(Alliance News) - Anglo-Eastern Plantations PLC on Thursday reinstated dividends and announced a share buyback programme, as its interim profit dived amid a plummeted palm oil price.
For the six months to June 30, the Indonesia and Malaysia-focused palm oil and rubber producer reported a pretax profit of USD32.5 million, down sharply from USD89.5 million a year prior. Basic earnings per share fell to 50.73 US cents from 144.73 cents.
Revenue declined 30% to USD173.4 million from USD249.2 million.
Notably, the average price for crude palm oil fell 40% to USD991 per metric tonne from USD1,640 a year prior. "The trend of crude palm oil price in the first half of 2023 reflected the increase in inventory of soft oils amidst reports of a slowdown in global demand," Anglo-Eastern said.
The company sold more crude palm oil at 201,800 metric tonnes in the first half of 2023, up 0.9% from 200,000 metric tonnes a year prior.
Oil palm output fell 5.1% to 522,700 from 550,800 metric tonnes, however.
Anglo-Eastern reinstated a dividend, which it said was for the full year 2023, of 15.0 US cents per share.
Further, the company announced a share buyback programme of up to GBP3.2 million, which will be repurchased by investment bank Panmure Gordon UK Ltd on the behalf of Anglo-Eastern Plantations.
Anglo-Eastern plans to buy back up to 396,360 shares by its next annual general meeting. The company's last AGM was on June 16.
Looking ahead, Anglo-Eastern expects the crude palm oil price to rise "due to a projected drop in soybean production in the US", and a "strong" commitment by the Indonesian government for the B35 biodiesel mandate to strengthen local demand.
The company said it might see some impact on crude palm oil and sunflower oil prices from Russia's blockade of black sea grain. It added that the drought brought by the El Nino weather phenomenon is not expected "to have a significant effect on yield for the second half of 2023. The effect, if any would be more prominent in 2024".
Anglo-Eastern Plantations shares were flat at 678.00 pence each on Thursday morning in London.
By Tom Budszus, Alliance News reporter
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Anglo-Eastern Plantations (AEP)