Anglo-Eastern Plantations Regulatory News (AEP)

20 April 2021

Anglo-Eastern Plantations Plc

("AEP", "Group" or "Company") 

Trading Statement

Anglo-Eastern Plantations, a major producer of palm oil and some rubber across Indonesia and Malaysia, today announces a trading update in respect of the first quarter ended 31 March 2021.

AnnouncementWith the current lockdown in the United Kingdom ("UK") and similar measures in Indonesia and Malaysia, known as the Movement Control Order ("MCO"), together with travelling restrictions and some form of quarantine requirements, it has not been logistically possible for our group auditors to carry out their audit on site in Indonesia and Malaysia, which would have been their normal practise. As a result, BDO London have to review the component auditors work remotely which has impacted on the audit timetable. Accordingly, the Board is compelled to delay the announcement of the 2020 audited results to around mid-May 2021, which would enable the Company to give the required notice to have its AGM by the end of June 2021. This is in line with the temporary relief granted by the Financial Conduct Authority for listed companies in the UK to allow for more time to prepare financial statements due to the pandemic.

Although Malaysia and some parts of Indonesia are in lockdown, our plantations and mills are operating close to normal. To date we have reports of a few Covid-19 infections in our plantations, mills and offices whereby standard operating procedures including quarantine, contact tracing and prompt medical treatment were applied.

Operational and financial performance

For the first three months ended 31 March 2021, our own production of fresh fruit bunches ("FFB") was 281,900mt, an increase of 14% compared to the same period in 2020 (3M20: 246,600mt). The higher production was due to improved yield from the young palms in North Sumatera and Kalimantan. This was in addition to 2,847 hectares of newly matured planting mostly from the same regions as reported earlier. FFB bought-in was also higher at 278,500mt (3M20: 183,200mt), an increase of 52%. As a result, CPO production was higher by 30% at 114,900mt compared to 88,600mt last year.

The CPO price ex-Rotterdam averaged $1,078/mt for the first three months to 31 March 2021. This represents an increase of 47% from the average price of $731/mt recorded in the first quarter of 2020 and was above $1,014/mt at the start of the year. As a result, the mill enjoyed a higher ex-mill price of $673/mt compared to $596/mt for the same period last year.

The Group's balance sheet remains strong with the Long Term Development Loans fully repaid as at 31 March 2021 (31 March 2020: $5.5m). The Group has net cash of $142.3m as at 31 March 2021.

Development

AEP has plantations across Indonesia and Malaysia, amounting to some 128,000 hectares, of which approximately 73,544 hectares (including Plasma) are planted. The Company's new planting for the three months ended 31 March 2021 totalled 442 hectares (3M20: 548 hectares) including Plasma. 

The civil and structural works for the seventh mill in North Sumatera are progressing rapidly and are expected to be completed by the end of first quarter of 2022. Meanwhile, mechanical works for the same mill totalling $4.65m was also awarded with completion targeted for the second quarter of 2022.

Outlook

The CPO price ex-Rotterdam started the year at $1,014/mt. Since then, it has trended upwards to close at $1,180/mt on 13 April 2021. Palm oil prices remain relatively stable due to low inventory and higher demand before the Muslim Ramadan festival. We, nevertheless, expect a pullback in the CPO price as the crop production improves further from the second half of the year.

Note: The information communicated in this announcement is inside information for the purposes of Article 7 of Market Abuse Regulation 596/2014.

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