Anglo-Eastern Plantations Regulatory News (AEP)

14 Nov 2008 11:42

14 November 2008

Anglo-Eastern Plantations PLC

ANGLO-EASTERN PLANTATIONS PLC

Interim Management Statement

Anglo-Eastern Plantations Ltd ("AEP" or "the Company") today announces its Interim Management Statement in respect of the period since 30 June 2008.

Operational and financial performance

For the nine months ended 30 September 2008, like-for-like production of fresh fruit bunches ("FFB") and crude palm oil ("CPO") increased by 11% and 28% respectively.

CPO price averaged US$1,089 per metric tonne (mt) for the nine months to 30 September 2008; a fall of 7% from the average of US$1,169/mt recorded in the first half of 2008 but an increase of 38% from the average price of US$790/mt recorded for the whole of 2007. 

For the nine month period to 30 September 2008, revenue and operating profit are both well ahead of those for the corresponding period in 2007 and in line with management expectations.

AEP's balance sheet remains strong. The Company continues to experience strong cash flow generation. AEP had a net cash position of US$31.5 million at 31 October 2008.

Development 

Land compensation and clearing is progressing well in new areas in Kalimantan, Bengkulu and Bangka, while in North Sumatera land clearing and planting is expected to be fully completed in 2009.

The new mills planned for the Sumindo estate in Bengkulu and Marison (Cahaya Pelita Andhika) estate in Sibolga are in the final tender negotiation stage.

Outlook

The CPO price dropped as low as US$455/mt in October 2008, representing a 67% decline from its peak of US$1,390 recorded in March 2008. The Indonesian government has annulled the export tax on CPO to zero, with effect from 1 November 2008, in response to these sharp declines. The resulting tax saving is expected to slightly cushion the impact of this decline, in CPO prices, for the Company.

The recent volatility of the US dollar against the Indonesian Rupiah is expected to have some impact on the currency translation position. To mitigate exposure to currency exchange volatility, AEP is managing its cash in dollars and local currencies prudently, taking into consideration its dollar-denominated borrowings and operational cost currencies requirements.

Prospects for the remainder of 2008 will be challenging in view of the significant drop in the CPO price and volatility in currency exchange rates.  Despite these less favourable conditions AEP is confident that, given the strong performance in the first nine months, the outcome for the full year to 31 December 2008 will exceed the Company's performance in 2007.

Change in the Board

As announced on 28 August 2008, Mr. Donald Low has joined the Board as an Executive Director and Acting Chief Executive Officer following the retirement of Mr. Chan Teik Huat as Chief Executive Officer. Mr. Chan Teik Huat remains as Executive Chairman.

Mr. David Smith stepped down as Finance Director on 26 August 2008, but remains on the Board as Non-Executive Director.

For further information, contact:

Note for editors:

AEP operates and is developing some 132,000 hectares (ha) of plantations, primarily palm oil in Indonesia, of which approximately 40,000 ha are planted.

As at 13 November 2008 closing share price of 303.5p, AEP's market capitalisation was £119.76million.

This announcement contains certain "forward-looking statements" with respect to the financial conditions and operations of the AEP Group that are based on current expectations or beliefs, as well as assumptions about future events. Undue reliance should not be placed on these statements, as they involve risks and uncertainties and can be affected by other factors that could cause the actual results or development to differ materially from those expressed or implied in these forward-looking statements. These forward-looking statements, based on past or current trends and circumstances should not be taken as a representation that such trends and circumstances will continue in the future. AEP undertakes no obligation to revise or update any forward-looking statements contained within this announcement, regardless of whether those statements are affected as a result of new information, future events or otherwise. Nothing in this announcement should be construed as a profit forecast.