30 May 2024
Anglo-Eastern Plantations Plc
("AEP",
"Group" or "Company")
Trading
Statement
AEP is a major producer of palm oil,
and to a lesser extent rubber, with plantations across Indonesia
and Malaysia, today announces a trading update in respect of the
first quarter ended 31 March 2024.
Operational and financial performance
For the first three months ended 31
March 2024, our own production of fresh fruit bunches ("FFB") from
operations was 232,000mt, a decrease of 5% compared to the same
period in 2023 (3M23: 243,500mt). Lower production trends were
experienced in all regions except for Bangka and Kalimantan. In
Bangka matured plantings were higher in 2024 with ideal weather
conditions as well as in Kalimantan where matured plantings were
also higher with most trees reaching peak production age. Rainfall
in North Sumatera was generally irregular with two continuous
months of rainfall below the ideal monthly benchmark of 150mm. On
the other hand, rainfall in Bengkulu and KAP in Kalimantan was
exceptional high, above 400mm per month for the entire quarter,
disrupting harvesting activities. Another reason for the lower
production in North Sumatera and Bengkulu was due the reduction of
matured trees as a result of replanting. Over the last year 1,742
hectares were felled for replanting.
FFB bought-in was also lower at
190,400mt (3M23: 204,700mt), a decrease of 7%. The drop in external
crop purchases across all its mills, except for Blankahan mill in
North Sumatera and Bina Pitri Mill in Riau, was due to lower crop
trend induced by weather as well as intense competition for
external crops. As a result, crude palm oil ("CPO") production was
lower by 7% at 86,200mt compared to 92,600mt for the same period
last year.
The CPO price ex-Rotterdam averaged
$1,004/mt for the first three months of 2024, a decrease of 1% from
the average price of $1,016/mt in the corresponding quarter in
2023. The average price was however better than $935/mt at the
start of the year. The ex-mill price, as a result, was lower by 4%
at $735/mt compared to $763/mt for the same period last year.
Despite palm oil supply remaining tight in the first quarter of
2024 due to lower production and poor weather affecting harvesting,
the CPO price was somewhat lower than last year due to the
abundance of soft-oil and a fragile demand.
The Group's balance sheet remains
strong with no outstanding bank loans. The Group had net cash of
$136.6 million as at 31 March 2024 compared to $284.6 million at
the period end in 2023. The significant reduction in cash was
principally due to the consolidation of AEP's holding in Indonesian
subsidiaries by purchasing minority interests in late 2023 and
allocating funds into investments for better yield.
Development
AEP has plantations across Indonesia
and Malaysia, amounting to approximately 90,500 hectares, of which
approximately 68,680 hectares including plasma are planted. New
planting for the first three months ended 31 March 2024 was lower
at 66 hectares (3M23: 202 hectares) including plasma. Another 93
hectares were replanted in Bengkulu in the first three months of
2024.
The HPP Mill has commenced operation
but has only processed its own crop for the first quarter of 2024.
It will start purchasing external crops once the effluent treatment
plant is fully commissioned, which is expected to be in the third
quarter of 2024, to increase the utilisation of the
mill.
The earthworks design for the eighth
mill in the KAP estate in Kalimantan has been completed. The
building permit is pending the evaluation of the Environmental
department of which we have been assured is at the final stage of
approval. We are hopeful to start the earthworks by the third
quarter of 2024
Outlook
The CPO price ex-Rotterdam started the
year at $935/mt. Since then, it has trended marginally upwards to
close at $990/mt on 27 May 2024.
The demand for CPO is expected to
remain weak and may decline in the near term, especially against
the backdrop of a seasonal increase in soybean production in South
America.
For
further enquiry, contact:
Anglo-Eastern Plantations
Plc
Dato' John Lim Ewe
Chuan
+44 (0)20 7216 4621
Panmure Gordon (UK) Limited
Dominic Morley / Amrit Mahbubani
+44
(0)20 7886 2500
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.