Last checked at 27 Aug 2015 13:00
Anglo-Eastern Plantations Plc
("AEP", "Group" or "Company")
Announcement of interim results for six months ended 30 June 2015
Anglo-Eastern Plantations Plc, and its subsidiaries are a major producer of palm oil and rubber with plantations across Indonesia and Malaysia amounting to some 128,000 hectares, has today released its results for the six months ended 30 June 2015.
Financial Highlights
20146 monthsto 30 June$ m (unaudited) | 20146 monthsto 30 June$ m (unaudited & restated) | 201412 monthsto 31 Dec$ m (audited) | |||
Revenue | 104.0 | 130.0 | 251.3 | ||
Profit before tax | |||||
- before biological asset ("BA") adjustment | 22.0 | 43.2 | 85.0 | ||
- after BA adjustment | 5.0 | 66.3 | 51.2 | ||
EPS, after BA adjustment | 5.91cts | 103.66cts | 77.61cts | ||
Total Net Assets | 481.8 | 552.0 | 518.0 |
Enquiries:
Anglo-Eastern Plantations Plc | |
Dato' John Lim Ewe Chuan | 020 7216 4621 |
Charles Stanley Securities | |
Russell Cook / Karri Vuori | 020 7149 6000 |
Chairman's Interim Statement
I am pleased to present the interim results for the Group for the six months to 30 June 2015.
Following a significant decline in Crude Palm Oil ("CPO") prices in the first half, revenue for the six months to 30 June was $104.0 million compared to $130.0 million for the first six months of 2014. At the same time the Group was subject to an increase in operating expenses which has resulted in a gross profit of $25.0 million compared to $45.1 million in the six months to June 2014. Overall profits before tax, excluding the adjustment arising from a revaluation of the Group's Biological Asset ("BA adjustment"), fell from $43.2 million to $22.0 million for the period.
Fresh Fruit Bunches ("FFB") production for the first half of 2015 was 1% lower at 388,600mt compared to the same period last year. The slight decline in production was mainly attributed to the replanting of old palms and time taken for crop harvest to return to normal after the effects of the flood in North Sumatera in December last year. The Group continued to buy external crops to maximise the utilization of its mills. The Group has maintained a competitive pricing policy for bought-in crops, which increased by 9% from 310,900mt for last year to 338,400mt.
Operational and financial performance
For the six months ended 30 June 2015, revenue was $104.0 million, a decrease of 20% (1H 2014: $130.0 million). Gross margins for the period dropped from 35% to 24% reflecting higher operating expenses and a 26% decrease in average CPO price in the first half of 2015 compared to the same period in the previous year. In the same period, Indonesian Rupiah weakened by 11% against the US Dollar.
During the first six months of 2015 the CPO price averaged at $663/mt, 26% lower compared to $895/mt for first half of 2014.
The CPO price for the first half remained weak. The current CPO price stayed around $515/mt which was far lower than the 10-year average CPO price at $750/mt. As a result the directors have benchmarked the 10-year average CPO price assumptions against market expectations and have adopted the CPO price of $650/mt of biological assets to represent a more sustainable CPO price over the long term. This is supported by the World Bank Commodities Price Forecast for palm oil for 2015 at $670/mt. This has resulted in a negative adjustment of $17.0 million from the BA adjustment (1H 2014: positive $23.1 million). The operating profit after BA adjustment for the period fell to $4.6 million (1H 2014: $63.9 million) while profit before tax was $5.0 million compared to the $66.3 million achieved for the same period in 2014.
The resulting earnings per share for the period were reduced 94% at 5.91cts (1H 2014: 103.66cts).
The Group's balance sheet remains strong and cash flow remains healthy. Net assets at 30 June 2015 were $481.8 million compared to $518.0 million at 31 December 2014. The decline was attributable largely to the adjustment in value of the Biological Assets and a weaker Rupiah.
As at 30 June 2015 the Group's total cash balance was $110.9 million (1H 2014: $115.8 million) with total borrowings of $34.8 million (1H 2014: $35.0 million), giving a net cash position of $76.1 million, compared to $80.8 million as at 30 June 2014.
With the current low CPO prices, the five subsidiaries with over 11,100ha of newly matured oil palms, out of 17,300ha planted in Bengkulu, Bangka and Kalimantan are expected to be profitable in about three to four years when the FFB yield reach the optimum level. The decline in cash reflects the need to sustain and finance the loss making subsidiaries as the yield of newly matured plantations catches up with operating expenses.
Operating costs
The operating costs for the Indonesian operations were higher in the first half of 2015 compared to the same period in 2014 mainly due to an increase in wages, fertilisers, fuel and general upkeep of plantations costs. Higher operating costs are also partly attributed to a 9% increase in matured areas for the corresponding period.
Production and Sales | |||
2015 | 2014 | 2014 | |
6 months | 6 months | Year | |
to 30 June | to 30 June | to 31 December | |
mt | mt | mt | |
Oil palm production | |||
FFB | |||
- all estates | 388,600 | 393,900 | 857,400 |
- bought-in or processed for third parties | 338,400 | 310,900 | 626,200 |
Saleable CPO | 141,300 | 141,700 | 294,100 |
Saleable palm kernels | 33,500 | 33,100 | 68,300 |
Oil palm sales | |||
CPO | 144,900 | 145,000 | 299,400 |
Palm kernels | 34,200 | 31,600 | 68,300 |
FFB sold outside | 50,000 | 37,300 | 101,100 |
Rubber production | 457 | 480 | 1,140 |
The palm oil mill in Kalimantan with an initial capacity of 45mt/hr has started commercial operations in June 2015. The Group's six mills processed a total of 677,000mt in FFB for the first half of 2015, a 1% increase compared to 667,500mt for the same period last year.
Bought-in crops were 9% higher than last year due to competitive pricing offered to FFB suppliers.
Significant capital expenditure is expected in the replanting of over 1,400ha of old palms in North Sumatera which started in May 2015. Additional capital is required to replant 153ha of old rubber trees with oil palm. The felling of old rubber trees in North Sumatera began in June 2015.
Commodity prices
CPO price was fairly weak for the first half of 2015 and hit a low of $610/mt in January 2015. The average CPO price for was $663/mt, 26% lower than last year (1H 2014: $895/mt). The lower CPO price was attributed to China's weak growth, abundance of vegetable oil and the low crude oil prices which dampen the demand for bio-diesel.
Rubber price averaged $1,388/mt, 24% lower than 2014 (1H 2014: $1,823/mt).
Development
The Group's planted areas at 30 June 2015 comprised:
Total | Mature | Immature | |
ha | ha | ha | |
North Sumatera | 19,228 | 17,333 | 1,895 |
Bengkulu | 18,970 | 18,408 | 562 |
Riau | 4,873 | 4,873 | - |
South Sumatera | 3,983 | 1,086 | 2,897 |
Kalimantan | 12,488 | 7,840 | 4,648 |
Bangka | 514 | - | 514 |
Plasma | 734 | 685 | 49 |
Indonesia | 60,790 | 50,225 | 10,565 |
Malaysia | 3,696 | 3,380 | 316 |
Total : 30 June 2015 | 64,486 | 53,605 | 10,881 |
Total : 31 December 2014 | 63,470 | 48,127 | 15,343 |
Total : 30 June 2014 | 62,037 | 48,991 | 13,046 |
The Group's new planting for the first six months ended 30 June 2015 totalled 1,016ha compared to 941ha for same corresponding period for 2014. The slower than anticipated rate of new planting is due to protracted land compensation negotiations.
The Group remains optimistic that planting will pick up in the second half of 2015. The Group's total landholding comprises some 128,000ha, of which the planted area stands around 64,486ha (1H 2014: 62,037ha).
Dividend
As in previous years no interim dividend has been declared. A final dividend of 3.0 pence per share in respect of the year to 31 December 2014 was paid on 10 July 2015.
Outlook
The Australian Bureau of Meteorology has confirmed the resurgence of a moderate to strong El Nino weather phenomenon for 2015. This was supported by other weather authorities in the United States and Japan. The outcome of El Nino, which last occurred in 2009 to 2010, is expected to be droughts in parts of palm oil producing countries like Indonesia and Malaysia. These two countries are the world's biggest palm oil producers, accounting for 86% of global palm oil supplies. According to reports, El Nino is likely to hit and lower CPO output by at least 15% to 30% in the next 12 to 24 months. But the seasonal high production in the second half of 2015 is however likely to keep the upside of CPO prices but analysts viewed the advent of El Nino to serve as a catalyst to CPO prices.
The introduction of an export levy tax of $50/mt on CPO by the Indonesian Government and a simpler export tax system expressed in US dollar instead of a percentage of CPO price means that when the CPO price is below $750/mt, the export tax levy will impact upon the Group's profit. Nevertheless when CPO price recovers to above $750/mt, the effective export tax rate will be lower providing some relief to planters. The new export tax took effect from July 2015.
The Board looks forward to reporting further progress in its next Interim Management Statement.
Principal risks and uncertainties
With the downward trend of CPO prices and the continuing weakening of the Indonesian Rupiah, the directors view the second half of the year to be challenging. Other than these, the principal risks and uncertainties have broadly remained the same since the publication of the annual report for the year ended 31 December 2014.
A more detailed explanation of the risks relevant to the Group is on pages 19 to 22 and from pages 80 to 84 of the 2014 annual report which is available at www.angloeastern.co.uk.
Madam Lim Siew Kim
Chairman
27 August 2015
Responsibility Statements
We confirm that to the best of our knowledge:
a) The unaudited interim financial statements have been prepared in accordance with IAS34: Interim Financial Reporting as adopted by the European Union;
b) The Chairman's statement includes a fair review of the information required by DTR 4.2.7R (an indication of important events during the first six months and a description of the principal risks and uncertainties for the remaining six months of the year); and
c) The interim financial statements include a fair review of the information required by DTR 4.2.8R (material related party transactions in the six months ended 30 June 2015 and any material changes in the related party transactions described in the last Annual Report) of the Disclosure and Transparency Rules of the United Kingdom Financial Services Authority.
By order of the Board
Dato' John Lim Ewe Chuan
27 August 2015
Condensed Consolidated Income Statement
2015 6 months to 30 June (unaudited) |
2014 6 months to 30 June (unaudited) |
2014 Year to 31 December (audited) | ||||||||
Continuing operations
| Notes
| Result before BA adjustment$000 | BA adjustment$000 | Total$000 | Result before BA adjustment$000 | BA adjustment$000 | Total$000 | Result before BA adjustment$000 | BA adjustment$000 | Total$000 |
Revenue | 103,952 | - | 103,952 | 130,006 | - | 130,006 | 251,258 | - | 251,258 | |
Cost of sales | (78,924) | - | (78,924) | (84,892) | - | (84,892) | (164,666) | - | (164,666) | |
Gross profit | 25,028 | - | 25,028 | 45,114 | - | 45,114 | 86,592 | - | 86,592 | |
Biological asset revaluation movement (BA adjustment) | - | (16,958) | (16,958) | - | 23,103 | 23,103 | - | (33,718) | (33,718) | |
Administration expenses | (3,478) | - | (3,478) | (4,300) | - | (4,300) | (7,747) | - | (7,747) | |
Operating profit | 21,550 | (16,958) | 4,592 | 40,814 | 23,103 | 63,917 | 78,845 | (33,718) | 45,127 | |
Exchange (losses) / gains | (1,800) | - | (1,800) | 413 | - | 413 | 852 | - | 852 | |
Finance income | 3,238 | - | 3,238 | 2,942 | - | 2,942 | 7,276 | - | 7,276 | |
Finance expense | 3 | (1,004) | - | (1,004) | (1,003) | - | (1,003) | (2,019) | - | (2,019) |
Profit before tax | 4 | 21,984 | (16,958) | 5,026 | 43,166 | 23,103 | 66,269 | 84,954 | (33,718) | 51,236 |
Tax expense | 5 | (6,084) | 4,240 | (1,844) | (11,918) | (5,776) | (17,694) | (20,967) | 8,429 | (12,538) |
Profit for the period | 15,900 | (12,718) | 3,182 | 31,248 | 17,327 | 48,575 | 63,987 | (25,289) | 38,698 | |
Attributable to: | ||||||||||
- Owners of the parent | 12,805 | (10,463) | 2,342 | 25,879 | 15,209 | 41,088 | 52,422 | (21,660) | 30,762 | |
- Non-controlling interests | 3,095 | (2,255) | 840 | 5,369 | 2,118 | 7,487 | 11,565 | (3,629) | 7,936 | |
15,900 | (12,718) | 3,182 | 31,248 | 17,327 | 48,575 | 63,987 | (25,289) | 38,698 | ||
Earnings per share for profit attributable to the owners of the parent during the period |
|
|
| |||||||
- basic | 7 | 5.91cts | 103.66cts | 77.61cts | ||||||
- diluted | 7 | 5.90cts | 103.54cts | 77.53cts | ||||||
Condensed Consolidated Statement of Comprehensive Income
2015 |
2014 | 2014 | ||
6 months | 6 months | Year | ||
to 30 June | to 30 June | to 31 December | ||
(unaudited) | (unaudited) | (audited) | ||
$000 | $000 | $000 | ||
Profit for the period | 3,182 | 48,575 | 38,698 | |
Other comprehensive income | ||||
Items may be reclassified to profit or loss in subsequent periods: | ||||
(Loss) / Profit on exchange translation of foreign operations | (36,914) | 12,403 | (12,019) | |
Net other comprehensive (expense) / income may be reclassified to profit or loss in subsequent periods | (36,914) | 12,403 | (12,019) | |
Items not to be reclassified to profit or loss in subsequent periods: | ||||
Unrealised (loss) / gain on revaluation of the estates | (860) | (704) | 386 | |
Deferred tax on revaluation | 215 | 177 | (96) | |
Remeasurements of retirement benefit plan | - | - | (680) | |
Deferred tax on retirement benefit | - | - | 170 | |
Net other comprehensive expense not being reclassified to profit or loss in subsequent periods | (645) | (527) | (220) | |
Total other comprehensive (expense) / income for the period, net of tax | (37,559) | 11,876 | (12,239) | |
Total comprehensive (expense) / income for the period | (34,377) | 60,451 | 26,459 | |
Attributable to: | ||||
- Owners of the parent | (28,328) | 50,718 | 21,188 | |
- Non-controlling interests | (6,049) | 9,733 | 5,271 | |
(34,377) | 60,451 | 26,459 |
Condensed Consolidated Statement of Financial Position
2015 |
2014 |
2014 | ||
as at 30 June | as at 30 June | as at 31 December | ||
Notes | (unaudited) | (unaudited) | (audited) | |
$000 | $000 | $000 | ||
Non-current assets | ||||
Biological assets | 225,728 | 304,156 | 251,374 | |
Property, plant and equipment | 217,241 | 224,030 | 227,380 | |
Receivables | 3,044 | 5,857 | 3,007 | |
446,013 | 534,043 | 481,761 | ||
Current assets | ||||
Inventories | 8,248 | 9,817 | 7,846 | |
Tax receivables | 11,158 | 9,333 | 9,231 | |
Trade and other receivables | 8,153 | 10,261 | 8,807 | |
Cash and cash equivalents | 110,860 | 115,831 | 125,937 | |
138,419 | 145,242 | 151,821 | ||
Current liabilities | ||||
Loans and borrowings | (438) | (196) | (313) | |
Trade and other payables | (22,660) | (18,990) | (21,010) | |
Tax liabilities | (3,764) | (7,845) | (10,752) | |
Dividend payables | (1,869) | (20) | (20) | |
(28,731) | (27,051) | (32,095) | ||
Net current assets | 109,688 | 118,191 | 119,726 | |
Non-current liabilities | ||||
Loans and borrowings | (34,375) | (34,813) | (34,625) | |
Deferred tax liabilities | (34,929) | (61,787) | (44,368) | |
Retirement benefits - net liabilities | (4,623) | (3,593) | (4,445) | |
(73,927) | (100,193) | (83,438) | ||
Net assets | 481,774 | 552,041 | 518,049 | |
Condensed Consolidated Statement of Financial Position (continued)
2015 |
2014 |
2014 | ||
as at 30 June | as at 30 June | as at 31 December | ||
Notes | (unaudited) | (unaudited) | (audited) | |
$000 | $000 | $000 | ||
Issued capital and reserves attributable to owners of the parent | ||||
Share capital | 15,504 | 15,504 | 15,504 | |
Treasury shares | (1,171) | (1,171) | (1,171) | |
Share premium reserve | 23,935 | 23,935 | 23,935 | |
Share capital redemption reserve | 1,087 | 1,087 | 1,087 | |
Revaluation reserves | 56,468 | 56,297 | 57,029 | |
Exchange reserves | (220,612) | (171,007) | (190,503) | |
Retained earnings | 521,828 | 532,121 | 521,355 | |
397,039 | 456,766 | 427,236 | ||
Non-controlling interests | 84,735 | 95,275 | 90,813 | |
Total equity | 481,774 | 552,041 | 518,049 |
Condensed Consolidated Statement of Changes in Equity
Attributable to owners of the parent |
| ||||||||||
Share capital |
Treasury shares |
Share premium | Share capital redemption reserve |
Revaluation reserve |
Foreign exchange reserve |
Retained earnings |
Total |
Non-controlling interests |
Total equity |
| |
$000 | $000 | $000 | $000 | $000 | $000 | $000 | $000 | $000 | $000 |
| |
| |||||||||||
Balance at 31 December 2013 | 15,504 | (1,171) | 23,935 | 1,087 | 56,767 | (181,107) | 493,031 | 408,046 | 85,964 | 494,010 | |
Items of other comprehensive income | |||||||||||
-Unrealised gain on revaluation of estates, net of tax |
- |
- |
- |
- |
262 |
- |
- |
262 |
28 |
290 | |
-Remeasurement of retirement benefit plan, net of tax |
- |
- |
- |
- |
- |
- |
(440) |
(440) |
(70) |
(510) | |
-Loss on exchange translation of foreign operations |
- |
- |
- |
- |
- |
(9,396) |
- |
(9,396) |
(2,623) |
(12,019) | |
Total other comprehensive income / (expenses) |
- |
- |
- |
- |
262 |
(9,396) |
(440) |
(9,574) |
(2,665) |
(12,239) | |
Profit for year | - | - | - | - | - | - | 30,762 | 30,762 | 7,936 | 38,698 | |
Total comprehensive income and expenses for the year |
- |
- |
- |
- |
262 |
(9,396) |
30,322 |
21,188 |
5,271 |
26,459 | |
Dividends paid | - | - | - | - | - | - | (1,998) | (1,998) | (422) | (2,420) | |
Balance at 31 December 2014 | 15,504 | (1,171) | 23,935 | 1,087 | 57,029 | (190,503) | 521,355 | 427,236 | 90,813 | 518,049 | |
Items of other comprehensive income | |||||||||||
-Unrealised loss on revaluation of estates, net of tax | - | - | - | - | (561) | - | - | (561) | (84) | (645) | |
-Loss on exchange translation of foreign operations | - | - | - | - | - | (30,109) | - | (30,109) | (6,805) | (36,914) | |
Total other comprehensive expenses | - | - | - | - | (561) | (30,109) | - | (30,670) | (6,889) | (37,559) | |
Profit for period | - | - | - | - | - | - | 2,342 | 2,342 | 840 | 3,182 | |
Total comprehensive income and expenses for the period | - | - | - | - | (561) | (30,109) | 2,342 | (28,328) | (6,049) | (34,377) | |
Dividend payable | - | - | - | - | - | - | (1,869) | (1,869) | (29) | (1,898) | |
Balance at 30 June 2015 | 15,504 | (1,171) | 23,935 | 1,087 | 56,468 | (220,612) | 521,828 | 397,039 | 84,735 | 481,774 | |
Condensed Consolidated Statement of Changes in Equity (continued)
Attributable to owners of the parent | ||||||||||
Share capital |
Treasury shares |
Share premium | Share capital redemption reserve |
Revaluation reserve |
Foreign exchange reserve |
Retained earnings |
Total |
Non-controlling interests |
Total Equity | |
$000 | $000 | $000 | $000 | $000 | $000 | $000 | $000 | $000 | $000 | |
Balance at 31 December 2013 | 15,504 | (1,171) | 23,935 | 1,087 | 56,767 | (181,107) | 493,031 | 408,046 | 85,964 | 494,010 |
Items of other comprehensive income | ||||||||||
-Unrealised loss on revaluation of estates, net of tax | - | - | - | - | (470) | - | - | (470) | (57) | (527) |
-Gain on exchange translation of foreign operations | - | - | - | - | - | 10,100 | - | 10,100 | 2,303 | 12,403 |
Total other comprehensive (expenses) / income | - | - | - | - | (470) | 10,100 | - | 9,630 | 2,246 | 11,876 |
Profit for period | - | - | - | - | - | - | 41,088 | 41,088 | 7,487 | 48,575 |
Total comprehensive income and expenses for the period | - | - | - | - | (470) | 10,100 | 41,088 | 50,718 | 9,733 | 60,451 |
Dividends paid | - | - | - | - | - | - | (1,998) | (1,998) | (422) | (2,420) |
Balance at 30 June 2014 | 15,504 | (1,171) | 23,935 | 1,087 | 56,297 | (171,007) | 532,121 | 456,766 | 95,275 | 552,041 |
Condensed Consolidated Statement of Cash Flows
2015 |
2014 | 2014 |
| |
6 months | 6 months | Year |
| |
to 30 June | to 30 June | to 31 December |
| |
(unaudited) | (unaudited) | (audited) |
| |
$000 | $000 | $000 |
| |
Cash flows from operating activities | ||||
Profit before tax | 5,026 | 66,269 | 51,236 | |
Adjustments for: | ||||
BA adjustment | 16,958 | (23,103) | 33,718 | |
Loss on disposal of tangible fixed assets | 41 | 2 | 36 | |
Depreciation | 3,407 | 3,107 | 6,833 | |
Retirement benefit provisions | 494 | 418 | 951 | |
Net finance income | (2,234) | (1,939) | (5,257) | |
Unrealised loss / (gain) in foreign exchange | 1,800 | (413) | (852) | |
Tangible fixed assets written off | 86 | 6 | 135 | |
Operating cash flow before changes in working capital | 25,578 | 44,347 | 86,800 | |
(Increase) / Decrease in inventories | (959) | (1,145) | 451 | |
Decrease / (Increase) in trade and other receivables | 971 | (3,628) | 664 | |
Increase in trade and other payables | 2,999 | 3,312 | 5,929 | |
Cash inflow from operations | 28,589 | 42,886 | 93,844 | |
Interest paid | (1,004) | (1,003) | (2,019) | |
Retirement benefit paid | (1) | (6) | (61) | |
Overseas tax paid | (17,259) | (10,309) | (17,756) | |
Net cash flow from operations | 10,325 | 31,568 | 74,008 | |
Investing activities | ||||
Property, plant and equipment | ||||
- purchase | (19,602) | (17,589) | (49,754) | |
- sale | 19 | 34 | 156 | |
Interest received | 3,238 | 2,942 | 7,276 | |
Net cash used in investing activities | (16,345) | (14,613) | (42,322) | |
Condensed Consolidated Statement of Cash Flows (continued)
2015 | 2014 |
2014 | |
6 months | 6 months | Year | |
to 30 June | to 30 June | to 31 December | |
(unaudited) | (unaudited) | (audited) | |
$000 | $000 | $000 | |
Financing activities | |||
Dividends paid by Company | - | (1,998) | (1,998) |
Finance lease repayment | - | (12) | (20) |
Dividends paid to non-controlling interests | (46) | (398) |
(402) |
Repayment of existing long term loans | (125) | - | (63) |
Net cash used in financing activities | (171) | (2,408) | (2,483) |
(Decrease) / Increase in cash and cash equivalents | (6,191) | 14,547 | 29,203 |
Cash and cash equivalents | |||
At beginning of period | 125,937 | 98,738 | 98,738 |
Foreign exchange | (8,886) | 2,546 | (2,004) |
At end of period | 110,860 | 115,831 | 125,937 |
Comprising: | |||
Cash at end of period | 110,860 | 115,831 | 125,937 |
Notes to the interim statements
1. Basis of preparation of interim financial statements
These interim consolidated financial statements have been prepared in accordance with IAS 34, "Interim Financial Reporting", as adopted by the European Union. They do not include all disclosures that would otherwise be required in a complete set of financial statements and should be read in conjunction with the 2014 Annual Report. The financial information for the half years ended 30 June 2015 and 30 June 2014 does not constitute statutory accounts within the meaning of Section 434(3) of the Companies Act 2006 and has been neither audited nor reviewed pursuant to guidance issued by the Auditing Practices Board.
Basis of preparation
The annual financial statements of Anglo-Eastern Plantations Plc are prepared in accordance with IFRSs as adopted by the European Union. The comparative financial information for the year ended 31 December 2014 included within this report does not constitute the full statutory accounts for that period. The statutory Annual Report and Financial Statements for 2014 have been filed with the Registrar of Companies. The Independent Auditors' Report on the Annual Report and Financial Statements for 2014 was unqualified, did not draw attention to any matters by way of emphasis, and did not contain a statement under 498(2) or 498(3) of the Companies Act 2006.
Changes in accounting standards
The same accounting policies, presentation and methods of computation are followed in these condensed consolidated financial statements as were applied in the Group's latest annual audited financial statements.
After making enquiries, the directors have a reasonable expectation that the Company and the Group have adequate resources to continue operations for the foreseeable future. For this reason, they continue to adopt the going concern basis in preparing the financial statements.
2. Foreign exchange
2015 | 2014 | 2014 | ||
6 months | 6 months | Year | ||
to 30 June | to 30 June | to 31 December | ||
(unaudited) | (unaudited) | (audited) | ||
Average exchange rates | ||||
Rp : $ | 12,968 | 11,725 | 11,861 | |
$ : £ | 1.52 | 1.67 | 1.65 | |
RM : $ | 3.64 | 3.27 | 3.27 | |
Closing exchange rates | ||||
Rp : $ | 13,332 | 11,855 | 12,385 | |
$ : £ | 1.57 | 1.71 | 1.56 | |
RM : $ | 3.78 | 3.21 | 3.50 |
3. Finance costs
2015 | 2014 | 2014 | ||
6 months | 6 months | Year | ||
to 30 June | to 30 June | to 31 December | ||
(unaudited) | (unaudited) | (audited) | ||
$000 | $000 | $000 | ||
Payable | 1,004 | 1,003 | 2,019 |
4. Segment information
North Sumatera | Bengkulu | South Sumatera | Riau | Bangka | Kalimantan | Total Indonesia | Malaysia | UK | Total | |
$000 | $000 | $000 | $000 | $000 | $000 | $000 | $000 | $000 | $000 | |
6 months to 30 June 2015 (unaudited) | ||||||||||
Total sales revenue (all external) | 37,526 | 38,458 | 38 | 21,377 | - | 3,615 | 101,014 | 1,691 | - | 102,705 |
Other income | 553 | 302 | 2 | 362 | - | - | 1,219 | 28 | - | 1,247 |
Total revenue | 38,079 | 38,760 | 40 | 21,739 | - | 3,615 | 102,233 | 1,719 | - | 103,952 |
Profit / (loss) before tax | 9,691 | 8,607 | (517) | 8,290 | (11) | (3,700) | 22,360 | (66) | (310) | 21,984 |
BA Movement | (16,958) | |||||||||
Profit for the period before tax per | ||||||||||
consolidated income statement | 5,026 | |||||||||
Depreciation | (1,165) | (1,087) | (182) | (270) | (12) | (585) | (3,301) | (106) | - | (3,407) |
Inter-segment transactions | 1,835 | (1,078) | (380) | (310) | - | (619) | (552) | 522 | 30 | - |
Income tax | (2,751) | (299) | 553 | (1,563) | (24) | 2,581 | (1,503) | (316) | (25) | (1,844) |
Total Assets | 187,402 | 141,718 | 55,931 | 71,733 | 12,774 | 87,273 | 556,831 | 23,186 | 4,415 | 584,432 |
Non-Current Assets | 136,701 | 107,573 | 54,404 | 34,508 | 12,614 | 81,321 | 427,121 | 17,699 | 1,193 | 446,013 |
Non-Current Assets - Additions | 3,522 | 1,348 | 1,812 | 584 | 646 | 11,589 | 19,501 | 101 | - | 19,602 |
6 months to 30 June 2014 (unaudited) | ||||||||||
Total sales revenue (all external) | 48,753 | 53,335 | 38 | 21,787 | - | 3,002 | 126,915 | 2,215 | - | 129,130 |
Other income | 283 | 373 | - | 220 | - | - | 876 | - | - | 876 |
Total revenue | 49,036 | 53,708 | 38 | 22,007 | - | 3,002 | 127,791 | 2,215 | - | 130,006 |
Profit / (loss) before tax | 17,056 | 18,182 | (167) | 8,848 | (21) | (728) | 43,170 | 531 | (535) | 43,166 |
BA Movement | 23,103 | |||||||||
Profit for the period before tax per | ||||||||||
consolidated income statement | 66,269 | |||||||||
Depreciation | (1,092) | (1,045) | (203) | (272) | (16) | (354) | (2,982) | (125) | - | (3,107) |
Inter-segment transactions | 2,806 | (1,704) | (197) | (490) | - | (921) | (506) | 476 | 30 | - |
Income tax | (7,289) | (3,722) | (1,581) | (2,095) | (7) | (2,653) | (17,347) | (66) | (281) | (17,694) |
Total Assets | 214,804 | 155,588 | 70,765 | 80,644 | 13,283 | 109,770 | 644,854 | 29,996 | 4,435 | 679,285 |
Non-Current Assets | 165,229 | 126,071 | 68,839 | 39,477 | 13,193 | 97,695 | 510,504 | 22,346 | 1,193 | 534,043 |
Non-Current Assets - Additions | 3,298 | 1,615 | 2,466 | 605 | 420 | 9,138 | 17,542 | 47 | - | 17,589 |
North Sumatera | Bengkulu | South Sumatera | Riau | Bangka | Kalimantan | Total Indonesia | Malaysia | UK | Total | |
$000 | $000 | $000 | $000 | $000 | $000 | $000 | $000 | $000 | $000 | |
Year to 31 December 2014 (audited) | ||||||||||
Total sales revenue (all external) | 97,135 | 95,886 | 102 | 44,912 | - | 7,416 | 245,451 | 4,253 | - | 249,704 |
Other income | 813 | 697 | 3 | 37 | - | 2 | 1,552 | 2 | - | 1,554 |
Total revenue | 97,948 | 96,583 | 105 | 44,949 | - | 7,418 | 247,003 | 4,255 | - | 251,258 |
Profit / (loss) before tax | 36,631 | 30,795 | (552) | 19,477 | (57) | (1,226) | 85,068 | 255 | (369) | 84,954 |
BA Movement | (33,718) | |||||||||
Profit for the period before tax per | ||||||||||
consolidated income statement | 51,236 | |||||||||
Depreciation | (2,385) | (2,228) | (411) | (572) | (33) | (958) | (6,587) | (246) | - | (6,833) |
Inter-segment transactions | 3,446 | (2,331) | (257) | (671) | - | (1,443) | (1,256) | 962 | 294 | - |
Income tax | (8,731) | (5,775) | 1,968 | (4,589) | 171 | 4,268 | (12,688) | 437 | (287) | (12,538) |
Total Assets | 202,284 | 153,418 | 58,008 | 84,263 | 13,078 | 92,854 | 603,905 | 25,398 | 4,279 | 633,582 |
Non-Current Assets | 149,187 | 121,171 | 56,539 | 39,756 | 12,845 | 82,236 | 461,734 | 18,834 | 1,193 | 481,761 |
Non-Current Assets - Additions | 10,214 | 4,845 | 5,492 | 1,224 | 930 | 26,932 | 49,637 | 117 | - | 49,754 |
In the 6 months to 30 June 2015, revenues from 4 customers of the Indonesian segment represent approximately $61.4m of the Group's total revenues. In year 2014, revenues from 4 customers of the Indonesian segment represent approximately $152.1m of the Group's total revenues. An analysis of these revenues is provided below:
2015 | 2014 | 2014 | ||||
6 months | 6 months | Year | ||||
to 30 June | to 30 June | to 31 December | ||||
(unaudited) | (unaudited) | (audited) | ||||
$m | % | $m | % | $m | % | |
Major Customers | ||||||
Customer 1 | 19.7 | 18.9 | 28.9 | 22.2 | 47.9 | 19.1 |
Customer 2 | 16.9 | 16.2 | 21.3 | 16.4 | 45.5 | 18.1 |
Customer 3 | 14.7 | 14.2 | 19.6 | 15.2 | 33.5 | 13.3 |
Customer 4 | 10.1 | 9.7 | 17.9 | 13.7 | 25.2 | 10.1 |
Total | 61.4 | 59.0 | 87.7 | 67.5 | 152.1 | 60.6 |
5. Tax
2015 | 2014 | 2014 | ||
6 months | 6 months | Year | ||
to 30 June | to 30 June | to 31 December | ||
(unaudited) | (unaudited) | (audited) | ||
$000 | $000 | $000 | ||
Foreign corporation tax - current year | 8,155 | 12,415 | 22,855 | |
Foreign corporation tax - prior year | - | - | 32 | |
Deferred tax adjustment - current year | (6,311) | 5,279 | (10,402) | |
Deferred tax adjustment - prior year | - | - | 53 | |
1,844 | 17,694 | 12,538 | ||
6. Dividend
The final and only dividend in respect of 2014, amounting to 3.0p per share, or $1,869,091 was paid on 10 July 2015 (2013: 3.0p per share, or $1,997,614, paid on 17 June 2014). As in previous years no interim dividend has been declared.
7. Earnings per ordinary share (EPS)
2015 | 2014 | 2014 | ||
6 months | 6 months | Year | ||
to 30 June | to 30 June | to 31 December | ||
(unaudited) | (unaudited) | (audited) | ||
$000 | $000 | $000 | ||
Profit for the period attributable to owners of the Company before BA adjustment | 12,805 | 25,879 |
52,422 | |
Net BA adjustment | (10,463) | 15,209 | (21,660) | |
Earnings used in basic and diluted EPS | 2,342 | 41,088 |
30,762 | |
Number | Number | Number | ||
'000 | '000 | '000 | ||
Weighted average number of shares in issue in period | ||||
- used in basic EPS | 39,636 | 39,636 | 39,636 | |
- dilutive effect of outstanding share options | 43 | 48 |
43 | |
- used in diluted EPS | 39,679 | 39,684 | 39,679 | |
Shares in issue at period end | 39,976 | 39,976 | 39,976 | |
Less: Treasury shares | (340) | (340) | (340) | |
Shares in issue at period end excluding treasury shares | 39,636 | 39,636 | 39,636 | |
Basic EPS before BA adjustment | 32.31cts | 65.29cts | 132.26cts | |
Basic EPS after BA adjustment | 5.91cts | 103.66cts | 77.61cts | |
Dilutive EPS before BA adjustment | 32.27cts | 65.21cts | 132.12cts | |
Dilutive EPS after BA adjustment | 5.90cts | 103.54cts | 77.53cts |
8. Fair value measurement of financial instruments
The carrying amounts and fair values of the financial instruments which are not recognised at fair value in the Statement of Financial Position are exhibited below:
2015 | 2014 | 2014 | ||||
6 months | 6 months | Year | ||||
to 30 June | to 30 June | to 31 December | ||||
(unaudited) | (unaudited) | (audited) | ||||
Carrying amount | Fair value | Carrying amount | Fair value | Carrying amount | Fair value | |
$000 | $000 | $000 | $000 | $000 | $000 | |
Non-current receivables | ||||||
Due from non-controlling interests | 1,193 | 924 | 1,193 | 872 | 1,193 | 872 |
Due from cooperatives under Plasma scheme | 1,612 | 1,527 | 4,396 | 3,945 | 1,557 | 1,397 |
Due from village smallholder schemes | 239 | 220 | 268 | 247 | 257 | 237 |
3,044 | 2,671 | 5,857 | 5,064 | 3,007 | 2,506 | |
Borrowings due after one year | ||||||
Long term loan | 34,375 | 34,500 | 34,813 | 35,095 | 34,625 | 34,028 |
Financial instruments not measured at fair value includes cash and cash equivalents, trade and other receivables, trade and other payables, and borrowings due within one year.
Due to their short-term nature, the carrying value of cash and cash equivalents, trade and other receivables, trade and other payables and borrowings due within one year approximates their fair value.
All non-current receivables and long term loan are classified as Level 3 in the fair value hierarchy.
The valuation techniques and significant unobservable inputs used in determining the fair value measurement of non-current receivables and borrowings due after one year, as well as the inter-relationship between key unobservable inputs and fair value, are set out in the table below:
Item | Valuation approach | Inputs used | Inter-relationship between key unobservable inputs and fair value
|
Non-current receivables | |||
Due from non-controlling interests | Based on cash flows discounted using current lending rate of 6% (1H 2014 and 2014: 6%)
| Discount rate | The higher the discount rate, the lower the fair value
|
Due from cooperatives under Plasma scheme | Based on cash flows discounted using an estimated current lending rate of 5.55% (1H 2014: 5.55%, 2014: 5.58%)
| Discount rate | The higher the discount rate, the lower the fair value
|
Due from village smallholder schemes
| Based on cash flows discounted using an estimated current lending rate of 5.55% (1H 2014: 5.55%, 2014: 5.58%)
| Discount rate | The higher the discount rate, the lower the fair value
|
Borrowings due after one year | |||
Long term loan | Based on cash flows discounted using an estimated current lending rate of 5.55% (1H 2014: 5.55%, 2014: 5.58%)
| Discount rate | The higher the discount rate, the lower the fair value
|
9. Report and financial information
Copies of the interim report for the Group for the period ended 30 June 2015 are available on the AEP website at www.angloeastern.co.uk.