Final Results

Anglo-Eastern Plantations PLC 10 April 2003 10 April 2003 ANGLO-EASTERN PLANTATIONS PLC - PRELIMINARY ANNOUNCEMENT • Anglo-Eastern Plantations, which owns over 23,000 ha of oil palm plantations, primarily in Indonesia, announces a 243% increase in pre-tax profit to £8.0m in the year ended 31 December 2002. 2002 2001 Change Turnover (£000) 20,622 11,800 75% Operating profit (£000) 8,455 2,340 261% Pre-tax profit (£000) 8,008 2,333 243% Earnings per share (p) 10.9 3.6 203% Dividend per share (p) 2.58 1.40 84% Net assets per share (p) 128 141 -9% • The profit increase reflects mainly a strong crude palm oil price after three years of falling or weak prices (an average for 2002 of $400/mt compared to $281/mt in 2001), but is also supported by increasing production from the Bengkulu project in South Sumatra which is now coming to maturity and was the principal contributor to a 16% increase in group FFB (fresh fruit bunches) production. • The 40 mt/hr mill at Bengkulu was commissioned on schedule in April 2002 and it is planned that the mill will be expanded to a capacity of 60 mt/hr in 2004/5. • The Indonesian operations continue to operate with no unusual interruption. • Group crops for the first quarter of 2003 have been above expectations and are 35% ahead of the same period in 2002. The CPO (crude palm oil) price settled at $450/mt in January and February 2003 but has since eased to $415/mt. Mr T H Chan, chairman, commented 'If volumes continue ahead of 2002 and the average CPO price remains ahead of that for 2002 then, barring any material adverse factors, we can expect another increase in profit for 2003. Having regard to the satisfactory results and to the increasing production from the Bengkulu estates the board is proposing to double the dividend in respect of 2002 to 4.0 cts per share, or an 84% increase in sterling terms to 2.58p.' Enquiries: Anglo-Eastern Plantations plc 020-7236 2838 Rollo Barnes (Financial Director) Bankside Consultants Limited 020-7444 4166 Charles Ponsonby CHAIRMAN'S STATEMENT I am pleased to report that in 2002 the group achieved a turnover of $31.1 million and profit before tax of $12.1 million. The previous year's turnover and profit were $17.0 million and $3.4 million respectively. The increase reflects mainly a strong palm oil price after three years of falling or weak prices, but is also supported by increasing production from our Bengkulu project in South Sumatra which is now coming to maturity and was the principal contributor to a 16% increase in group FFB (fresh fruit bunches) production. There was also an exchange gain of $0.8 million arising on our long term borrowings compared to a loss of $0.2 million in the previous year. Against these positives there were significant increases in operating costs following an industry wide 36% increase in wages as well as a reduction in fuel subsidies in Indonesia from January 2002. The results for 2001 included an exceptional provision of $1.5 million against the value of our Malaysian estates. The effective tax rate of 36.5% compares to 48.8% in 2001, which was unusually high because of the disallowable provision in 2001 referred to above. After a charge for minority interests of $1.3 million (2001: credit of $0.3 million) profit for the year attributable to shareholders was $6.5 million (2001: $2.0 million). Earnings per share were 16.5 cts (10.9p) compared to 5.2 cts (3.6p) in 2001. Group net assets per share at the year end amounted to 207 cts, largely unchanged from the previous year because of exchange effects. In line with its major capital expenditure programme, the group completed draw down of its long term development loan facilities during 2002 bringing the total borrowings outstanding to $10.1 million. Against this, the group's cash balances stood at $8.4 million at the year end. Commodity prices The CPO (crude palm oil) price began to improve from March 2002 after reaching a low of $215/mt (cif Rotterdam) in May 2001, the lowest level for 15 years. The average price for 2002 was $400/mt, compared to $281/mt in 2001. At the end of 2002 the price was $465/mt. Prices for the other two crops produced by the group also recorded strong increases in 2002. Average prices for rubber were around 27% higher and for cocoa, which reached a 15 year peak, 56% higher. These two crops contributed about 6% of group profits in 2002. Indonesia FFB production from our main estate, Tasik, and from Anak Tasik in North Sumatra was 149,000 mt, down 3,000 mt from the previous year. Although this was the second consecutive year of decline in output, the cause was probably weather rather than the age of the plantings. By contrast, FFB crops from our other three smaller estates in North Sumatra registered an increase of 22% to an all time record of 51,000 mt. Cocoa and rubber crops at these estates also improved. New planting in Bengkulu was scaled down to 350 ha in 2002 while we concentrated on improving infrastructure and consolidating the areas already planted. Total area planted there now is 9,600 ha, of which 2,100 ha are still immature. FFB production at Bengkulu was 62,000 mt compared to 30,000 mt in 2001. The 40mt/hr mill at Bengkulu was commissioned on schedule in April 2002. In the eight months of its operation, the mill was able to run at satisfactory throughput as a result of processing bought-in crop of 28,000 mt as well as 52,000mt of our own. However, this high proportion of bought in crop affected the extraction rate. It is planned that the mill will be expanded to a capacity of 60mt/hr in 2004/5, which will allow us to handle all the crops from Bengkulu for the next five years. Definitive land titles were finally obtained over all the Bengkulu areas which we have planted, or will plant, in the next three or four years. We have rights over another 5,000 ha of vacant land and will apply for the relevant papers in the light of prevalent conditions at the appropriate time. I am pleased to report that the Indonesian operations continue to operate with no unusual interruption. Our local management and staff continue to pay particular attention to good relations with local authorities and local residents. Malaysia Our Malaysian estates experienced an exceptionally dry spell in early 2002 which affected production. Although the FFB crop of 32,000 mt was an improvement of 11% over the previous year, it was below our expectations. At present prices, the estates are just self-funding, including loan repayments. The operation made a loss, at the pre-tax level, of $190,000 in 2002 compared to a loss of $490,000 in the previous year. However, low yields remain a concern. We have recently strengthened local management and hope that new approaches to field husbandry, in what is hilly terrain, will accelerate the move to profitability. Outlook and dividend Group crops for the first quarter of 2003 have been above expectations and are 35% ahead of the same period in 2002. However, it is difficult to predict whether this improvement will continue for the rest of the year. The CPO price settled at $450/mt in January and February but has since fallen to $415/mt. Rubber and cocoa prices are around 15% better than last year's averages and production is at a similar level to that in the same period in 2002. Competition for bought in crop at Bengkulu and Tasik is expected to increase with new mill capacities coming on stream in both regions, so contribution from this source is expected to be lower in the current year. The group's cash position has continued to improve but significant capital expenditure in Bengkulu remains and repayment of our long term loans commenced this year. In addition, we are considering building a small oil mill for our Medan estates which is expected to cost nearly $3 million. If volumes continue ahead of 2002 and the average CPO price remains ahead of that for 2002 then, barring any material adverse factors, we can expect another increase in profit for 2003. Having regard to the satisfactory results and to the increasing production from the Bengkulu estates the board is proposing to double the dividend in respect of 2002 to 4.0 cts, per share, or an 84% increase in sterling terms to 2.58p. CHAN TEIK HUAT 9 April 2003 Chairman CONSOLIDATED PROFIT AND LOSS ACCOUNT 2002 2001 2002 2001 US$'000 US$'000 £'000 £'000 Unaudited Audited Unaudited Audited Turnover - continuing 31,139 16,992 20,622 11,800 operations ======== ======== ======== ======== Operating profit - 12,767 3,369 8,455 2,340 continuing operations Net interest (payable) (675) (10) (447) (7) -------- -------- -------- -------- Profit on ordinary 12,092 3,359 8,008 2,333 activities before tax Taxation (4,367) (1,638) (2,892) (1,138) -------- -------- -------- -------- Profit on ordinary 7,725 1,721 5,116 1,195 activities after tax Minority interests (all (1,250) 320 (828) 222 equity interests) -------- -------- -------- -------- Profit attributable to 6,475 2,041 4,288 1,417 shareholders Dividends (1,571) (785) (1,040) (545) -------- -------- -------- -------- Retained profit for the 4,904 1,256 3,248 872 year Earnings per ordinary share - basic 16.5cts 5.2cts 10.9p 3.6p - diluted 16.4cts 5.2cts 10.9p 3.6p 2002 2001 2002 2001 Operating profit is stated US$'000 US$'000 £'000 £'000 after charging: -------- -------- -------- -------- Provision for reduction in value of Malaysian estates - (1,553) - (1,078) Exchange profit/(losses) 828 (188) 548 (131) -------- -------- -------- -------- 828 (1,741) 548 (1,209) -------- -------- -------- -------- TAXATION: 2002 2001 2002 2001 US$'000 US$'000 £'000 £'000 Foreign corporation tax 4,170 2,443 2,762 1,698 Foreign withholding tax on 372 97 246 67 remittances Deferred tax adjustment (175) (472) (116) (328) - current year - prior years - (430) - (299) -------- -------- -------- -------- 4,367 1,638 2,892 1,138 ======== ======== ======== ======== DIVIDEND: The board have proposed a final and only dividend for 2002 of 4.00cts (2001 - 2.00cts) to be paid on 18 June 2003 to shareholders on the register on 23 May 2003. Shareholders electing to receive their dividend in sterling will receive 2.58p (2001 - 1.40p). ACCOUNTS: The financial information contained in this announcement does not constitute statutory financial statements within the meaning of section 240 of the Companies Act 1985. Statutory accounts for the previous financial year ended 31 December 2001 have been delivered to the Registrar of Companies. The auditors' report on those accounts was unqualified and did not contain any statement under section 237(2) or (3) of the Companies Act 1985. The auditors have not yet reported on the accounts for the year ended 31 December 2002, nor have any such accounts been delivered to the Registrar of Companies. Accounting policies remain unchanged from the previous year. This preliminary announcement was approved by the board on 9 April 2003. CONSOLIDATED BALANCE SHEET 2002 2001 2002 2001 US$'000 US$'000 £'000 £'000 Unaudited Audited Unaudited Audited Fixed assets Tangible assets 103,558 104,333 64,322 71,461 -------- -------- -------- -------- Current assets Stocks 928 600 576 411 Debtors 2,001 1,916 1,243 1,312 Investments 234 266 145 182 Cash 8,416 2,248 5,227 1,540 -------- -------- -------- -------- 11,579 5,030 7,191 3,445 ======== ======== ======== ======== Current liabilities Creditors: falling due within one year Borrowings (2,040) (99) (1,267) (68) Other creditors (7,717) (5,266) (4,793) (3,607) -------- -------- -------- -------- (9,757) (5,365) (6,060) (3,675) ======== ======== ======== ======== Net current assets/ 1,822 (335) 1,131 (230) (liabilities) -------- -------- -------- -------- Total assets less current 105,380 103,998 65,453 71,231 liabilities Non-current liabilities Creditors: falling due after more than one year Borrowings (8,085) (6,460) (5,022) (4,425) Deferred taxation 1,215 890 755 610 -------- -------- -------- -------- Net assets 98,510 98,428 61,186 67,416 ======== ======== ======== ======== Share capital 15,171 15,171 9,808 9,808 Share premium 23,570 23,570 15,329 15,329 Share capital redemption 1,087 1,087 663 663 reserve Revaluation and exchange 6,586 10,986 3,028 9,004 reserve Profit and loss account 34,719 29,815 21,565 20,421 -------- -------- -------- -------- Shareholders' funds 81,133 80,629 50,393 55,225 Minority interests 17,377 17,799 10,793 12,191 -------- -------- -------- -------- 98,510 98,428 61,186 67,416 ======== ======== ======== ======== CONSOLIDATED STATEMENT OF RECOGNISED GAINS AND LOSSES 2002 2001 US$000 US$000 Unaudited Audited Profit for the financial 6,475 2,041 year Unrealised surplus on revaluation of the estates (15,375) 7,292 Profit/(loss) on exchange 10,975 (4,820) translation -------- -------- Total recognised gains 2,075 4,513 relating to the year -------- -------- RECONCILIATION OF MOVEMENT IN SHAREHOLDERS' FUNDS 2001 2001 US$000 US$000 Unaudited Audited Total recognised gains 2,075 4,513 Dividends (1,571) (785) -------- -------- Net increase in 504 3,728 shareholders' funds Beginning of year 80,629 76,901 -------- -------- End of year 81,133 80,629 -------- -------- CONSOLIDATED CASH FLOW statement 2002 2001 2002 2001 US$000 US$000 £000 £000 Unaudited Audited Unaudited Audited Net cash inflow from 13,691 6,666 8,670 4,647 operating activities Returns on investment and servicing of finance (1,158) (320) (767) (222) Tax paid net of (2,424) (2,513) (1,605) (1,745) refunds Capital expenditure (6,722) (7,804) (4,452) (5,420) -------- -------- -------- -------- Equity dividends paid - parent company (785) (588) (520) (408) -------- -------- -------- -------- Cash outflow 2,602 (4,559) 1,326 (3,148) financing Financing -------- -------- -------- -------- Drawdown of long term 3,663 5,080 2,427 3,528 loans Finance lease (29) (29) (19) 20 repayments -------- -------- -------- -------- 3,634 5,051 2,408 3,508 -------- -------- -------- -------- Increase in cash in 6,236 492 3,734 360 the year ======== ======== ======== ======== EXCHANGE RATES ($ : £) 2002 2001 Year end 1.61 1.46 Average 1.51 1.44 WEIGHTED AVERAGE NUMBER OF SHARES IN ISSUE Basic 39,226,922 39,226,922 Diluted 39,440,025 39,226,922 CROPS 2002 2001 Tonnes Tonnes Oil palm fresh fruit bunches -ex estates 294,062 252,632 -bought in 99,029 74,789 Crude palm oil 63,240 52,073 Rubber 1,491 1,376 Cocoa 193 120 AREAS Total Mature Immature Ha Ha Ha Oil palm 22,724 19,335 3,389 Rubber 843 843 - Cocoa 258 197 61 -------- -------- -------- 23,825 20,375 3,450 -------- -------- Reserves 10,859 Further title to be 5,397 issued -------- Total 40,081 ======== This information is provided by RNS The company news service from the London Stock Exchange

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