nine months of the year was also higher by 23% at $896/mt (9M21:
$731/mt). The Group also benefited from higher palm kernel prices which were
35% higher at the average price of $635/mt against $469/mt last year.
The Group's balance sheet remains strong with no outstanding bank loans. The
Group had net cash of $252.6m at 30 September 2022 (3Q21: $192.2m).
Development
The Group's total landholding from its continuing operations comprises some
90,690 hectares of which the planted area stands at around 68,000 hectares.
The Group's new planting and replanting for the nine months ended 30 September
2022 totalled 1,367 hectares (including Plasma) against 2,129 hectares for the
corresponding period last year. Plasma planting for the period was 201
hectares (9M21: 352 hectares).
The construction works of the seventh mill in North Sumatera is approaching
the final stage of completion. There have been considerable delays due to the
late delivery of imported items caused by the long administrative process in
obtaining approval from the Government authorities. Bad weather also delayed
the construction of the effluent treatment plant which consists of multiple
tanks for the anaerobic and aerobic system to comply with the Environmental
Impact Assessment study. The mill is likely to be completed by the end of Q4
2022 and to be commissioned in Q1 2023.
Outlook
CPO prices are expected to be weak for the remaining part of the year 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 October 2022,
in its effort to flush out and reduce its stockpile of palm oil, could push
prices even lower.
For further enquiry, contact:
Anglo-Eastern Plantations Plc
Dato' John Lim Ewe Chuan +44 (0)20 7216 4621
Panmure Gordon (UK) Limited
Dominic Morley +44 (0)20 7886 2500
Note: The information communicated in this announcement is inside information
for the purposes of Article 7 of Market Abuse Regulation 596/2014 as it forms
part of UK domestic law by virtue of the European Union (Withdrawal) Act 2018.
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