Anglo-Eastern Plantations Regulatory News (AEP)

15 May 2009 08:20



15 May 2009

Anglo-Eastern Plantations PLC 

("AEP", "Group" or "Company")

Interim Management Statement

Anglo-Eastern Plantations PLC, which owns approximately 132,000 hectares of plantation land, primarily in Indonesia, and operates approximately 40,000 hectares of developed plantations, announces its Interim Management Statement in respect of the period since 31 December 2008.

Operational and financial performance

For the first quarter ended 31 March 2009, revenue was $39.8m compared to $74.8m for the same period in 2008. Operating profit and profit before tax for the first quarter ended 31 March 2009 were comparatively lower than the first quarter of 2008. These falls are due to corrections in the CPO price, in line with other commodities' prices, from the exceptional levels reached during the first half of 2008, and as such do not cause undue concern. 

The CPO price, which ended 2008 at $495/mt, has continued its recovery trend since, reaching a high of $795/mt, and averaged $608/mt for the first four months of 2009 (which compares with $1,148/mt averaged for the corresponding period in 2008 and $945/mt for the whole of 2008). The rise in the CPO price since December 2008, as witnessed in other competing vegetable oils, can be attributed to recovery in fundamental demand as well as to the tighter inventory level of global oil seeds production. As announced in the full year results to December 2008, the industry generally feels that the long term sustainable price is $600 - $700/mt.

For the three months ended 31 March 2009, production volume of fresh fruit bunches ("FFB") recorded negligible growth, while CPO production volume was 4% higher than that recorded for the same period in 2008. The higher CPO production volume was due to better utilisation rate of AEP's mills, as a result of higher bought-in FFB volume.

AEP's balance sheet remains strong while overall cash flow generation remains positive. As at 31 March 2009 the Group's net cash position was slightly down, from $33.8 million recorded at 31 December 2008, due to higher capital expenditure.

Development 

The Group's development is proceeding as planned, with 840 ha already planted with oil palm seedlings by the first quarter of 2009. The Group targets to commence planting in 8,900 ha of new areas in Bengkulu, North Sumatra and Kalimantan by December 2009. In addition, land preparation, which involves compensation negotiation with local villagers and land clearing, for 1,500 ha of land in newly acquired region of South Sumatra and Bangka, is targeted for completion by December 2009.

The construction of a 40/60mt oil mill located at Sumindo estate in Bengkulu is under progress and the mill is expected to be commissioned by first quarter of 2010.

Outlook

Prospects for the remainder of 2009 will be challenging in view of the lower average CPO price in the face of the continuing global recession. Despite the unfavourable economy outlook, AEP is confident that demand for its products will be sustainable and management can expect a satisfactory profit level and cash flow for the remainder of 2009.

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Note for editors:

As at 14 May 2009 closing share price of 380p, AEP's market capitalisation was £149.94 million.

This announcement contains unaudited and "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. The 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.