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(Alliance News) - Anglo-Eastern Plantations PLC on Tuesday reported a deterioration in its results for 2019, forecasting an improvement in crude palm oil prices for 2020 as well as an expected erosion to its margins.
Shares in the palm oil and rubber producer closed 5.4% lower at 470.00 pence each on Tuesday in London.
For 2019, Anglo-Eastern posted revenue of USD219.1 million, down 13% from USD250.9 million reported for 2018. Pretax profit was USD15.6 million, down from USD33.2 million.
The lower revenue was attributed to lower fresh fruit bunches production arising from generally dry weather across plantations, and weak pricing of crude palm oil.
During the year, the mills processed 7% less bunches and total crude palm oil production was down by 6% to 394,700 tonnes. Weak crude palm oil prices in the first half contributed to the average price of crude palm oil being 5% lower at USD565 per metric tonne.
A final dividend payout of 0.5 cents was declared, up from 0.3 cents.
Looking ahead, Anglo-Eastern said that while fresh fruit bunches in the first three months to March were 2% higher year-on-year and CPO prices are expected to be "fairly better" due to higher demand from palm biodiesel mandates in Indonesia and Malaysia, it expects rising material costs and wages in Indonesia to increase the overall production cost in 2020, thereby raising overall estate costs and eroding profit margins.
"Barring any unforeseen circumstances, the group is confident that CPO demand will be sustainable in the long-term and we can expect a satisfactory trading out-turn and cash flow for 2020," the company said.
Turning to the ongoing Covid-19 pandemic, Chair Lim Siew Kim said: "Although Malaysia and parts of Indonesia are in lockdown, our plantations and mills are operating close to normal."
By Ife Taiwo; ifetaiwo@alliancenews.com
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