REG - M. P. Evans Group - Half-year Report
12/09/2022 07:01
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RNS Number : 0088Z M. P. Evans Group PLC 12 September 2022
M.P. EVANS GROUP PLC
M.P. Evans Group PLC ("M.P. Evans" or "the Group"), a producer of sustainable
Indonesian palm oil, announces its unaudited interim results for the six
months ended 30 June 2022.
THE QUEEN
We are deeply saddened by the death of Her Majesty, Queen Elizabeth II and we
mourn the loss of a remarkable and inspiring monarch, a constant throughout so
many of our lives. On behalf of everyone at M.P. Evans, we send our
condolences to King Charles III and to all members of the Royal Family.
highlights
§ 4% increase in Group crop to 430,400 tonnes (2021 - 413,200 tonnes)
§ - maintained total CPO production at 160,800 tonnes (2021 - 161,400 tonnes)
§ 43% increase in mill-gate CPO price to US$1,035 per tonne (2021 US$724 per
tonne)
§ 74% increase in sustainability premia to US$3.3 million (2021 US$1.9
million)
§ 27% increase in cost of Group palm product to US$425 per tonne (2021 US$335
per tonne)
§ 49% increase in operating profit to US$61.7 million (2021 US$41.3 million)
§ 65% increase in earnings per share to 63.3p (2021 - 38.3p)
§ 25% increase in interim dividend per share to 12.5p (2021 - 10p)
§ Net cash surplus of US$13.5 million (2021 net debt US$67.7 million)
M.P. Evans executive chairman, Peter Hadsley-Chaplin, commented: "The Group
has delivered an excellent set of results for the first half of 2022,
supported by the high CPO price environment, but once again demonstrating the
benefits of the Group's commitment to long-term responsible management and
development of its estates. We are delighted to propose an increase in the
interim dividend to 12.5p per share, in line with our progressive dividend
policy."
12 September 2022
Enquiries:
M.P. Evans Group PLC Telephone: 01892 516333
Peter Hadsley-Chaplin - Executive chairman
Matthew Coulson - Chief executive
Peel Hunt LLP (Nomad and joint broker) Telephone: 020 7418 8900
Dan Webster, Andrew Clark, Lalit Bose
finnCap (Joint broker) Telephone: 020 7220 0500
Tim Redfern, Harriet Ward
Hudson Sandler (Communications consultants) Telephone: 020 7796 4133
Charlie Jack, Amelia Craddock, Francis Kerrigan
An analysts' meeting will be held today at 9:30am at the offices of Hudson
Sandler, 25 Charterhouse Square, London EC1M 6AE.
Overview
The Group achieved a record gross profit of US$64.8 million in the first half
of 2022, more than 50% higher than the US$42.7 million achieved in the same
period of 2021. Operating profit in the period was US$61.7 million (2021
US$41.3 million). After a seasonal low-cropping period at the start of the
year, crop from the Group's own areas and that of its associated scheme
smallholders progressively increased in the first half of 2022. Purchases of
independent crop were deliberately scaled back in May and June in response to
the temporary export ban in Indonesia, resulting in a small reduction in
purchases from outside suppliers in the first half. Overall, the total crop
processed by the Group was 705,700 tonnes, marginally above the 702,300 tonnes
processed in the first half of 2021. Crude palm oil ("CPO") production was
160,800 tonnes in the first half of the year, similar to the 161,400 tonnes
produced in 2021. However, production in the Group's own mills increased by
12% as the Group's newest mill at Bumi Mas was operational throughout the
period.
CPO prices reached historic highs during the first half of 2022, peaking at
almost US$2,000 per tonne cif Rotterdam in early March, no doubt partly in
response to the war in Ukraine and consequential concerns regarding world
vegetable-oil supplies. Whilst it has traded within a wide range, the average
cif Rotterdam price during the first half of the year was US$1,622. The
Indonesian government responded to the high-price environment by increasing
the taxes applicable to palm oil, and enforcing a temporary ban on its export
during part of April and May. Despite these changes, the Group achieved an
average mill-gate price for its CPO of US$1,035 per tonne, 43% higher than
that achieved for the same period in 2021, and 28% higher than the average
achieved for all of the previous year. The Group's production costs increased
during the first half of the year, partly because of inflationary pressures
applicable to production from Group areas, but more so as the purchase cost of
fresh fruit bunches ("ffb") for processing increased given the linkage to CPO
selling prices. The Group's cost per tonne of production for CPO produced from
Group-owned areas increased to US$425 (2021 US$335), whilst total cost of
production increased to US$598 (2021 US$437).
During the first half of the year, the Group generated an operating cash
inflow before interest and tax payments of US$69.7 million (2021 US$33.0
million). It invested a further US$13.9 million in capital expenditure during
the first half of 2022, with one of the Group's largest projects being the
development of the palm-oil mill at Musi Rawas in South Sumatra. This remains
on track for completion around the end of this year, at which point the Group
will have six operational mills and be able to process all of its own crop
with the exception of the crop from its 2,400-hectare estate, Simpang Kiri,
which is currently too small to warrant its own mill. The Group returned
US$22.1 million to shareholders by way of dividends, and repaid a further
US$14.6 million of the Group's loans during the first half of the year. In
addition, following approval by shareholders at the AGM, the Group started a
share buyback programme in June 2022. Net debt stood at US$5.4 million at the
start of the year, and due to the Group's continuing cash generation, this had
become net cash of US$13.5 million by the end of the period.
Dividends
The Group paid a 5p per share special dividend in February 2022. This was in
respect of the sale of the Bertam Estate land to the Group's associated
company Bertam Properties Sdn Bhd, which completed in October 2021. Given the
high yields and extraction rates achieved by the Group, and the continuing
strong cash generation, the board is proposing an increase in the interim
dividend to 12.5p per share (2021 - 10p per share).
The Group has an unbroken track record over more than thirty years, of at
least maintaining, or whenever possible increasing, ordinary dividends. The
board believes that the ongoing trend of increasing yields from the Group's
estates, combined with the increasing milling capacity, forms a firm
foundation for continuing strong cash flows, which in turn supports the
Group's progressive dividend policy.
Results for the period
Crops and production
Details of the Group's crops, production extraction rates and average selling
prices for the first half of 2022 are shown in the following table:
6 months ended 6 months ended Year ended
30 June Increase/ 30 June 31 December
2022 (decrease) 2021 2021
Crops - ffb Tonnes % Tonnes Tonnes
Own crops
Kota Bangun 106,200 2 104,200 194,300
Bangka 82,900 (7) 89,200 152,300
Pangkatan group 89,900 8 83,500 179,000
Bumi Mas 80,000 (1) 80,700 165,700
Musi Rawas 49,000 54 31,800 69,400
Simpang Kiri 22,400 (6) 23,800 49,000
430,400 4 413,200 809,700
Scheme-smallholder crops
Kota Bangun 44,000 (3) 45,500 86,300
Bangka 44,400 (3) 45,900 80,800
Pangkatan group 400 - - -
Bumi Mas 13,400 (7) 14,300 29,900
Musi Rawas 24,200 59 15,200 32,300
126,400 4 120,900 229,300
Independent crops purchased
Kota Bangun 95,200 (11) 107,300 210,600
Bangka 25,500 (39) 41,700 78,200
Pangkatan group 12,400 (35) 19,200 35,900
Bumi Mas 15,800 - - 2,500
148,900 (11) 168,200 327,200
705,700 - 702,300 1,366,200
Production
Crude palm oil
Kota Bangun 55,400 (8) 59,900 114,400
Bangka 36,600 (14) 42,800 74,200
Pangkatan group 23,800 3 23,200 48,600
Bumi Mas 25,100 - - 20,800
140,900 12 125,900 258,000
Bumi Mas - - 20,600 23,100
Musi Rawas 14,900 55 9,600 20,800
Simpang Kiri 5,000 (6) 5,300 11,000
19,900 (44) 35,500 54,900
160,800 - 161,400 312,900
Palm kernels
Kota Bangun 12,200 7 11,400 22,700
Bangka 8,800 (13) 10,100 17,800
Pangkatan group 5,500 2 5,400 11,300
Bumi Mas 4,200 - - 3,400
30,700 14 26,900 55,200
Bumi Mas - - 4,500 5,000
Musi Rawas 3,400 55 2,200 4,700
Simpang Kiri 1,000 (9) 1,100 2,200
4,400 (44) 7,800 11,900
35,100 1 34,700 67,100
Extraction rate % % %
Crude palm oil
Kota Bangun - Bumi Permai 23.3 (3) 23.9 23.8
Kota Bangun - Rahayu 21.4 (4) 22.4 22.5
Bangka 23.9 (1) 24.2 23.8
Pangkatan group 23.2 3 22.6 22.6
Bumi Mas 23.1 - - 22.8
23.1 (2) 23.5 23.3
Bumi Mas - - 21.7 21.6
Musi Rawas 20.4 - 20.5 20.4
Simpang Kiri 22.5 - 22.5 22.5
Palm kernels
Kota Bangun - Bumi Permai 5.3 13 4.7 4.9
Kota Bangun - Rahayu 4.3 5 4.1 4.2
Bangka 5.9 4 5.7 5.7
Pangkatan group 5.3 - 5.3 5.3
Bumi Mas 3.8 - - 3.7
5.1 - 5.0 5.0
Bumi Mas - - 4.7 4.7
Musi Rawas 4.7 (2) 4.6 4.6
Simpang Kiri 4.5 - 4.5 4.5
Average selling prices US$ US$ US$
CPO (cif Rotterdam) 1,622 1,115 1,195
CPO - Group mill gate 1,035 724 810
Palm-kernel oil 1,968 1,275 1,424
Palm kernels - Group mill gate 830 491 533
Mill-gate prices
CPO prices have been at historically high levels throughout much of the first
half of 2022, reaching a high point of US$1,990 per tonne cif Rotterdam in
early March, shortly after the outbreak of war between Russia and Ukraine,
amid concerns over global vegetable-oil shortages. The average cif Rotterdam
CPO price in the first half of the year was US$1,622 per tonne, 45% higher
than the same period in 2021. The Group does not receive the cif Rotterdam
price when selling its output, rather it tenders CPO for sale based on a
'mill-gate' price. This will be lower, to take account of freight and
insurance charges, but also to allow for export taxes and levies imposed by
the Indonesian government. These apply based on graduated scales, therefore
resulting in wider gaps between Rotterdam and mill-gate prices at higher CPO
prices. The sales environment was further complicated in the first half of
2022, as discussed in the 'palm-oil market' section, by the introduction of
other measures by the Indonesian government, including a temporary ban on the
export of CPO. Despite this, the Group achieved an average mill-gate price in
the first half of 2022 of US$1,035 per tonne, a 43% increase over the US$724
achieved in the first half of 2021.
Palm-kernel pricing was particularly strong in the early part of 2022, albeit
softening towards the middle of the year. At its peak in March the Group
achieved US$980 per tonne. The average selling price in the first half of the
year was US$830 per tonne, 69% higher than the US$491 achieved in the first
half of 2021.
The Group continued to focus on selling its output, both CPO and PK, as
sustainable production, and total sustainability income increased in the first
half of the year to US$3.3 million (2021 US$1.9 million), with 64% of the
output from Group mills sold with sustainability credits attached. Average
sustainability premia (over the tonnage sold as sustainable) increased for
both CPO and PK in the period, with the average for CPO up to US$17.50 (2021
US$16.40) and for PK up significantly on growing demand within related
products to US$87.20 (2021 US$45.70).
Costs
The cost per tonne of palm product produced from the Group's own areas
increased in the first half of the year to US$425 per tonne, US$90 higher than
the US$335 per tonne in the first half of 2021. There are several reasons for
the increase. Firstly, as already mentioned, the Group's estates in East
Kalimantan, especially Kota Bangun, experienced a period of prolonged wet
weather during the first half of the year. This increased cost per tonne due
to: a lower-than-expected yield, with harvesting challenges in wet conditions;
higher operational costs associated with crop evacuation and transport, plus
additional costs on road and field maintenance; and, delays in mill deliveries
leading to extraction rate reductions. Secondly, as anticipated, the Group has
experienced some cost inflation in the first half of the year. This has been
particularly evident in fertiliser input costs, which are running at US$30-40
per tonne higher, almost double than for the same period in 2021. Thirdly, as
reported in the 2021 interim report, the Group benefited last year from a
non-recurring non-cash credit amounting to approximately US$10 per tonne from
a change in pension accounting in Indonesia. Finally, the Group is including
the new Bumi Mas mill in the analysis of cost per tonne in 2022 unlike the
first half of 2021, and as expected for a new mill, its cost per tonne is
higher than the Group average.
Looking ahead to the remainder of the year, as crop and production increase,
costs will be spread over a larger volume. In addition, field conditions are
noticeably better at Kota Bangun as the weather conditions have improved. Unit
costs are expected to reduce at Bumi Mas as the mill operations become
increasingly efficient.
During the first half of the year, the cost to purchase ffb, whether from
scheme smallholders or from independent suppliers, was significantly higher
than in the same period of 2021, as the cost to purchase ffb is linked to the
selling price of CPO. As a result, the Group's total cost per tonne in the
first half of the year, including the processing of ffb from all sources, was
US$598 per tonne (2021 US$437) compared to the average mill-gate price
achieved of US$1,035 (2021 US$724). The Group's gross profit from its
locations with mills was US$58.9 million (2021 US$37.3 million) in the first
half of the year.
As the Group has continued its programme of developing its own palm-oil mills,
a smaller proportion of CPO production is coming from outside mills, 12% in
the first half of 2022 compared to 22% in the same period in 2021. Despite
this, locations sending crop for outside processing still achieved a gross
profit in the first six months of the year of US$5.9 million (2021 US$5.5
million).
Planting
Along with the development of the Group's sixth palm-oil mill, the Group is
continuing to plant new oil palms at its youngest estate, Musi Rawas, in South
Sumatra. The Group's objective is to reach a total planted hectarage on this
estate, including Group areas and those planted for the Group's associated
scheme smallholders, of a minimum of 10,000 hectares, which will support the
mill as the young plantings mature and the yield continues to increase. During
the first half of the year, a further 165 hectares were planted bringing the
total planted area at Musi Rawas to 9,220 hectares, and the Group remains
confident of being able to achieve its planting objective.
New land
The Group remains committed to its growth strategy, part of which involves
adding to its planted hectarage. To achieve this, the Group has already
identified several potential targets for acquisition. These include both
standalone projects and planted areas close to some of its existing estates
which would increase the proportion of Group-owned input to its own mills, and
reduce the requirement to fill spare capacity with crop purchased from
independent suppliers. Whilst the strong CPO price environment in the first
half of 2022 has been beneficial for the Group's trading results, it may have
temporarily hampered some of the Group's discussions over potential
acquisitions due to some unrealistic price expectations. However, this remains
an important strategic objective for the Group.
Sustainability
The Group's certified sustainable production was 56% of total output, similar
to the 54% reported for the first half of 2021. RSPO certification is awarded
to mills rather than estates, and at the end of June 2022, three of the
Group's five operational mills had achieved RSPO certification. Increasing
milling capacity, and obtaining this accreditation for all mills remains a key
priority for the Group. However, RSPO audits are in a post-pandemic catch-up
phase, and the Group is working hard to ensure that both the Rahayu mill at
Kota Bangun and the Bumi Mas mill obtain certification as soon as possible. In
the meantime, all the Group's crop, and that of its associated scheme
smallholders, is produced in full accordance with RSPO standards.
Associated companies
The Group's 40%-held Malaysian property joint venture, Bertam Properties Sdn
Berhad ("Bertam Properties") continued to trade profitably during the first
half of 2022, with the Group's share of its profit in the first half of the
year amounting to US$0.1 million (2021 US$0.2 million). Bertam Properties
continues to develop high-quality and affordable homes within their market in
Malaysia. The Group's 38%-owned Indonesian oil-palm associate, PT Kerasaan
Indonesia, achieved an increase in profit in the first half of the year on
higher CPO prices, the Group's share being US$1.1 million (2021 US$0.6
million).
Result
Overall, the Group recorded revenue of US$170.3 million in the first half of
2022, an increase of 33% on the same period in 2021. The increase was lower
than mill-gate price increases observed in the period as CPO and PK stocks
were higher at the end of June compared to the end of the previous December.
This was a consequence of the delay in shipments caused by the export ban in
April and May but this should unwind during the second half of the year.
Whilst the Group experienced some cost increases in the period, these were
outweighed by the rising selling prices, resulting in an increase in gross
margin to 38% (2021 - 33%) and a gross profit of US$64.8 million (2021 US$42.7
million). Whilst foreign-exchange losses increased to US$1.9 million (2021
US$0.6 million) predominantly on translation of monetary assets held in
Indonesian rupiah, finance costs decreased to US$1.2 million (2021 US$1.4
million) on lower borrowings, despite increasing interest rates. Profit before
and after tax, and retained profit, all increased by more than 50%, and basic
earnings per share increased to 63.3p (2021 - 38.3p).
CURRENT TRADING AND PROSPECTS
The total crop processed in the two months to 31 August 2022 was 270,700
tonnes, bringing the total for the year to date to 976,400 tonnes as shown in
the following table:
8 months ended 8 months ended
31 August Increase/ 31 August
2022 (decrease) 2021
Tonnes % Tonnes
Own crops 604,200 9 555,900
Scheme-smallholder crops 176,600 11 158,500
Independent crops purchased 195,600 (9) 215,400
976,400 5 929,800
During the two months to August 2022, the crops from the Group's own areas and
those of its associated scheme smallholders continued the upward trend
observed towards the end of the first half of the year and, as a result, the
increase in comparison to the prior year extended to 9% for Group areas and to
11% for scheme smallholders. The variance to prior year was particularly
marked in both Bangka and Musi Rawas. In Bangka, the difference in seasonal
patterns between 2022 and 2021 is such that the crop for the two months to
August 2022 is 48% higher than the same two months of 2021. In Musi Rawas, the
increase in crop is derived from both seasonality and the benefit of the
additional year of maturing from that young plantation, and there the
equivalent increase is 76%. In July and August, purchases of independent crop
were at similar levels to 2021, reducing the proportionate deficit from that
observed at June.
At Musi Rawas, planting has progressed gradually during July and August with
the total planted area having increased to 9,275 hectares. Development of the
new palm-oil mill is continuing well, with the expectation that processing
will begin around the end of the year.
CPO has traded within a lower range in July and August when compared to the
first half of the year, with cif Rotterdam prices between US$1,030 and
US$1,360. One of the major factors behind the price reduction has been the
increased amount of supply in the market after the Indonesian export ban was
lifted towards the end of May, and the time required to clear the 'backlog' in
the system. From a producer's perspective, the pricing position was made more
challenging after the export ban was lifted due to the imposition by the
Indonesian government of an export tariff of US$200 per tonne. This was in
addition to the two existing taxes (the duty and the levy) such that when
applied at their top rates, which they were for the first half of July, the
total tax charge per tonne of CPO exported was US$688. The export tariff was
designed to be in place only until the end of July, and furthermore, the
government announced a suspension of the export levy for August, and this levy
'holiday' has recently been extended until the end of October. Based on the
relevant tax tables and reference prices used by the Indonesian government,
export taxes were charged at US$74 per tonne for the second half of August and
have been set at the same rate for the first half of September. Mill-gate
prices have increased from those achieved immediately after the export ban was
lifted, with the Group receiving recent pricing around US$750 per tonne. For
the year to date up to the end of August, the Group has achieved an average
mill-gate CPO price of US$915 per tonne.
The board is of the view that, as the impact of the temporary export ban
recedes, and any remaining stock overhang is eliminated, stability should
return to the CPO market. Furthermore, the government has put in place new
tables with regard to the export tax and levy effective from the start of
September which should give clarity to market participants. The Group's own
areas continue on their long-term trend of increasing yields, and milling
capacity will increase once again with the introduction of the Musi Rawas mill
around the end of 2022. All of these factors put the Group in a strong
position to continue delivering healthy cash flows and progressive shareholder
returns.
UNAUDITED CONSOLIDATED INCOME STATEMENT
For the six months ended 30 June 2022
6 months 6 months
ended ended Year ended
30 June 30 June 31 December
2022 2021 2021
Note US$'000 US$'000 US$'000
Continuing operations
Revenue 3 170,282 128,033 276,592
Cost of sales* (105,516) (85,302) (172,979)
Gross profit 3 64,766 42,731 103,613
Gain on biological assets 233 762 1,771
Profit on sale of land - - 13,946
Foreign-exchange losses (1,864) (570) (820)
Other administrative expenses (2,290) (2,350) (5,380)
Other income 856 718 1,426
Operating profit 61,701 41,291 114,556
Finance income 679 244 645
Finance costs (1,154) (1,445) (2,699)
Profit before taxation 61,226 40,090 112,502
Tax on profit on ordinary activities (14,218) (9,656) (23,228)
Profit after tax 47,008 30,434 89,274
Share of associated companies' profit after tax 3 1,197 774 2,508
Profit for the period 48,205 31,208 91,782
Attributable to:
Owners of M.P. Evans Group PLC 45,004 28,857 86,406
Non-controlling interests 3,201 2,351 5,376
48,205 31,208 91,782
US cents US cents US cents
Continuing operations
Basic earnings per 10p share 82.3 53.0 158.4
Diluted earnings per 10p share 82.0 52.8 157.9
Pence Pence Pence
Basic earnings per 10p share
Continuing operations 63.3 38.3 115.6
*includes a US$2.1 million past service credit in 2021 relating to past
service liabilities in Indonesia
UNAUDITED CONSOLIDATED BALANCE SHEET
As at 30 June 2022
30 June 30 June 31 December
2022 2021 2021
Note US$'000 US$'000 US$'000
Non-current assets
Goodwill 11,767 11,767 11,767
Other intangible assets 1,139 1,298 1,222
Property, plant and equipment 403,578 394,981 401,005
Investments in associates 13,440 21,123 13,242
Investments 61 65 65
Deferred-tax asset 1,246 4,129 3,602
Trade and other receivables 15,226 11,743 16,618
446,457 445,106 447,521
Current assets
Biological assets 4,753 3,511 4,520
Inventories 36,109 14,846 21,754
Trade and other receivables 26,931 45,093 41,892
Current-tax asset 2,673 3,600 2,522
Current-asset investments - 324 -
Cash and cash equivalents 69,977 29,737 65,609
140,443 97,111 136,297
Total assets 586,900 542,217 583,818
Current liabilities
Borrowings 16,130 39,743 20,531
Trade and other payables 30,727 22,119 31,200
Current-tax liabilities 5,335 6,946 12,219
52,192 68,808 63,950
Net current assets 88,251 28,303 72,347
Non-current liabilities
Borrowings 40,366 58,007 50,517
Deferred-tax liability 12,391 11,371 11,417
Retirement-benefit obligations 12,803 12,086 12,886
65,560 81,464 74,820
Total liabilities 117,752 150,272 138,770
Net assets 469,148 391,945 445,048
Equity
Share capital 5 9,228 9,204 9,232
Other reserves 57,630 54,297 55,467
Retained earnings 386,796 316,343 366,825
Equity attributable to the
owners of M.P. Evans Group PLC 453,654 379,844 431,524
Non-controlling interests 15,494 12,101 13,524
Total equity 469,148 391,945 445,048
UNAUDITED STATEMENT OF CHANGES IN CONSOLIDATED EQUITY
For the six months ended 30 June 2022
6 months 6 months Year
ended ended ended
30 June 30 June 31 December
2022 2021 2021
US$'000 US$'000 US$'000
Profit for the period 48,205 31,208 91,782
Other comprehensive (expense)/income for the period (1,459) (356) 34
Total comprehensive income for the period 46,746 30,852 91,816
Issue of share capital 191 - 827
Share buy-backs (798) - -
Dividends paid (22,121) (13,150) (22,168)
Credit to equity for equity-settled share-based payments 82 103 433
Transactions with owners (22,646) (13,047) (20,908)
At 1 January 445,048 374,140 374,140
Balance at period end 469,148 391,945 445,048
UNAUDITED CONSOLIDATED CASH-FLOW STATEMENT
For the six months ended 30 June 2022
6 months 6 months Year
ended ended ended
30 June 30 June 31 December
2022 2021 2021
Note US$'000 US$'000 US$'000
Net cash generated by operating activities 6 50,642 24,954 92,272
Investing activities
Purchase of property, plant and equipment (13,920) (15,084) (32,510)
Purchase of intangible assets - - (8)
Interest received 405 244 316
Decrease in bank deposits treated as
current asset investments - 10 334
Decrease in receivables from smallholder
co-operatives 3,943 13,013 17,630
Proceeds on disposal of property, plant and equipment 137 516 15,125
Net cash (used by)/from investing activities (9,435) (1,301) 887
Financing activities
Repayment of borrowings (14,552) (7,934) (34,636)
Lease liability payments (38) (108) (218)
Dividends paid to Company shareholders (20,889) (13,150) (20,527)
Dividends paid to non-controlling interest (123) - (164)
Purchase of non-controlling interests - - 827
Buy-back of Company shares (798) - -
Net cash used by financing activities (36,400) (21,192) (54,718)
Net increase in cash and cash equivalents 4,807 2,461 38,441
Cash and cash equivalents at 1 January 65,609 27,222 27,222
Effect of foreign-exchange rates on cash and cash equivalents (439) 54 (54)
Net cash and cash equivalents at period end 69,977 29,737 65,609
NOTES TO THE INTERIM STATEMENTS
For the six months ended 30 June 2022
Note 1 General information
The financial information for the six-month periods ended 30 June 2022 and
2021 has been neither audited nor reviewed by the Group's auditors and does
not constitute statutory accounts within the meaning of section 434 of the
Companies Act 2006. The financial information for the year ended 31 December
2021 is abridged from the statutory accounts. The 31 December 2021 statutory
accounts have been reported on by the Group's auditors for that year, BDO LLP,
and have been filed with the Registrar of Companies. The report of the
auditors thereon was unqualified and did not contain a statement under section
498(2) or (3) of the Companies Act 2006, nor did it contain any matters to
which the auditors drew attention without qualifying their audit report.
Note 2 Accounting policies
The consolidated financial results have been prepared in accordance with
International Financial Reporting Standards (IFRS and IFRIC interpretations)
issued by the International Accounting Standards Board (IASB), and with those
parts of the Companies Act 2006 applicable to companies preparing accounts
under IFRS.
The accounting policies of the Group follow those set out in the annual
financial statements at 31 December 2021. The Group has made a number of
critical accounting judgements and key estimates in the preparation of this
interim report, and they remain consistent with those set out in note 3(r) to
the 2021 annual financial statements.
Note 3 Segment information
The Group's reportable segments are distinguished by location and product:
Indonesian oil-palm plantation products in Indonesia and Malaysian property
development.
Plantation Property
Indonesia Malaysia Other Total
US$'000 US$'000 US$'000 US$'000
6 months ended 30 June 2022
Revenue 170,282 - - 170,282
Gross profit 64,766 - - 64,766
Share of associated companies' profit after tax 1,108 89 - 1,197
6 months ended 30 June 2021
Revenue 127,984 - 49 128,033
Gross profit/(loss) 42,753 - (22) 42,731
Share of associated companies' profit after tax 565 209 - 774
Year ended 31 December 2021
Revenue 276,485 - 107 276,592
Gross profit 103,605 - 8 103,613
Share of associated companies' profit after tax 1,460 1,048 - 2,508
Note 4 Dividends
6 months ended 6 months ended Year ended
30 June 30 June 31 December
2022 2021 2021
US$'000 US$'000 US$'000
2020 final dividend - 17p per 10p share - 13,150 13,150
2021 interim dividend - 10p per 10p share - - 7,377
2021 final dividend - 25p per 10p share 17,227 - -
2021 special dividend - 5p per 10p share 3,662 - -
20,889 13,150 20,527
Subsequent to 30 June 2022, the board has declared an interim dividend of
12.5p per 10p share. The dividend will be paid on or after 4 November 2022 to
those shareholders on the register at the close of business on 14 October
2022.
Note 5 Share capital
30 June 30 June 31 December 30 June 30 June 31 December
2022 2021 2021 2022 2021 2021
Number Number Number US$'000 US$'000 US$'000
Shares of 10p each
At 1 January 54,696,253 54,490,253 54,490,253 9,232 9,204 9,204
Issued 30,000 - 206,000 4 - 28
Redeemed (69,604) - - (8) - -
At period end 54,656,649 54,490,253 54,696,253 9,228 9,204 9,232
Note 6 Analysis of movements in cash flow
6 months ended 6 months ended Year ended
30 June 30 June 31 December
2022 2021 2021
US$'000 US$'000 US$'000
Operating profit 61,701 41,291 114,556
Biological gain (233) (762) (1,771)
Disposal of property, plant and equipment 242 96 (13,538)
Release of deferred profit (16) (23) (64)
Depreciation of property, plant and equipment 10,968 10,077 20,641
Amortisation of intangible assets 83 83 167
Retirement-benefit obligation (83) (1,862) (351)
Share-based payments 272 241 433
Dividends from associated companies - 1,216 2,424
Operating cash flows before movements
in working capital 72,934 50,357 122,497
Increase in inventories (14,355) (3,229) (10,137)
Decrease/(increase) in receivables 11,575 (10,312) (8,461)
(Decrease)/increase in payables (435) (3,832) 5,341
Cash generated by operating activities 69,719 32,984 109,240
Income tax paid (17,923) (6,585) (14,269)
Interest paid (1,154) (1,445) (2,699)
Net cash generated by operating activities 50,642 24,954 92,272
Note 7 Exchange rates
30 June 30 June 31 December
2022 2021 2021
US$1=Indonesian Rupiah - average 14,452 14,273 14,295
- period end 14,898 14,500 14,253
US$1=Malaysian Ringgit - average 4.27 4.10 4.14
- period end 4.41 4.15 4.17
£1=US Dollar - average 1.30 1.38 1.37
- period end 1.21 1.38 1.35
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