Anglo-Eastern Plantations Regulatory News (AEP)

20 May 2022

Anglo-Eastern Plantations Plc

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

Trading Statement

Anglo-Eastern Plantations Plc, 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 2022.

Operational and financial performance

For the first three months ended 31 March 2022, our own production of fresh fruit bunches ("FFB") was 268,700mt, a decrease of 5% compared to the same period in 2021 (3M21: 281,900mt). Plantations in North Sumatera with younger palms performed reasonably well while plantations with older palms in Bengkulu and Kalimantan experienced a drop in production. This was probably due to seasonal variation as rainfalls in these areas were close to normal. Lower production in Bengkulu was also due to the reduction of matured areas as 1,194 hectares were replanted from 2021 to first quarter of 2022. FFB bought-in was also lower at 261,200mt (3M21: 278,500mt), a decrease of 6% in line with lower crop production in the Bengkulu region. As a result, crude palm oil ("CPO") production was lower by 7% at 107,300mt compared to 114,900mt last year.

The CPO price ex-Rotterdam averaged $1,592/mt for the first three months to 31 March 2022. This represented an increase of 48% from the average price of $1,078/mt recorded in the first quarter of 2021 and was above $1,320/mt at the start of the year. As a result, the mill enjoyed a 55% higher ex-mill price of $1,041/mt compared to $673/mt for the same period last year. Short supply of global vegetable oil caused by the dry weather in soy-bean producing countries and the disruption in sunflower harvest in Ukraine were some of the likely causes for the sharp rise in CPO prices. 

The Group's balance sheet remains strong with no outstanding bank loans. The Group has net cash of $252.5 million as at 31 March 2022.

Development

AEP has plantations across Indonesia and Malaysia, amounting to some 128,000 hectares, of which approximately 75,100 hectares (including Plasma) are planted. New planting for the first three months ended 31 March 2022 was lower at 192 hectares (3M21: 442 hectares) including Plasma. Higher rainfall in Central Kalimantan disrupted our land clearance.

After much delay due to the pandemic and new regulations imposed on the importation of certain machines, the construction work for the seventh mill in North Sumatera is expected to be completed by the fourth quarter of 2022.

The site for the development of the second mill in Kalimantan has been selected and drawings will be finalized for submission to local authorities for building permits and environmental impact assessment.

Outlook

The CPO price ex-Rotterdam started the year at $1,320/mt. Since then, it has trended upwards to close at $1,780/mt on 6 May 2022. The move by the Indonesian government to ban the export of CPO and refined palm oil from 28 April 2022 has literally cut off the largest supply of global vegetable oil. The ban has since driven up global edible oil prices as supplies were already choked by factors like drought in South America and the war in Ukraine. However, as expected by Industry experts, the Indonesian government announced yesterday that the ban will be lifted with effect from 23 May 2022 as domestic supply had improved and the price of cooking oil had reduced since the ban came into effect on 28 April 2022. A pullback in the local CPO price is also likely as crop production improves further from the second half of the year.

For further enquiry, contact:

Anglo-Eastern Plantations Plc

Dato' John Lim Ewe Chuan +44 (0)20 7216 4621

Panmure Gordon (UK) Limited

Dominic Morley +44 (0)20 7886 2954

This announcement contains inside information for the purposes of Article 7 of Regulation (EU) No 596/2014 as it forms part of UK domestic law by virtue of the European Union (Withdrawal) Act 2018.