Interim Results
Anglo-Eastern Plantations PLC
28 September 2005
Wednesday 28 September 2005
ANGLO-EASTERN PLANTATIONS PLC - INTERIM ANNOUNCEMENT
Anglo-Eastern Plantations, which operates approximately 31,000 hectares of
developed plantations, primarily oil palm in Indonesia, announces a substantial
reduction in pre-tax profit in the half year to 30 June 2005, as was predicted
in the AGM statement of 28 June 2005. The outlook for the second half of 2005 is
favourable.
2005 2004 Change
Revenue ($'000) 24,272 33,296 -27.1%
Operating profit ($'000) 7,763 12,622 -38.5%
Pre-tax profit ($'000) 7,640 12,528 -39.0%
Basic earnings per share (cts) 10.7 18.2 -41.2%
• Net cash of $0.8 million compared with net debt of $1.0 million a year
earlier. Capital expenditure will continue at a high level but the net cash
position is expected to improve in the second half of 2005.
• The lower turnover and profit is due almost entirely to the lower crude
palm oil (CPO) prices. The average for the half year of $417/mt compared
with $502/mt for the first half of 2004 and $460/mt for 2004 as a whole.
• Production of fresh fruit bunches (FFB) amounted to 195,917mt, an
increase of about 6% over the same period last year. Total FFB bought in or
processed for third parties at the group's three mills increased by 19%, to
143,807mt. Growth in production of CPO was 24%, reaching 67,327mt.
• Following the acquisition of 5,150 hectares at Labuhan Bilik in North
Sumatra in December 2004, the group continues to look for further
opportunities in Indonesia.
Chan Teik Huat, Chairman and Chief Executive, stated 'Crop output at the
Indonesian estates, particularly Tasik, has shown improvement in recent weeks.
In the absence of any adverse circumstances, the group's FFB and CPO output for
2005 (which is normally biased towards the second half of the year) will set
another record. If CPO prices stay at the same average price witnessed in the
first half, the second half results are expected to show material improvement
over the first half. While it is unlikely that the record turnover and profit of
2004 can be exceeded, and while recent increases in fuel prices will have an
adverse effect on operating costs, nevertheless I expect the group to achieve a
satisfactory result for the year.'
Enquiries:
Anglo-Eastern Plantations Plc 020-7236 2838
Rollo Barnes (Financial Director)
Bankside Consultants Limited
Charles Ponsonby 020-7367 8851 / 07789-202 312
INTERIM STATEMENT
After three years of rising profits I have to report a lower result for the
first half of 2005, due mainly to lower crude palm oil (CPO) prices, as
indicated at the Annual General Meeting in June 2005. The outlook for the second
half of 2005 is significantly better.
In spite of group FFB production and bought in crop 6% and 19% ahead of the same
period in 2004, group turnover for the six months declined by 27% to $24.3
million. Profit before tax fell 39% to $7.6 million. As well as the effect of
lower CPO prices, a larger loss was also incurred at Bina Pitri estate, in the
province of Riau, where rehabilitation effort expended there is not likely to
show results until 2006
With a higher tax charge incurred on dividends declared from our Indonesian
subsidiaries, the group's earnings per share for the six months were 10.7 cts
compared to 18.2 cts for the same period in 2004.
The above profits and earnings figures are calculated after applying
International Financial Reporting Standards (IFRS) which became mandatory for
all UK listed companies for accounting periods commencing on or after 1 January
2005. The effect of these standards and the restatement of prior period results,
is dealt with later on in this report.
Group cash at 30 June 2005 was $9.3 million against bank loans outstanding of
$8.6 million. During the first six months, capital expenditure amounted to $4.1
million and loan repayments were $2.6 million. There are further loan repayments
of $2.4 million to be made by October 2005, after which the original $8.0
million bank loan raised to fund the Bengkulu project will be completely repaid.
Capital expenditure will continue at a high level but the net cash position is
expected to improve in the second half of 2005.
Production and Sales
2005 2004 2004
6 months 6 months year to
to 30 June to 30 June 31 Dec
(unaudited) (unaudited) (audited)
mt mt mt
Oil palm production 195,917 184,260 428,657
FFB
- all estates
- bought in or processed for third
parties 143,807 120,763 241,359
Saleable crude palm oil (CPO) 67,327 54,258 118,197
Saleable palm kernel 16,014 13,025 28,526
Oil palm sales
CPO 66,908 55,953 119,250
Kernel 16,070 12,545 28,315
FFB sold outside 24,567 43,406 107,844
Other crops production
Rubber 396 729 1,370
Cocoa 73 80 208
All FFB production at the North Sumatra estates, with the exception of Tasik,
increased from last year. FFB production at Tasik was down 17%. This may be a
reaction to the high yields in the previous two years. FFB production at
Bengkulu was 19% ahead of the same period last year. FFB production at the
Cenderung estates in Malaysia recorded a 20% increase over the same period last
year.
The group's total bought in crop was 23,044 mt higher than the first half of
2004. Again, the growth was not evenly spread between our three mills - the new
Blankahan mill began purchasing outside crop for the first time in February 2005
and the Bengkulu mill enjoyed the benefit of the increase in mill capacity from
40 mt/hour to 60 mt/hour in October 2004. Bought in crop at our Tasik mill fell
30% compared to the first half of 2004 in the face of stiff local competition.
Produce Prices
The CPO price fluctuated in a fairly narrow range between $395/mt and $440/mt
during the first half of 2005, averaging $417/mt. This compared less favourably
to the average price of $502/mt for the first half of 2004 and of $460/mt for
2004 as a whole. The average for the three months to September 2005 has been
$412/mt and the spot price has recently improved to $430/mt.
The rubber price, which was already high, strengthened steadily throughout the
first half of the year, from $1,183/mt to $1,554/mt. Cocoa prices were also very
favourable.
Development
The group's planted areas at 30 June 2005 were as follows:
Mature Immature Total
Ha ha Ha
North Sumatra 9,914 418 10,332
Bengkulu 9,739 3,094 12,833
Riau 3,992 57 4,049
--------- -------- -------
Indonesia 23,645 3,569 27,214
Malaysia 3,478 285 3,763
--------- -------- -------
Total: 30 June 2005 27,123 3,854 30,977
--------- -------- -------
Total: 31 December 2004 26,263 4,510 30,773
--------- -------- -------
Total: 30 June 2004 25,857 3,797 29,654
--------- -------- -------
New planting at Bengkulu amounted only to only 306 hectares. The progress was
slowed by protracted negotiations with local villagers for compensation. The
rate of planting has improved in recent weeks and it remains our aim to complete
the remaining 1,700 hectares in Bengkulu by the end of 2006.
From our initial application for 2,000 ha, we have obtained a formal right of
use over a further 760 hectares of land in Bina Pitri. This area has been
prepared ready for planting over the second half of 2005 and will bring Bina
Pitri to a total area of almost 5,000 ha. It is unlikely we shall be granted any
further rights in the neighbourhood of Bina Pitri in the near future.
Site preparation for a 40 mt/hr mill expandable to 60 mt/hr at Bina Pitri has
commenced. Completion is expected in mid 2007.
An oil palm seedling nursery has been established at Labuhan Bilik, the area in
North Sumatra acquired in December 2004. Following a survey, this area is now
estimated at 5,150 ha.
We continue to look for further opportunities in Indonesia.
International Accounting Standards
As mentioned above, the financial statements for the six months to 30 June 2005
have been prepared under IFRS and the comparative figures for 2004, which were
originally prepared under UK general accounting principles (UKGAAP), have been
re-stated accordingly. In summary, the results on the two bases are:
2005 2004 2004
6 months to 30 6 months to 30 Year to
June June 31 Dec
$'000 $'000 $'000
Profit before tax
- UKGAAP 7,174 12,031 24,808
- IFRS 7,640 12,528 27,098
EPS - basic
- UKGAAP 5.3p 9.6p 18.8p
- IFRS 5.7p 10.0p 20.6p
30 Jun 30 Jun 31 Dec 2004
2005 2004
Net asset value per share
- UKGAAP 152p 134p 135p
- IFRS 134p 116p 120p
Reconciliation between the results based on UKGAAP and IFRS are set out in Note
6 to the interim financial statements. There are five adjustments of which the
most significant are:
- a credit to profit and loss account for changes in value of
biological assets
- provision for deferred tax on the difference between the valuation of
fixed assets in the group balance sheet and the value of those assets
for local taxation purposes
Outlook
Crop output at the Indonesian estates, particularly Tasik, has shown improvement
in recent weeks. In the absence of any adverse circumstances, the group's FFB
and CPO output for 2005 (which is normally biased towards the second half of the
year) will set another record. If CPO prices stay at the same average price
witnessed in the first half, the second half results are expected to show
material improvement over the first half. While it is unlikely that the record
turnover and profit of the 2004 can be exceeded, and while recent increases in
fuel prices will have an adverse effect on operating costs, nevertheless I
expect the group to achieve a satisfactory result for the year.
Chan Teik Huat
Chairman and Chief Executive 28 September 2005
CONSOLIDATED INCOME STATEMENT
US DOLLARS STERLING
2005 2004 2004 2005 2004 2004
6 months 6 months year to 6 months 6 months year to
to 30 June to 30 June 31 Dec to 30 June to 30 June 31 Dec
(unaudited) restated restated (unaudited) restated restated
(unaudited) (unaudited) (unaudited) (audited)
Note $'000 $'000 $'000 £'000 £'000 £'000
Revenue 24,272 33,296 65,618 12,980 18,294 35,662
Cost of sales (15,266) (19,760) (38,499) (8,164) (10,857) (20,923)
-------- -------- -------- --------- --------- --------
Gross profit 9,006 13,536 27,119 4,816 7,437 14,739
Biological
asset
revaluation
movement 3 473 504 2,304 253 277 1,252
Administration
and other
expenses (1,595) (1,433) (2,185) (853) (787) (1,188)
Exchange
profits/(losses) 2 (121) 15 147 (65) 8 80
-------- -------- -------- --------- --------- --------
Operating
profit 7,763 12,622 27,385 4,151 6,935 14,883
Interest - receivable 149 108 251 80 59 136
- payable (332) (243) (612) (178) (134) (332)
- capitalised 60 41 74 32 23 40
-------- -------- -------- --------- --------- --------
Profit before
taxation 7,640 12,528 27,098 4,085 6,883 14,727
Foreign
corporation
tax (2,559) (3,040) (7,003) (1,368) (1,670) (3,806)
Foreign
withholding
tax (519) (171) (866) (278) (94) (471)
Deferred tax
adjustment 194 (787) (1,271) 103 (432) (691)
-------- -------- -------- --------- --------- --------
Profit for the
year 4,756 8,530 17,958 2,542 4,687 9,759
Minority
interests (all
equity
interests) (538) (1,334) (2,941) (288) (733) (1,598)
-------- -------- -------- --------- --------- --------
4,218 7,196 15,017 2,254 3,954 8,161
======== ======== ======== ========= ========= ========
Earnings per
share 10.7cts 18.2cts 37.9cts 5.7p 10.0p 20.6p
- basic
- diluted 10.6cts 18.1cts 37.8cts 5.6p 9.9p 20.5p
CONSOLIDATED BALANCE SHEET
US DOLLARS STERLING
Notes 2005 2004 2004 2005 2004 2004
30 June 30 June 31 Dec 30 June 30 June 31 Dec
(unaudited) restated restated (unaudited) restated restated
(unaudited) (unaudited) (unaudited) (unaudited)
$'000 $'000 $'000 £'000 £'000 £'000
Non current
assets
Biological
assets 3 24,485 22,313 24,012 13,678 12,328 12,506
Property,
plant and
equipment 106,885 94,962 103,290 59,713 52,465 53,797
-------- --------- -------- --------- --------- --------
131,370 117,275 127,302 73,391 64,793 66,303
-------- --------- -------- --------- --------- --------
Current
assets
Inventories 2,334 2,230 1,535 1,304 1,233 800
Trade and
other
receivables 2,639 4,171 3,778 1,474 2,304 1,968
Retirement
benefit 706 595 616 394 329 321
assets
Investments 397 355 405 222 196 211
Cash and cash
equivalents 9,333 6,127 14,933 5,214 3,385 7,778
-------- --------- -------- --------- --------- --------
15,409 13,478 21,267 8,608 7,447 11,078
-------- --------- -------- --------- --------- --------
Current
liabilities
Overdrafts (69) (20) (23) (39) (12) (12)
Other
borrowings (3,778) (3,621) (5,553) (2,110) (2,000) (2,892)
Trade and
other (4,594) (7,089) (9,123) (2,559) (3,917) (4,753)
payables -------- --------- -------- --------- --------- --------
(8,441) (10,730) (14,699) (4,708) (5,929) (7,657)
-------- --------- -------- --------- --------- --------
Net current
assets 6,968 2,748 6,568 3,900 1,518 3,421
-------- --------- -------- --------- --------- --------
Non-current
liabilities
Borrowings (4,713) (3,450) (5,558) (2,633) (1,906) (2,895)
Deferred
taxation (18,456) (14,507) (17,561) (10,311) (8,015) (9,147)
Retirement
benefit
liabilities (1,642) (1,326) (1,552) (917) (733) (808)
-------- --------- -------- --------- --------- --------
Net assets 113,527 100,740 109,199 63,430 55,657 56,874
======== ========= ======== ========= ========= ========
Equity
Called-up
share capital 15,481 15,319 15,424 9,984 9,895 9,952
Treasury
shares (1,387) - (1,387) (722) - (722)
Share premium
account 23,868 23,679 23,825 15,498 15,395 15,474
Share capital
redemption
reserve 1,087 1,087 1,087 663 663 663
Revaluation
and exchange
reserve (7,255) (7,739) (7,286) (6,897) (8,082) (8,876)
Retained
earnings 62,937 50,898 58,719 34,404 28,120 30,583
-------- --------- -------- --------- --------- --------
Shareholders'
funds - all
equity
interests 94,731 83,244 90,382 52,930 45,991 47,074
Minority
interests -
all equity
interests 18,796 17,496 18,817 10,500 9,666 9,800
-------- --------- -------- --------- --------- --------
Total capital
employed 113,527 100,740 109,199 63,430 55,657 56,874
======== ========= ======== ========= ========= ========
CONSOLIDATED CASH FLOW STATEMENT
US DOLLARS STERLING
2005 2004 2004 2005 2004 2004
6 months 6 months year to 6months 6 months year to
to 30 June to 30 June 31 Dec to 30 June to 30 June 31 Dec
(unaudited) restated restated (unaudited) restated restated
$'000 (unaudited) (unaudited) £'000 (unaudited) (unaudited)
$'000 $'000 £'000 £'000
Profit before
tax 7,640 12,528 27,098 4,085 6,883 14,727
Adjustments
for;
Interest
receivable (149) (108) (251) (80) (59) (136)
Interest
payable 272 202 538 146 111 292
Depreciation 1,926 1,475 2,917 1,030 810 1,585
Profit on sale
of fixed
assets (35) (6) (17) (19) (3) (9)
Movement in
value of
biological
assets (473) (504) (2,304) (253) (277) (1,252)
Movement in
market value
of investments 7 (41) (91) 4 (23) (49)
Foreign
exchange (254) (508) 163 292 (428) (476)
-------- --------- -------- --------- --------- --------
Operating cash
flow before
changes in
working
capital 8,934 13,038 28,053 5,205 7,014 14,682
(Increase)/dec
rease in
inventories (798) (517) 178 (427) (284) 97
Decrease/(incr
ease) in trade
and other
receivables 177 (1,610) 57 95 (855) 31
Increase in
trade and
other payables 218 2,671 810 117 1,468 440
-------- --------- -------- --------- --------- --------
Cash inflow
from operating
activities 8,531 13,582 29,098 4,990 7,343 15,250
Interest (332) (243) (612) (178) (134) (334)
paid
Overseas tax
paid (6,587) (4,373) (6,928) (3,522) (2,403) (3,766)
-------- --------- -------- --------- --------- --------
Net cash flow
from operating
activities 1,612 8,966 21,558 1,290 4,806 11,150
-------- --------- -------- --------- --------- --------
Investing
activities
Property,
plant and
equipment
- purchase (4,073) (4,475) (11,247) (2,178) (2,459) (6,111)
- sale 68 7 112 36 4 61
Purchase of
subsidiary - (9,575) (4,777) - (5,261) (2,596)
Interest 149 108 251 80 59 136
paid -------- --------- -------- --------- --------- --------
Net cash used
in investing
activities (3,856) (13,935) (15,661) (2,062) (7,657) (8,510)
-------- --------- -------- --------- --------- --------
Financing
activities
Dividends paid
by parent
company - (2,375) (2,375) - (1,305) (1,291)
Share options
exercised 100 - 251 53 - 136
Purchase of
own shares - (1,387) - - (754)
Repayment of
existing long
term loans (2,585) (1,011) (2,023) (1,382) (555) (1,100)
Repayment of
loans in newly
acquired
subsidiary - (4,154) - - (2,258)
Drawdown of
new long term
loan - 5,000 - - 2,717
Finance lease
(repayment) /
drawdown (35) (9) (15) (19) (5) (8)
Dividends paid
to minority
shareholders (2,028) (637) (699) (1,084) (350) (379)
Repayment
by/(advance)
to minority
shareholders 693 - (693) 371 - (377)
Subscriptions
to subsidiary
share capital
by minority
shareholders 453 - - 242 - -
-------- --------- -------- --------- --------- --------
Net cash used
in financing
activities (3,402) (4,032) (6,095) (1,819) (2,215) (3,314)
-------- --------- -------- --------- --------- --------
(Decrease) in
cash and cash
equivalents (5,646) (9,001) (198) (2,591) (5,066) (674)
Cash and cash
equivalents
less
overdrafts
At beginning
of period 14,910 15,108 15,108 7,766 8,439 8,439
-------- --------- -------- --------- --------- --------
At end of
period 9,264 6,107 14,910 5,175 3,373 7,765
======== ========= ======== ========= ========= ========
Analysis of
net cash/
(debt)
Cash 9,333 6,127 14,933 5,214 3,385 7,778
Overdrafts (69) (20) (23) (39) (12) (13)
-------- --------- -------- --------- --------- --------
9,264 6,107 14,910 5,175 3,373 7,765
Borrowings due
within one
year (3,761) (3,621) (5,535) (2,101) (2,000) (2,891)
Borrowings due
after one year (4,713) (3,380) (5,524) (2,633) (1,867) (2,868)
Finance leases (18) (70) (52) (10) (39) (27)
-------- --------- -------- --------- --------- --------
772 (964) 3,799 431 (533) 1,979
======== ========= ======== ========= ========= ========
STATEMENT OF CHANGES IN EQUITY FOR THE YEAR ENDED 31 DECEMBER 2004 AND FOR THE
SIX MONTHS ENDED 30 JUNE 2005 (restated and unaudited)
Attributable to equity holders of the parent
Share Revaluation
capital and
Share Treasury Share redemption exchange Retained Total
capital shares premium reserve reserve earnings
$'000 $'000 $'000 $'000 $'000 $'000 $'000
Balance at 31
December 2003 15,319 - 23,679 1,087 5,375 43,702 89,162
Changes in
accounting
policy - - - - (11,419) 2,375 (9,044)
------- ------ ------- -------- -------- -------- -------
Restated
balance 15,319 - 23,679 1,087 (6,044) 46,077 80,118
Changes in equity
for 2004
Surplus/(defic
it) on
revaluation of
estates - - - - 8,280 - 8,280
Deferred tax
on revaluation - - - - (3,498) - (3,498)
(Loss)/profit
on exchange
translation - - - - (6,024) - (6,024)
------- ------ ------- -------- -------- -------- -------
Net income
recognised
directly in
equity 15,319 - 23,679 1,087 (7,286) 46,077 78,876
Profit for
period - - - - - 15,017 15,017
------- ------ ------- -------- -------- -------- -------
Total
recognised
income and
expense for
the period 15,319 - 23,679 1,087 (7,286) 61,094 93,893
Dividends paid - - - - - (2,375) (2,375)
Share capital
subscription 105 - 146 - - - 251
Purchase of
treasury
shares - (1,387) - - - - (1,387)
Purchase of - - - - - - -
interest in a
subsidiary
------- ------ ------- -------- -------- -------- -------
Balance at 31
December 2004 15,424 (1,387) 23,825 1,087 (7,286) 58,719 90,382
Changes in equity
for six months to
30 June 2005
Surplus/(defic
it) on
revaluation of
estates - - - - 4,491 - 4,491
Deferred tax
on revaluation - - - - (1,039) - (1,039)
Loss)/profit
on exchange
translation - - - - (3,421) - (3,421)
------- ------ ------- -------- -------- -------- -------
Net income
recognised
directly in
equity 15,424 (1,387) 23,825 1,087 (7,255) 58,719 90,413
Profit for
period - - - - - 4,218 4,218
------- ------ ------- -------- -------- -------- -------
Total
recognised
income and
expense for
the period 15,424 (1,387) 23,825 1,087 (7,255) 62,937 94,631
Dividends paid - - - - - - -
Share capital
subscription 57 - 43 - - - 100
------- ------ ------- -------- -------- -------- -------
Balance at 31
June 2005 15,481 (1,387) 23,868 1,087 (7,255) 62,937 94,731
------- ------ ------- -------- -------- -------- -------
STATEMENT OF CHANGES IN EQUITY FOR THE YEAR ENDED 31 DECEMBER 2004 AND FOR THE
SIX MONTHS ENDED 30 JUNE 2005 (restated and unaudited) (continued)
Minority Total
interests equity
$'000 $'000
Balance at 31 December 2003 19,229 108,391
Changes in accounting policy (2,323) (11,367)
-------- ---------
Restated balance 16,906 97,024
Changes in equity for 2004
Surplus/(deficit) on revaluation of
estates 1,894 10,174
Deferred tax on revaluation (680) (4,178)
(Loss)/profit on exchange translation (1,491) (7,515)
-------- ---------
Net income recognised directly in equity 16,629 95,505
Profit for period 2,694 17,711
-------- ---------
Total recognised income and expense for
the period 19,323 113,216
Dividends paid (1,622) (3,997)
Share capital subscription - 251
Purchase of treasury shares - (1,387)
Purchase of interest in a subsidiary 1,116 1,116
-------- ---------
Balance at 31 December 2004 18,817 109,199
Changes in equity for six months to 30 June
2005
Surplus/(deficit) on revaluation of
estates 1,039 5,530
Deferred tax on revaluation (166) (1,205)
Loss)/profit on exchange translation (810) (4,231)
-------- ---------
Net income recognised directly in equity 18,880 109,293
Profit for period 522 4,740
-------- ---------
Total recognised income and expense for
the period 19,402 114,033
Dividends paid (1,059) (1,059)
Share capital subscription 453 553
-------- ---------
Balance at 31 June 2005 18,796 113,527
-------- ---------
STATEMENT OF CHANGES IN EQUITY FOR THE SIX MONTHS ENDED 30 JUNE 2004 (restated
and unaudited)
Attributable to equity holders of the parent
Share Revaluation
capital and
Share Treasury Share redemption exchange Retained Total
capital shares premium reserve reserve earnings
$'000 $'000 $'000 $'000 $'000 $'000 $'000
Balance at 31
December 2003 15,319 - 23,679 1,087 5,375 43,702 89,162
Changes in
accounting
policy - - - - (11,419) 2,375 (9,044)
------- ------- ------- -------- -------- ------- ------
Restated
balance 15,319 - 23,679 1,087 (6,044) 46,077 80,118
Changes in equity
for six months to
30 June 2004
Surplus/(deficit)
on revaluation of
estates - - - - 6,087 - 6,087
Deferred tax
on revaluation - - - - (998) - (998)
(loss)/profit
on exchange
translation - - - - (6,784) - (6,784)
------- ------- ------- -------- -------- ------- ------
Net income
recognised
directly in
equity 15,319 - 23,679 1,087 (7,739) 46,077 78,423
Profit for
period - - - - - 7,196 7,196
------- ------- ------- -------- -------- ------- ------
Total
recognised
income and
expense for
the period 15,319 - 23,679 1,087 (7,739) 53,273 85,619
Dividend paid - - - - - (2,375) (2,375)
------- ------- ------- -------- -------- ------- ------
Balance at 30
June 2004 15,319 - 23,679 1,087 (7,739) 50,898 83,244
------- ------- ------- -------- -------- ------- ------
Minority Total
interests equity
$'000 $'000
Balance at 31 December 2003 19,229 108,391
Changes in accounting policy (2,323) (11,367)
-------- ---------
Restated balance 16,906 97,024
Changes in equity for six months to 30 June
2004
Surplus/(deficit) on revaluation of
estates 1,110 7,197
Deferred tax on revaluation (83) (1,081)
(loss)/profit on exchange translation (1,743) (8,527)
-------- ---------
Net income recognised directly in equity 16,190 94,613
Profit for period 1,306 8,502
-------- ---------
Total recognised income and expense for
the period 17,496 103,115
Dividend paid - (2,375)
-------- ---------
Balance at 30 June 2004 17,496 100,740
-------- ---------
NOTES TO THE INTERIM STATEMENTS
1. Basis of preparation of interim financial statements and adoption of
International Financial Reporting Standards
The financial information in this statement does not constitute full statutory
accounts within the meaning of Section 240 of the Companies Act 1985. Full
statutory accounts for the year ended 31 December 2004 incorporating an
unqualified auditors' report have been delivered to the Registrar of Companies.
The interim statements for the six months ended 30 June 2005 and 30 June 2004
are unaudited. Those for the six months ended 30 June 2005 were approved by the
board on 28 September 2005. The results are prepared in accordance with those
International Financial Reporting Standards (IRFS) which are expected to be
endorsed by the European Union and to apply to the 2005 full year results. The
financial statements for the year ended 31 December 2004 and for the six months
ended 30 June 2004 were originally prepared under generally accepted UK
accounting policies (UKGAAP). The comparative figures for the year ended 31
December 2004 are an extract from the financial statements for the year and,
together with the financial statements for the six months ended 30 June 2004,
have been restated to comply with IFRS. These adjustments, which have not been
audited, are set out in Note 6 of this statement and comprise:
a) Biological assets: IAS41 requires separate balance sheet disclosure of the
value biological assets and requires a charge or credit to profit and loss
account for changes in value of those biological assets. This adjustment is
referred to as' BA adjustment' in Note 6. Under UKGAAP biological assets were
not separately identified and no charge or credit was made in respect of
movement in their value. The effect of the restatements relating to biological
assets is stated in Note 3.
b) Deferred tax: IAS 12 requires tax to be provided on the surplus of the fixed
asset valuations over local tax carrying values of those assets. While in
previous periods this figure has been included only as a note in the financial
statements, its inclusion in the balance sheet at 30 June 2005 results in a
reduction in reported net asses of $19,125,000. At 31 December 2004 and 30 June
2004 the respective reductions were $17,920,000 and $14,823,000.
c) Share options: IFRS 2 requires the fair value of employee share options
issued since November 2002 and outstanding at the relevant balance sheet date to
be expensed over the vesting period of those options. No such charge was made
under UKGAAP. The effect of these adjustments is not significant.
d) Employee retirement liabilities: The group has always provided in full for
the unfunded liabilities under its various pension and retirement benefits
schemes. Contrary to practice under UKGAAP, IAS19 requires the assets of any
separately funded scheme to be included in the balance sheet. The assets of the
defined benefit scheme for labour in Indonesia have therefore been included in
the balance sheet. This has no effect on net asset value.
e) Dividends: IAS 10, which deals with post balance sheet events, requires
dividends not declared by the year end be excluded from the results. Previously,
proposed dividends not declared by the year end were included as a deduction
from profit in the year prior to being declared at the subsequent annual general
meeting. Where dividends have risen in consecutive years, as is the case
recently for the group, the effect of replacing a provision for a proposed
dividend with actual dividends paid is to increase slightly the reported net
asset value of the group.
2. Exchange profits/(losses)
2005 2004 2004
6 months 6 months year to
to 30 June to 30 June 31 Dec
(unaudited) (unaudited) (audited)
$'000 $'000 $'000
Average exchange rates
Rp:$ 9,444 8,793 9,001
$:£ 1.87 1.65 1.84
RM:$ 3.80 3.80 3.80
Closing exchange rates
Rp:$ 9,713 9,415 9,290
$:£ 1.79 1.79 1.92
RM:£ 3.80 3.80 3.80
At 30 June 2005, there was an exchange translation deficit of $182,000 (30 June
2004: (deficit) $(130,000)) arising on net third party US dollar borrowings by
two Indonesian subsidiaries; in view of the unpredictability of the rupiah/
dollar exchange rate, this was held in exchange reserves at 30 June 2005 pending
determination of the final profit or loss at 31 December 2005.
3. Biological assets
Group fixed assets continued to be valued in total on the same 'value in use'
basis as in previous years. Within this total, the value of biological assets
has been estimated separately and, as required by IAS 41, the movement in value
of biological assets has been, credited in the periods in question, to profit
and loss account. In the half years ended 30 June 2005 and 2004 the credits
before tax were $473,000 and $504,000 respectively. In the year to 30 December
2004 the credit was considerably larger, at $2,304,000, reflecting the
relatively large increase in valuation of fixed assets in 2004 as a whole.
4. Dividend
The final and only dividend in respect of 2004, amounting to 8.0cts per share,
or $3,147,000, was paid on 6 July 2005. (2003: 6cts per share $2,375,000 8 June
2004).
5. Shares in issue
US DOLLARS
2005 2004 2004
6 months 6 months year to
to 30 June to 30 June 31 Dec
(unaudited) (unaudited) (audited)
$'000 $'000 $'000
Average for purposes of calculating
EPS 39,359 39,581 39,609
At period end 39,460 39,581 39,336
468,000 shares held in Treasury from December 2004 excluded from above
figures.
6. Restatement adjustments arising from introduction of IFRS (unaudited)
Figures in brackets = (credit)
Reference letters refer to the description of the adjustments set out in Note 1
INCOME STATEMENT 6mths to 30 Jun 2005
-----------------------
UKGAAP Ref IFRS adjustments IFRS
$'000 $'000
Profit before tax and BA adjustment (7,174) c 7 (7,167)
BA adjustment - a (473) (473)
-------- --------- -------
Profit before tax (7,174) (466) (7,640)
Taxation
-------- --------- -------
Corporation tax 3,078 - 3,078
Deferred tax (336) a 142 (194)
-------- --------- -------
2,742 142 2,884
-------- --------- -------
Profit after tax (4,432) (324) (4,756)
Minority interests 522 a 16 538
-------- --------- -------
Distributable profit (3,910) (308) (4,218)
Dividends - - -
-------- --------- -------
Retained (3,910) (308) (4,218)
======== ========= =======
6. Restatement adjustments arising from introduction of IFRS (unaudited)
(Continued)
BALANCE SHEET 30 June 2005
-----------------------
UKGAAP Ref IFRS
$'000 $'000
Non current assets
Biological assets - a 24,485 24,485
Property, plant and equipment 131,370 a (24,485) 106,885
-------- --------- -------
131,370 - 131,370
-------- --------- -------
Inventories 2,334 - 2,334
Trade and other receivables 2,639 - 2,639
Retirement benefit assets - d 706 706
Investments 397 - 397
Cash and cash equivalents 9,333 - 9,333
-------- --------- -------
14,703 706 15,409
-------- --------- -------
Current assets
Overdrafts (69) - (69)
Other borrowings (3,778) - (3,778)
Trade and other payables (8,656) c (21) (4,594)
d 936
e 3,147
-------- --------- -------
Current liabilities (12,503) 4,062 (8,441)
-------- --------- -------
Net current assets 2,200 4,768 6,968
Long term borrowings (4,713) - (4,713)
Deferred tax 669 b (19,125) (18,456)
Employee retirement benefit liabilities - d (1,642) (1,642)
-------- --------- -------
Net assets 129,526 (15,999) 113,527
======== ========= =======
Share capital (15,481) (15,481)
Treasury shares 1,387 1,387
Share premium (23,868) (23,868)
Capital redemption reserve (1,087) (1,087)
Revaluation and exchange reserve (10,383) a 1,681 7,254
15,956
Profit and loss account - b/f (54,219) a (1,367) (58,719)
c 14
e (3,147)
- year (3,910) (308) (4,218)
-------- --------- -------
(107,561) 12,830 (94,731)
Minority interest (21,965) 3,169 (18,796)
-------- --------- -------
(129,526) 15,999 (113,527)
======== ========= =======
6. Restatement adjustments arising from introduction of IFRS (unaudited)
(Continued)
INCOME STATEMENT 6mths to 30 Jun 2004
-----------------------
UKGAAP Ref IFRS adjustments IFRS
$'000 $'000
Profit before tax and BA adjustment (12,031) c 7 (12,024)
BA adjustment - a (504) (504)
-------- --------- -------
Profit before tax (12,031) (497) (12,528)
Taxation
-------- --------- -------
Corporation tax 3,211 - 3,211
Deferred tax 636 a 151 787
-------- --------- -------
3,847 151 3,998
-------- --------- -------
Profit after tax (8,184) (346) (8,530)
Minority interests 1,306 a 27 1,333
-------- --------- -------
Distributable profit (6,878) (318) (7,196)
Dividends - 2,375 2,375
-------- --------- -------
Retained (6,878) 2,057 (4,821)
======== ========= =======
BALANCE SHEET 30 June 2004
-----------------------
UKGAAP Ref IFRS
$'000 $'000
Non current assets
Biological assets - a 22,313 22,313
Property, plant and equipment 117,275 a (22,313) 94,962
-------- --------- -------
117,275 - 117,275
-------- --------- -------
Inventories 2,230 2,230
Trade and other receivables 4,171 - 4,171
Retirement benefit assets - d 595 595
Investments 355 - 355
Cash and cash equivalents 6,127 - 6,127
-------- --------- -------
12,883 595 13,478
-------- --------- -------
Current assets
Overdrafts (20) - (20)
Other borrowings (3,621) - (3,621)
Trade and other payables (7,813) c (7) (7,089)
d 731
-
-------- --------- -------
Current liabilities (11,454) 724 (10,730)
-------- --------- -------
Net current assets 1,429 1,319 2,748
Long term borrowings (3,450) - (3,450)
Deferred tax 316 b (14,823) (14,507)
Employee retirement benefit liabilities - d (1,326) (1,326)
-------- --------- -------
Net assets 115,570 (14,830) 100,740
======== ========= =======
6. Restatement adjustments arising from introduction of IFRS (unaudited)
(Continued)
Share capital (15,319) (15,319)
Treasury shares 0 0
Share premium (23,679) (23,679)
Capital redemption reserve (1,087) (1,087)
Revaluation and exchange reserve (5,003) a 325 7,739
b 12,417
Profit and loss account - b/f (43,702) e (2,375) (46,077)
- year (6,878) 2,057 (4,821)
-------- --------- -------
(95,668) 12,424 (83,244)
Minority interest (19,902) 2,406 (17,496)
-------- --------- -------
(115,570) 14,830 (100,740)
======== ========= =======
INCOME STATEMENT Year to 31 December 2004
-----------------------
UKGAAP Ref IFRS adjustments IFRS
$'000 $'000
Profit before tax and BA adjustment (24,808) c 14 (24,794)
BA adjustment - a (2,304) (2,304)
-------- --------- -------
Profit before tax (24,808) (2,290) (27,098)
Taxation
-------- --------- -------
Corporation tax 7,869 - 7,869
Deferred tax 581 a 691 1,272
-------- --------- -------
8,450 691 9,141
-------- --------- -------
Profit after tax (16,358) (1,599) (17,957)
Minority interests 2,694 a 247 2,941
-------- --------- -------
Distributable profit (13,664) (1,352) (15,017)
Dividends 3,147 e (773) 2,375
-------- --------- -------
Retained (10,517) (2,125) (12,642)
======== ========= =======
6. Restatement adjustments arising from introduction of IFRS (unaudited)
(Continued)
BALANCE SHEET 31 December 2004
-----------------------
UKGAAP Ref IFRS
$'000 $'000
Non current assets
Biological assets - a 24,012 24,012
Property, plant and equipment 127,302 a (24,012) 103,290
-------- --------- -------
127,302 - 127,302
-------- --------- -------
Inventories 1,535 - 1,535
Trade and other receivables 3,778 - 3,778
Retirement benefit assets - d 616 616
Investments 405 - 405
Cash and cash equivalents 14,933 - 14,933
-------- --------- -------
20,651 616 21,267
-------- --------- -------
Current assets
Overdrafts (23) - (23)
Other borrowings (5,553) - (5,553)
Trade and other payables (13,192) c (14) (9,123)
d 936
e 3,147
-------- --------- -------
Current liabilities (18,768) 4,069 (14,699)
-------- --------- -------
Net current assets 1,883 4,685 6,568
Long term borrowings (5,558) - (5,558)
Deferred tax 359 b (17,920) (17,561)
Employee retirement benefit liabilities - d (1,552) (1,552)
-------- --------- -------
Net assets 123,986 (14,787) 109,199
======== ========= =======
Share capital (15,424) (15,424)
Treasury shares 1,387 1,387
Share premium (23,825) (23,825)
Capital redemption reserve (1,087) (1,087)
Revaluation and exchange reserve (8,998) a 1,367 7,286
b 14,917
Profit and loss account - b/f (43,702) e (2,375) (46,077)
- year (10,517) (2,125) (12,642)
-------- --------- -------
(102,166) 11,784 (90,382)
Minority interest (21,820) 3,003 (18,817)
-------- --------- -------
(123,986) 14,787 (109,199)
======== ========= =======
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