Anglo-Eastern Plantations Regulatory News (AEP)

30 Apr 2008 07:01

Anglo-Eastern Plantations PLC30 April 2008 29 April 2008 ANGLO-EASTERN PLANTATIONS - PRELIMINARY ANNOUNCEMENT Profit by far a record, Board confident Anglo-Eastern Plantations Plc (AEP.L), which operates and is developing some83,000 hectares (ha) of plantations, primarily palm oil in Indonesia, announcesa record profit for 2007, by far, which was attributable to much improved pricesfor palm oil. Of equal significance, the group is now strongly positioned forfurther development through three substantial land acquisitions in 2007 and onein 2008. Financial Highlights •Revenue increased by 62% to $127.9m. •Operating profit increased by 100% to $52.5m, before biological asset (BA) adjustment, and by 87% to $53.5m, after BA adjustment. •Pre-tax profit increased by 97% to $52.6m, before BA adjustment, and by 85% to $53.6m, after BA adjustment. •Diluted EPS increased by 102% to 77.2cts, before BA adjustment, and by 88% to 78.4cts, after BA adjustment. •Year-end net cash totalled $23.3m, which compares with $9.6m at the end of 2006, despite expenditure of $14.5m on three acquisitions and capital expenditure of $12.2m. •In view of the positive outlook for palm oil and the recent satisfactory crops, the board is proposing to increase the 2007 annual dividend by 30% to 14.0cts per share. Commercial Highlights •The market average price for crude palm oil (CPO) for 2007 was $790/mt, compared to $479/mt in 2006, an increase of 65%. •Estate fresh fruit bunches (FFB) output for 2007 was 2% above the previous year, the small increase reflecting the severe drought in the second half of 2006 in Bengkulu and Malaysia. •During 2007 and early 2008, AEP made four acquisitions amounting to 58,000ha. This will enable the group to more than double its planted area from the present 38,660ha to about 83,000ha. •FFB crops so far in 2008 have been satisfactory on all estates - production is about 20% ahead of the same period in 2007 - and the CPO price has risen from $960/mt at the start of 2008 to around $1,160/mt at present. Mr Chan Teik Huat, Chairman and Chief Executive, stated "As long as any pricereaction from current levels is only modest, in the absence of any furtherincrease in Indonesian export levies and providing FFB crops maintain theirimproved levels, we can expect a satisfactory increase in profits and cash flowfor 2008." Enquiries: Anglo-Eastern Plantations Plc Rollo Barnes (Financial Director) 020-7236 2838 Bankside Consultants LimitedCharles Ponsonby 020-7367 8851 Chairman's statement Results I am pleased to report a record profit for 2007 which was attributable to muchimproved prices for palm oil. Of equal significance, the group is now stronglypositioned for further development through four substantial land acquisitions,three in 200 7 and one early in 2008. This will enable the planted area todouble in the next six years. To support this, we have arranged appropriateborrowing facilities. Group operating profit for 2007, before biological asset (BA) adjustment, was$52.5 million, precisely double that for 2006. Estate fresh fruit bunch (FFB)output for 2007 was 2% above the previous year. The small increase reflected theeffect of the severe drought in the second half of 2006 in Bengkulu andMalaysia. The good performance was mainly the result of the favourable crudepalm oil (CPO) price, which rose throughout the year to average 65% higher thanthat in 2006. The results were adversely affected by increases in Indonesianexport taxes on CPO. Profit before tax and after BA adjustment was $53.6 million, compared to $29.0million in 2006. The BA adjustment was a credit of $1.0 million, compared to$2.3 million in 2006, reflecting our estate valuations referred to below.However, as I now repeat with every results statement, the BA adjustment has nobearing on the operating performance or cash generation of the group. Earnings per share before BA adjustment increased by 102% in US dollars to 77.2cts, compared to 38.3 cts in 2006. This reflected a lower average tax ratearising from past losses carried forward in our Malaysian subsidiary. Insterling terms, EPS before BA adjustment increased by 86% to 38.4p from 20.6p. Financing Our policy is to fund the group's development from self-generated fundssupplemented by term bank loans. The three acquisitions in 2007, referred tounder 'Recent acquisitions' below, cost $14.5 million. In addition, capitalexpenditure on field development and completion of the new mill at Bina Pitriamounted to $12.2 million. During the year, we repaid $1.7 million of our existing borrowings, includingall the remaining $0.9 million of bank loans to our Malaysian operation. In anticipation of major capital expenditure, we secured and drew down in themiddle of 2007 a new five year loan of $34.5 million. Together with the group'sself-generated funds, this positioned us to act quickly if and when acquisitionopportunities arose. In addition, the group also arranged a revolving short-termfacility of $3.0 million, which was fully drawn down for the year end and wasrepaid early in 2008. At the end of 2007, the group's bank borrowings totalled $43.0 million againstcash of $66.3 million, giving net cash of $23.3 million, which compares with$9.6 million at the end of 2006. The effect of these substantial increases inboth borrowings and cash balances has been to increase interest costs andincome, with a resulting small increase of $0.2 million in net finance costs. Recent acquisitions In my statements for the last two years, I said that, in anticipation ofcompletion of planting of Bengkulu and Labuhan Bilik by 2009, our management inIndonesia were actively searching for both vacant land and planted estates forfurther expansion. It was pleasing to announce during 2007 and early 2008 fouracquisitions amounting to 58,000 ha. This will enable the group to more thandouble its planted area from the present 38,660 ha to about 83,000 ha. Whilethese new properties are all evidenced by official "rights to occupy" (atemporary title which precedes application for and grant of a full land title orHak Guna Usaha (HGU)), they require detailed survey. In addition to identifyingplantable areas, this survey involves an assessment of the areas that ought tobe set aside for local community use. With land available for commercial andprivate agriculture becoming increasingly scarce in Indonesia, this is animportant and sensitive issue. At present, we do not know for certain how largethese set aside areas will be. For the purposes of providing some indication, wehave estimated that we will be able to plant about 70% of the vacant land wehave acquired. Therefore, of the 58,000 ha acquired in 2007/8 to date about2,000 ha is already planted and approximately 40,000 ha is estimated to beplantable. The peak net development cost of the total plantable area of about 40,000ha ofthe above acquisitions is likely to be about $100 million over the period to2013. We plan to build four oil mills which will together cost about a further$35 million. Directors Mr Peter O'Connor and Mr Ho Soo Ching, two of our independent non-executivedirectors have decided not to seek re-election at the forthcoming annual generalmeeting. We thank them for their contribution and service rendered in pastyears. I am pleased to welcome Dato' John Lim as a non-executive director ofAnglo-Eastern with effect from 26 April 2008. Dato' Lim, aged 58, is a Fellow ofthe Association of Chartered Certified Accountants and has been partner for 10years with UHY Hacker Young LLP, Chartered Accountants, in London. He hasextensive audit and business consultancy experience, particularly with FarEastern clients with operations in the UK. The Combined Code on Corporate Governance requires non-executive directors whohave served for more than nine years to submit themselves for re-election everyyear. Our two remaining long serving non-executives are affected by thisprovision. In addition, the Code assumes that, after nine years, previouslyindependent non-executives cease to be independent. This applies to Datuk HenryChin, whom I specifically commend to you as continuing to be thoroughlyindependent. I recommend that shareholders vote in favour of re-appointment ofboth long serving non-executive directors. Our finance director, Mr Barnes is retiring on 30 April 2008. I am pleased towelcome Mr David Smith who was appointed a director of Anglo-Eastern with effectfrom 26 April 2008 and will take over from Mr Barnes as Finance Director andCompany Secretary on 1 May 2008. Mr Smith, aged 59, is a Chartered Accountant.He was previously with the Commonwealth Development Corporation and hasextensive international experience, particularly in agriculture. He has beeninvolved in investment in the oil palm sector and has worked in Indonesia inplantations. Outlook FFB crops so far in 2008 have been satisfactory on all estates - production isabout 20% ahead of the same period in 2007. However, it is too early to forecastwhether this improvement can be sustained for the rest of the year. Bought-incrops in the first two months have been 25% higher than in the same period of2007. The CPO price has risen from $960/mt (CIF Rotterdam) at the start of 2008 toaround $1,160/mt at present. In early March 2008, it reached a brief all timehigh of $1,390/mt. Much of this increase probably reflected speculation byfinancial institutions seeking to diversify from traditional markets or hedgeagainst the dollar and we have now seen some correction. Nevertheless, mostanalysts see underlying demand for traditional food uses, particularly in Chinaand India, remaining strong throughout 2008. In March 2008, Indonesian export taxes on CPO were reformulated to an escalatingscale ranging from 5% on effective Rotterdam CIF prices between $650/mt and $750/mt up to 20% on prices between $1,200/mt and $1,300/mt and 25% over $1,300/mt.This scale effectively caps CIF prices at between $1,000/mt and $1,050/mt. As long as any price reaction from current levels is only modest, in the absenceof any further increase in Indonesian export levies and providing FFB cropsmaintain their improved levels, we can expect a satisfactory increase in profitsand cash flow for 2008. Dividend The board is mindful that the group's development programme represents aconsiderable capital commitment. However, in view of the positive outlook forpalm oil and the recent satisfactory crops, the board is proposing to increasethe annual dividend in respect of 2007 by 30% to 14.0 cts per share from 10.8cts in respect of 2006. Shareholders choosing to receive their dividend insterling will do so at the rate ruling on 8 August, when the register closes. Attoday's exchange rate, the proposed dividend would be equivalent to 7.1p, anincrease of 30% over the 5.46p paid in respect of 2006. CHAN TEIK HUATChairman 29 April 2008 Business Review Commodity prices During 2007 and so far in 2008, there were exceptional increases in vegetableoil prices, including CPO. In 2007, the CPO price opened the year at $570/mt,already a satisfactory level by historic standards, and ended at $960/mt. Theaverage price was $790/mt, compared to $479/mt in 2006. Pricing in vegetable oilmarkets is a complex relationship between competing oils and meals, oil seedproduction in both hemispheres, and now bio-fuels. At its simplest, the increasein the CPO price has been driven by strong demand from traditional food uses,particularly in India and China, expanding acceptance of oleo-chemicals derivedfrom palm oil, and increasing interest in bio-fuels. The effect on domestic cooking oil prices of the sharp increases in CPO priceshas been of concern to the government of Indonesia, where cooking oil is one ofthe basic foodstuffs. In an attempt to limit the effect on local prices, theexport tax on CPO was increased in June 2007 from 1.5% to 6.5% and again inSeptember 2007 to 10%. This rate of tax was adjusted in March 2008 (please referto the Chairman's Statement). While we do not export CPO, this tax is passedback to producers and reduces ex-factory prices directly. Rubber prices averaged $2,100/mt for 2007 (2006 - $1,590/mt); in February 2008,they set a record at $2,860/mt, the previous being $2,750/mt in June 2006. Oursmall area of 409 ha of mature rubber contributed a pre-tax profit of $1.8million in 2007. The newly planted 270 ha of rubber will not be brought intoproduction until 2012. Valuations In 2006, our main valuation assumptions were changed to reflect the improvingoutlook for palm oil and for Indonesia, and also to reflect increasing operatingcosts. These trends continued in 2007 and therefore we have increased the CPOprice assumption from $440/mt to $500/mt; the discount rate is unchanged at 12%.This has had the effect of compensating for expected operating cost increases.As a result, we are valuing our planted Indonesian estates at about $4,630/ha,compared to $4,450/ha at the end of 2006. It should be noted that this is only a'value in use' of the estates to the group on the above assumptions and we feelit is a prudent figure in relation to market values of planted oil palm land inIndonesia. The relatively small BA adjustment in 2007 reflects this smallincrease in estate valuations. Indonesia FFB production from Tasik and Anak Tasik was 178,896mt, 7% higher than 2006.Tasik again surprised with its good performance from ageing palms. The group hasbegun a small amount of under-planting with young palms. However, in view of thecurrent high produce prices, it is the plan to defer the start of fullreplanting until 2010, then to be spread over eight years to 2017. Bought-incrop of 107,000mt at the Tasik mill was 17% below 2006, reflecting very strongcompetition in the vicinity. The oil extraction rate fell to 20.7% from 21.4% in2006. FFB production from the three small estates around Medan was a record at76,000mt, 15% higher than 2006. Bought-in crop at the mill on Blankahan was52,700mt, an increase of 17% on 2006; the oil extraction rate fell to 21.9%compared to 22.6% in 2006. FFB production at Bengkulu, at 170,600mt, was 10% below the previous year. Thisdisappointing output was probably due to the rather hilly terrain of thisproperty where the drought in 2006 might have had a more pronounced adverseeffect. Although crops in the first two months of 2008 have been significantlyhigher than the level in the corresponding period in 2007, it is difficult topredict the output for the rest of the year. Nevertheless, improvements to roadsare being carried out against the normal heavy year end monsoon. Bought-in cropfell only slightly to 117,330mt from 119,690mt, but extraction rates fell backto 20.9% from 21.9% in 2006. The group plans to commence construction in 2008 ofa second 40/60mt/hr oil mill, to be located on one of the outlying estates wherethere will be a saving in transport costs and where there is prospect forbought-in crop from smallholders. Cost is likely to be about $8.5 million. Bina Pitri, a run down estate acquired in 2004, was also affected by thedrought, with crop 7% below expectations at 60,280mt but 29% up on 2006. Thebenefits of the resumption of fertilising and of rehabilitation in 2005/6 arenow beginning to show. The new mill was commissioned in April 2007, achievingextraction rates of 23% before the introduction of bought-in crop, when ratesfell to 21.2%. However, bought-in crop reached 55,390mt, which was almost 50% ofthroughput, a very pleasing result for a new operation. The acquisition cost ofthis estate was $10 million and investment in the mill and rehabilitation hasbeen a further $8 million; the contribution to pre-tax profit in 2007 was $7million. Malaysia Malaysian production, at 39,210mt, was 11% below 2006, due largely to theunusual weather of 2006. This was disappointing after the improvement of 14%achieved in 2006. However, with the favourable CPO prices, the Malaysianproperties recorded a contribution to pre-tax profit of $2.3 million. By the endof 2007, the Malaysian subsidiary had cash of $2.4 million with no externaldebt. This will enable repayment during 2008 of some of the group's investment. Existing development Labuhan Bilik is the most important development. The original area, which wasacquired in December 2004, is now set at 3,700 ha. Negotiation has been ongoingsince 2004 to acquire contiguous areas amounting to 2,280 ha. This provedsuccessful when the group received a formal "right to occupy" in January 2008,making this potentially a 6,000 ha estate. At December 2006, 2,440 ha had beenplanted. It is expected that planting of the entire estate would complete in2009. This is a flat, fertile property which will begin yielding as soon as 2009and is expected to be a very valuable profit earner. The land title over theoriginal 3,700 ha is expected to be issued shortly. Issue of the full title overthe extension of 2,280 ha is likely to take another two years. The other current development is the completion of planting of 1,020 ha atBengkulu, where 360 ha were planted during 2007, leaving 660 ha to complete. Theslow progress has been caused by protracted compensation negotiations withneighbouring villages. It is important these are handled carefully and fairly.When fully planted, these "old" Bengkulu properties will total 15,880 ha. Acquisitions The four acquisitions during 2007 and early 2008 were: 1. Sibolga As explained in the interim statement, in June 2007 the group acquired a 90%interest in PT Cahaya Pelita Andhika (CPA), an Indonesian company operating anestate of 4,470 ha, of which 2,007 ha are planted and mature. In March 2008, CPAwas successful in obtaining re-instatement of rights over 1,300 ha of plantableland, bringing the estate to 5,770 ha. The remaining 10% interest in CPA will beheld by a member of the family of one of our local partners. There is a validHGU land title over the 4,470 ha which expires in 2029 and is renewable forabout another 60 years. The estate is located on the west coast of North Sumatranear the town of Sibolga and about 180km from our nearest existing estate,Tasik. The property was very overgrown but is now being rehabilitated. A nurseryhas been established, from which existing planted areas with low stands will besupplied, as well as providing material for planting up the balance area of3,760 ha. There is no mill but the group plans to commission one of 40/60mt/hrin 2010 at a cost of about $8.6 million. In the meantime, it will be necessaryto transport the crop to Tasik. CPA is not expected to make a materialcontribution to group results until 2010. 2. Bangka In December 2007, the group acquired a 95% interest in PT Bangka Malindo Lestari(BML), an Indonesian company owning the rights to 7,000 ha of vacant land on theisland of Bangka off the south eastern coast of Sumatra. Consideration was $1.5million in cash. In March 2008, the area was re-designated and increased by thelocal authorities to 9,000 ha at a small cost to BML. The balancing 5% interestin BML will be held by the vendor, an Indonesian national whom we have known formany years. Terrain and rainfall are suitable for both oil palm and rubber. Bangka isbecoming an important plantation development area. The estate is well located onthe sheltered coast facing the Sumatran mainland and therefore well placed toship oil direct to mainland refineries. Vegetation is scrub and previouslylogged secondary forest. The area is zoned for agricultural development butcontains small villages to which some land will be allocated for communitydevelopment, as described in the Chairman's Statement. Planting will commence in2009 and should be complete by 2012. Production should commence in 2013. 3. Kalimantan Also in December 2007, the group acquired for a cash consideration of $6.8million a 95% interest in PT Sawit Graha Manunggal (SGM), an Indonesian companyowning the rights to 26,000ha of vacant land in Central Kalimantan, about sixhours' drive north of the south eastern port city of Banjarmasin, just outsidethe district capital of Tamiang Lagang. Access by both road and river is good.The balancing 5% interest in SGM is held by the vendor, an Indonesian nationalwhom we met only through the negotiations. Terrain and rainfall are suitable forboth oil palm and rubber. Again, the area is mainly scrub, the original foresthaving been removed some years ago. The area is zoned for commercialagricultural development, but contains isolated villages for which a portion ofland will be reserved for community projects. Development will commence in 2008.FFB production is likely to commence in 2013 and the area should be fullyplanted by 2013. Kalimantan is already an important plantation region but, asthere are no mills in the vicinity of SGM, it will be necessary to build one by2013/14. It is planned to establish a sizeable rubber estate in either Kalimantan orBangka. 4. Bengkulu II In January 2008, the group acquired for a cash consideration of $3.8 million a95% interest in PT Riau Agrindo Agung (RAA), an Indonesian company owning therights to 15,000ha of vacant land in Bengkulu. The balancing 5% interest in RAAis held by the vendor, who is also the vendor of SGM. The location is about 120kilometres south of the group's existing properties in Bengkulu (the "old"Bengkulu) and 60 kilometres north of the provincial capital, Bengkulu town. Itwill therefore make a natural addition to the group's 15,000 planted hectaresand, in its early years, will have the support of existing nurseries and accessto the group's existing mills. Terrain of this property is hilly, but better than that of the "old" Bengkuluproperties. Soils are good and rainfall is suitable for oil palm. Vegetation isscrub and light secondary forest, the original forest having been removed someyears ago. As for the other properties, the area is zoned for development butcontains villages whose own development needs must be met. Limited planting canbegin in 2008, with significant planting commencing in 2009 for completion by2013 and production commencing in 2013. Conversion of the land rights in Bangka, Kalimantan and Bengkulu to full HGUtitles is likely to take two to three years. Unaudited Consolidated income statement 2007 2006 Result Result before before BA BA BA BA adjust- adjust- adjust- adjust- ment ment Total ment ment Total $000 $000 $000 $000 $000 $000----------------- -------- ------- ------- -------- ------- --------Revenue 127,898 - 127,898 79,094 - 79,094Cost of sales (72,297) - (72,297) (50,089) - (50,089)----------------- -------- ------- ------- -------- ------- --------Gross profit 55,601 - 55,601 29,005 - 29,005Biologicalassetrevaluationmovement (BAadjustment) - 1,001 1,001 - 2,312 2,312Other income 566 - 566 13 - 13Administrationexpenses (3,646) - (3,646) (2,748) - (2,748) -------- ------- ------- -------- ------- --------Operatingprofit 52,521 1,001 53,522 26,270 2,312 28,582Exchangeprofits 215 - 215 368 - 368Finance income 1,800 - 1,800 538 - 538Finance costs (1,945) - (1,945) (448) - (448)----------------- -------- ------- ------- -------- ------- --------Profit beforetax 52,591 1,001 53,592 26,728 2,312 29,040Tax (15,328) (300) (15,628) (8,595) (694) (9,289)----------------- -------- ------- ------- -------- ------- --------Profit for year 37,263 701 37,964 18,133 1,618 19,751----------------- -------- ------- ------- -------- ------- --------Attributable to:- Equity holders of the parent 30,485 515 31,000 15,153 1,321 16,474- Minority interest 6,778 186 6,964 2,980 297 3,277----------------- -------- ------- ------- -------- ------- -------- 37,283 701 37,964 18,133 1,618 19,751----------------- -------- ------- ------- -------- ------- -------- Earnings per share- basic 78.5 cts 41.7 cts- diluted 78.4 cts 41.7 cts Earnings per share before BA adjustment are shown in note 6 Unaudited Consolidated statement of recognised income and expenses 2007 2006 $000 $000 Unrealised surplus on revaluation of the estates 4,823 6,016(Loss)/profit on exchange translation (5,932) 11,718Deferred tax on revaluation (1,186) (3,327) -------- -------- Net income recognised directly in equity (2,295) 14,407 Profit for the year 37,964 19,751------------------------------------ -------- --------Total recognised income and expense for the year 35,669 34,158------------------------------------ -------- -------- Attributable to:- Equity holders of the parent 28,639 28,002- Minority interests 7,030 6,156------------------------------------ -------- -------- 35,669 34,158------------------------------------ -------- -------- Unaudited Consolidated balance sheet 2007 2006 $000 $000Non-current assetsBiological assets 38,580 33,255Property, plant and equipment 148,443 127,568Receivables 1,677 1,337------------------------------------ -------- -------- 188,700 162,160------------------------------------ -------- --------Current assetsInventories 4,910 1,785Tax receivables 1,875 2,684Trade and other receivables 1,462 1,652Cash and cash equivalents 66,358 17,246------------------------------------ -------- -------- 74,605 23,367------------------------------------ -------- --------Current liabilitiesBank loans and other financial liabilities (7,293) (2,167)Trade and other payables (9,311) (5,308)Tax liabilities (8,085) (3,235)------------------------------------ -------- -------- (24,689) (10,710)------------------------------------ -------- --------Net current assets 49,916 12,923------------------------------------ -------- -------- Non-current liabilitiesBank loans and other financial liabilities (35,719) (5,454)Deferred tax liabilities (23,025) (21,152)Retirement benefits - net liabilities (1,534) (834)------------------------------------ -------- --------Net assets 178,338 147,377------------------------------------ -------- -------- EquityShare capital 15,504 15,495Treasury shares (1,785) (1,387)Share premium reserve 23,935 23,904Share capital redemption reserve 1,087 1,087Revaluation and exchange reserve 46 2,407Retained earnings 107,184 80,450------------------------------------ -------- --------Equity attributable to equity holders of the parent 145,971 121,956Minority interests 32,367 25,421------------------------------------ -------- --------Total equity 178,338 147,377------------------------------------ -------- -------- Unaudited Consolidated cash flow statement 2007 2006 $000 $000 Profit before tax 53,592 29,040Adjustments for:BA adjustment (1,001) (2,312)Net (profit)/loss on disposal of current and fixed assetinvestments (518) 158Depreciation 4,264 3,551Share-based remuneration expense 87 20Retirement benefit provisions 700 232Net finance expense/(income) 145 (90)------------------------------------ -------- -------Operating cash flow before changes in working capital 57,269 30,689(Increase)/decrease in inventories (3,125) 714Decrease in trade and other receivables 142 85Increase in trade and other payables 3,600 1,007------------------------------------ -------- -------Cash inflow from operations 57,886 32,405Interest paid (2,051) (541)Overseas tax paid (9,196) (9,321)------------------------------------ -------- -------Net cash flow from operations 46,639 22,543------------------------------------ -------- ------- Investing activitiesAcquisition of subsidiaries (14,480) -Property, plant and equipment- purchase (12,244) (15,370)- sale 94 119Interest received 1,800 538------------------------------------ -------- -------Net cash used in investing activities (24,830) (14,713)------------------------------------ -------- ------- Financing activitiesDividends paid by parent company (4,266) (3,560)Share options exercised 40 50Purchase of own shares for treasury (398) -Repayment of existing long term loans (1,694) (1,645)Drawdown of new long term loan 34,500 3,200Finance lease drawdown/(repayment) 7 (11)Dividends paid to minority shareholders (735) (460)Loan to minority shareholder (578) -Repayment by minority shareholders 286 -Subscriptions to subsidiary share capital by minorityshareholders (1,668) -Receipt from sale of portfolio investment 2,234 267------------------------------------ -------- -------Net cash used in financing activities 27,728 (2,159)------------------------------------ -------- -------Increase in cash and cash equivalents 49,537 5,671 Cash and cash equivalents less overdraftsAt beginning of year 16,823 10,805Foreign exchange (3,003) 347------------------------------------ -------- -------At end of year 63,357 16,823------------------------------------ -------- -------Comprising:Cash at end of year 66,358 17,246Overdraft at end of year (3,001) (423)------------------------------------ -------- ------- 63,357 16,823------------------------------------ -------- ------- Notes to the financial statements 1 Basis of preparation The unaudited financial information included in this announcement has beenextracted from the Consolidated Financial Statements of Anglo-EasternPlantations Plc and its subsidiaries (the group) which have been prepared inaccordance with International Financial Reporting Standards, as adopted by theEuropean Union ("adopted IFRS"), and those parts of the Companies Act 1985applicable to companies reporting under adopted IFRS. 2 Accounting Policies The accounting policies adopted in the preparation of the Consolidated FinancialStatements for the year to 31 December 2007 are consistent with those followedin the preparation of the Annual Report and Financial Statements for the yearended 31 December 2006 and have been applied consistently throughout the groupfor the purposes of the Consolidated Financial Statements for the years ended 31December 2007 and 31 December 2006. 3 Nature of financial information The financial information contained in this preliminary announcement does notconstitute the company's consolidated statutory financial statements for theyears ended 31 December 2007 or 2006, but is derived from those financialstatements. The financial statements for the year ended 31 December 2007 areunaudited. The financial statements for the year ended 31 December 2006 havebeen delivered to the Registrar of Companies. The auditors report on thefinancial statements for the year ended 31 December 2006 was unqualified, didnot contain any emphasis of matter paragraphs, and did not contain statementsunder section 237 (2) or (3) of the Companies Act 1985. 4 Exchange rates 2007 2006 Year end Rp : $ 9,419 9,020 $ : £ 1.99 1.96 RM : $ 3.31 3.53Average Rp : $ 9,170 9,141 $ : £ 2.01 1.86 RM : $ 3.43 3.66 5 Tax 2007 2006 $000 $000 Foreign corporation tax - current year 14,356 7,794Foreign withholding tax on remittances 499 590Deferred tax adjustment - current year 773 905 -------- --------Total tax charge for year 15,628 9,289 -------- -------- 6 Earnings per ordinary share (EPS) 2007 2006 Number of Number of shares shares '000 '000Weighted average number of shares in issue in year- used in basic EPS 39,480 39,478- dilutive effect of outstanding employee share options 65 55 -------- --------- used in diluted EPS 39,545 39,533 -------- -------- 2007 2006 US$ US$ Basic earnings per share before BA adjustment: 77.2 cts 38.3 cts Basic earnings per share 78.5 cts 41.7 cts There is no significant difference between basic and diluted EPS. 7 Dividend 2007 2006 2007 2006 $000 $000Paid during the year 10.8 cts 8.8 cts 4,266 3,560Proposed final dividend in respect ofthe year ended 31 December 14.0 cts 10.8 cts 5,524 4,265 The proposed dividend for 2007 is subject to shareholder approval at theforthcoming annual general meeting and has not been included as a liability.Assuming shareholder approval, the proposed dividend will be paid on 9 September2008 to shareholders on the register on 8 August 2008. 8 Crops 2006 2006 Tonnes TonnesOil palm fresh fruit bunches - all estates 528,862 513,902- bought-in or processed for third parties 332,887 294,647- mill throughput 813,063 717,888Saleable CPO 170,936 156,285Saleable palm kernels 40,734 36,596Rubber 1,060 1,088Cocoa - 46 9 Areas Planted Reserves Total Mature Immature Plantable Unplantable ha ha ha ha haPlanted oil palm 37,979 30,912 7,067Planted rubber 679 409 270 -------- -------- --------- 38,658 31,321 7,337Reserves 44,264 29,997 14,267 -------- -------- --------- --------- ---------Total 31 Dec 2007 82,922 31,321 7,337 29,997 14,267Acquired 2008 18,679 - - 14,179 4,500 -------- -------- --------- --------- ---------Total April 2008 101,601 31,321 7,337 44,176 18,767 -------- -------- --------- --------- ---------Potential plantable 82,834 --------------------- This information is provided by RNS The company news service from the London Stock Exchange