Half Yearly Report
M.P. EVANS GROUP PLC
M.P. Evans Group PLC, a producer of Indonesian palm oil and Australian beef cattle, announces its unaudited interim results for the six months ended 30 June 2010.
Financials
· Profit after tax up 29% at US$12.04 million (2009 US$9.35 million)
· Increase in profit attributable to higher palm-oil prices and sharply-improved
cattle-trading results from NAPCo
· Interim dividend maintained at 2.00p per share
· Earnings per share up 31.8% at US cents 19.54 (2009 US cents 14.83) on
continuing and discontinued operations
Indonesian palm oil
· Palm-oil prices have strengthened by some 15% since 30 June 2010
· Total oil-palm plantings on new Indonesian projects now 14,500 hectares;
4,000 of these relate to smallholders' co-operatives
Australian beef cattle
· NAPCo's improved results followed beneficial rainfall, excellent
pasture growth and robust cattle prices
· Woodlands recorded a loss but improved outturn expected in second half
Commenting on the results, the chairman, Peter Hadsley-Chaplin, said:-
"A pleasing increase in profits was recorded this year following healthy palm-oil and cattle prices and a much improved season in Australia. The outlook for both palm oil and beef cattle appears favourable for both the short and longer term."
Enquiries
M.P. Evans Group PLC 020 7796 4133 on 14 September 2010 only
Thereafter telephone 01892 516333
Peter Hadsley-Chaplin Chairman
Philip Fletcher Managing director
Tristan Price Finance director
Panmure Gordon 020 7459 3600
Edward Farmer
Rakesh Sharma
Hudson Sandler 020 7796 4133
Charlie Jack
An analysts' meeting will be held today at 9:30 a.m. at the offices of Hudson Sandler, 29 Cloth Fair, London EC1A 7NN
OVERVIEW
A profit after tax of US$12.04 million for the six months ended 30 June 2010 was recorded, a 29% increase over that for the first half of 2009. This significant increase arose primarily from stronger palm-oil prices and markedly-improved results at The North Australian Pastoral Company Pty Limited ("NAPCo") further to beneficial rain earlier in the year and consequent good pasture growth, along with increased prices for beef cattle. As last year, the board proposes that an interim dividend of 2 pence per share will be paid. The board has decided to make a scrip dividend available for this interim dividend. Shareholders who have previously elected to receive their dividends in this manner will therefore automatically receive this dividend as scrip. Shareholders who now wish to make an election to receive this and future dividends as scrip should contact the company secretary.
STRATEGIC DEVELOPMENTS, INCLUDING NEW PROJECTS
Indonesian palm oil
Progress has continued with planting on the new Indonesian projects, albeit at a slower pace than in 2009. As at the date of this report, 14,500 hectares in total have been planted, 11,100 in Kalimantan and 3,400 in Bangka. Of these areas, 4,000 have been allocated to smallholder schemes, 2,800 in Kalimantan and 1,200 in Bangka. It is hoped that the pace of planting will pick up, particularly in Bangka, in the remainder of the year. As in the past, the agreement of mutually-acceptable terms with smallholders is proving to be a time-consuming process and is the main constraint in progressing with planting. The Group increased its holding in PT Agro Muko during the period, and now holds 36.84%.
Australian beef cattle
The board continues to seek to build on its holding in NAPCo, although no further shares were acquired in the first half of 2010. Construction work on the expansion of NAPCo's feedlot is scheduled to commence shortly and is likely to take some nine months to complete. The increased capacity will give rise to greater economies of scale and will help to reduce the risks associated with the uncertainty of the seasons experienced across the company's properties. Improvement work at Woodlands has been largely completed and a significant increase in cattle turnover is expected. It remains, however, the long-term aim to sell Woodlands and to focus on the Group's investment in NAPCo.
Divestment from Malaysia and Thailand
To date, approximately US$110 million has been raised from the disposal of the Malaysian plantations and other assets. The board estimates that the remaining assets are worth approximately a further US$50 million. The majority of this relates to the Group's 40% shareholding in Bertam Properties Sdn. Bhd. ("Bertam Properties") and the 70-hectare Bertam Estate. It is the board's intention to dispose of these at the most opportune time.
THE PALM-OIL MARKET
The average selling price of crude palm oil (Rotterdam c.i.f.) was US$809 per tonne for the period compared with US$656 for the same period last year and US$680 for the whole of 2009. The world stock/usage ratio remained reasonably low and the continuation of strong demand kept the price up, notwithstanding good soybean crops in the Southern Hemisphere. Palm-oil prices have strengthened since 30 June 2010 and now stand at around US$900 per tonne.
THE BEEF-CATTLE MARKET
Australian prices for grass-fed, lighter-weight cattle (such as those produced by Woodlands), rose sharply during the first half of 2010 as the excellent season experienced across much of Australia lifted demand for young cattle. Prices for the heavier, "grain-finished" cattle (such as those produced by NAPCo) also increased markedly during the period under review following a general improvement in world beef prices, stemming from a significant downsizing of cattle numbers, particularly in Australia and the United States. Since the period end, lighter-weight prices have continued to strengthen, whilst prices for the heavier, grain-finished cattle have eased, mainly as a result of the stronger Australian Dollar. World beef prices in US-Dollar terms, however, are at robust levels.
RESULTS FOR THE PERIOD
MAJORITY-OWNED OPERATIONS
Indonesia
The Group took over management of the majority-owned North Sumatran estates on 1 January 2010. As referred to above, palm-oil prices were significantly stronger in the first half of 2010 than in the same period in 2009. Crops of oil-palm fresh fruit bunches ("f.f.b.") from these estates were slightly ahead of those for the same period last year. The crop from the new Bangka project is on a sharply-upward trend, as would be expected from newly-developed areas. The yield per hectare for the first half of 2010 was 5.25 tonnes, a very acceptable level. The extraction rate achieved by Pangkatan mill pleasingly continued to improve, up to 23.0%, which compared with 22.3% for the first six months of 2009. The strength of the Indonesian Rupiah has adversely affected costs in US-Dollar terms. As a result of the above, the gross profit from the majority-owned Indonesian estates amounted to US$8.78 million compared with US$5.46 million for the first half of 2009. It should be noted that management fees paid in 2009 to the third-party managers, PT Tolan Tiga Indonesia, were treated as part of "cost of sales", whereas, as previously, costs incurred in the new Jakarta office by the wholly-owned, in-house management company, PT Evans Indonesia, are, from 1 January 2010, regarded as "other administrative expenses".
Crop, production and selling-price details for the majority-owned estates are set out as follows:-
6 months 6 months Year
ended ended ended
30 June 30 June 31 December
2010 2009 2009
Tonnes Tonnes Tonnes
1) Crops - oil-palm fresh
fruit bunches ("f.f.b.")
Sumatran estates
- Pangkatan group 55,800 54,900 121,100
- Simpang Kiri 19,800 17,700 38,500
------- ------- -------
75,600 72,600 159,600
Banka 7,500 4,100 11,700
------- ------- -------
Total 83,100 76,700 171,300
------- ------- -------
2) Production
- (Pangkatan mill)
Crude palm oil 12,800 12,200 27,000
Palm kernels 3,100 3,100 6,800
------- ------- -------
3) Extraction rate % % %
Crude palm oil 23.0 22.3 22.4
Palm kernels 5.5 5.7 5.6
------- ------- -------
4) Selling prices
Palm oil - Rotterdam c.i.f.
- average per tonne US$809 US$656 US$680
------- ------- -------
Australia
Following the good start to the season on Woodlands with plentiful rain, the herd has gradually been built up from 3,700 head at the end of December 2009 to 7,900 at the end of June 2010. During this building phase, no cattle were sold. Overheads, many of which are fixed, were similar in Australian-Dollar terms in each of the half years ended 30 June 2009 and 2010 but the considerable (20%) weakening of the average rate for the US Dollar from US$1 = A$1.41 to US$1 = A$1.12 resulted in higher costs in US-Dollar terms. Further to the Group's decision to cease its grain-growing activities, the sales of sorghum in the first half of 2009 were not repeated in the first half of 2010. As a result of the above, the gross loss amounted to US$0.40 million for the first half of 2010 compared with US$0.25 million for the same period in 2009. However, with the anticipated weight gain in the second half and subject to the current healthy cattle prices being maintained, an improved outturn is hoped for in the second half of the year and therefore for the year as a whole.
GROSS PROFIT
As a result of all of the above, the gross profit on continuing operations for the first half of 2010 was US$8,251,000, a 59% increase over the US$5,190,000 for the same period last year. The following table sets out an analysis of the gross profit/(loss) between the various activities and between the countries in which the Group operates.
Six months ended 30 June 2010
Biological
Cost of bearer-asset Gross
Turnover sales adjustment profit/(loss)
US$'000 US$'000 US$'000 US$'000
Plantations
Indonesia 14,973 (6,652) 458 8,779
Malaysia 360 (492) - (132)
------ ------ ------ ------
Total plantations 15,333 (7,144) 458 8,647
Cattle - Australia - (396) - (396)
Other - UK - - - -
------ ------ ------ ------
Group total 15,333 (7,540) 458 8,251
------ ------ ------ ------
Six months ended 30 June 2009
Biological
Cost of bearer-asset Gross
Turnover sales adjustment profit/(loss)
US$'000 US$'000 US$'000 US$'000
Plantations
Indonesia 10,896 (5,591) 154 5,459
Malaysia 242 (288) - (46)
------ ------ ------ ------
Total plantations 11,138 (5,879) 154 5,413
Cattle - Australia 760 (1,005) - (245)
Other - UK 22 - - 22
------ ------ ------ ------
Group total 11,920 (6,884) 154 5,190
------ ------ ------ ------
Year ended 31 December 2009
Biological
Cost of bearer-asset Gross
Turnover sales adjustment profit/(loss)
US$'000 US$'000 US$'000 US$'000
Plantations
Indonesia 25,554 (12,892) 481 13,143
Malaysia 561 (729) - (168)
------ ------ ------ ------
Total plantations 26,115 (13,621) 481 12,975
Cattle - Australia 2,231 (3,546) - (1,315)
Other - UK 45 - - 45
------ ------ ------ ------
Group total 28,391 (17,167) 481 11,705
------ ------ ------ ------
BIOLOGICAL BEARER-ASSET ADJUSTMENT
Oil palms are treated as "biological bearer assets" since they are harvested for many years. The value of biological assets increased by US$10,900,000 largely as a result of a rise in the price of crude palm oil used to establish biological value, supported by some further new planting on the Group's new projects in Kalimantan. Movements in the value of biological assets from one period to the next are included in the consolidated income statement. In order to provide additional information to readers of the accounts, the consolidated income statement and balance sheet include additional columns to show the Group's results and assets prior to the adjustment for biological bearer assets.
ASSOCIATED COMPANIES
Indonesia
The Group's share of its Indonesian associated companies' post-tax profits for the period, compared with that for the first half, and for the whole, of 2009, was as follows:-
Six months ended 30 June 2010
Post-tax Post-tax
profit before Biological profit after
biological bearer-asset biological
bearer-asset adjustment bearer-asset
adjustment (see below) adjustment
US$'000 US$'000 US$'000
PT Agro Muko (36.84%)* 3,377 865 4,242
PT Kerasaan Indonesia (38.00%) 808 (184) 624
------ ------ ------
4,185 681 4,866
------ ------ ------
Six months ended 30 June 2009
Post-tax Post-tax
profit before Biological profit after
biological bearer-asset biological
bearer-asset adjustment bearer-asset
adjustment (see below) adjustment
US$'000 US$'000 US$'000
PT Agro Muko (36.84%)* 1,299 1,652 2,951
PT Kerasaan Indonesia (38.00%) 622 207 829
------ ------ ------
1,921 1,859 3,780
------ ------ ------
Year ended 31 December 2009
Post-tax Post-tax
profit before Biological profit after
biological bearer-asset biological
bearer-asset adjustment bearer-asset
adjustment (see below) adjustment
US$'000 US$'000 US$'000
PT Agro Muko (36.84%)* 5,992 2,432 8,424
PT Kerasaan Indonesia (38.00%) 1,399 260 1,659
------ ------ ------
7,391 2,692 10,083
------ ------ ------
* increased from 31.53% in March 2010
Biological bearer-asset adjustment
30 June 2010
PT Agro PT Kerasaan
Muko Indonesia
US$'000 US$'000
Cost of sales 153 19
Gain on biological assets 2,174 (22)
Planting expenditure (1,173) (243)
Deferred tax (289) 62
-------- --------
865 (184)
-------- --------
30 June 2009
PT Agro PT Kerasaan
Muko Indonesia
US$'000 US$'000
Cost of sales 913 77
Gain on biological assets 669 (6)
Planting expenditure (268) (18)
Deferred tax 338 154
-------- --------
1,652 207
-------- --------
31 December 2009
PT Agro PT Kerasaan
Muko Indonesia
US$'000 US$'000
Cost of sales 441 12
Gain on biological assets 2,491 223
Planting expenditure (578) (112)
Deferred tax 78 137
-------- --------
2,432 260
-------- --------
Crops and production were as follows:-
6 months 6 months Year
ended ended ended
30 June 30 June 31 December
2010 2009 2009
Tonnes Tonnes Tonnes
Crops - f.f.b.
- PT Agro Muko - own 140,700 144,400 328,200
- outgrowers 5,000 5,400 23,000
- PT Kerasaan Indonesia 24,000 24,100 52,000
-------- -------- --------
169,700 173,900 403,200
-------- -------- --------
Production
(PT Agro Muko) - crude palm oil 34,600 34,400 79,400
- palm kernels 7,700 7,900 18,200
-------- -------- --------
% % %
Extraction rate - crude palm oil 22.7 22.9 22.6
- palm kernals 5.0 5.3 5.2
------- ------- -------
Tonnes Tonnes Tonnes
Rubber crops
(PT Agro Muko) 742 736 1,221
-------- -------- --------
The Group increased its holding in PT Agro Muko ("Agro Muko") from 31.53% to 36.84% in March 2010. The combination of markedly higher average palm-oil and rubber prices, similar f.f.b. and rubber crops, but higher rubber sales, and the weakening of the US Dollar against the Indonesian Rupiah resulted in significantly-higher profits for the six months ended 30 June 2010 compared with the same period in 2009. The f.f.b. crop on Kerasaan Estate was similar to that for the first half of 2009 but the stronger palm-oil prices resulted in a sharply-improved result. As with the Group's own estates, the biological value of its associated companies has benefited from a rise in the price of crude palm oil used to establish biological value. This has added some US$300 per hectare to Agro Muko's oil-palm plantings. However, costs incurred on Agro Muko to prepare land for replanting in the second half of the year have eroded the effect of the biological gain on Agro Muko's profit for the period.
As in previous years, f.f.b. crops are expected to be higher in the second half of the year than the first. The rubber crop, however, is expected to be lower as the wet season sets in and also due to the replanting of some areas.
Australia
The Group's share of NAPCo's post-tax profit/(loss) for the period, compared with that for the first half, and for the whole, of 2009, was as follows:-
6 months 6 months Year
ended ended ended
30 June 30 June 31 December
2010 2009 2009
US$'000 US$'000 US$'000
NAPCo (34.37%) 2,208 (980) (1,041)
------ ------ ------
The pleasingly sharp improvement in the result was attributable to the substantially-improved season enjoyed by all the NAPCo properties in the early part of 2010. The good rainfall led to excellent pasture growth and, as a consequence, the average weight of the herd increased markedly. The improved pastures enabled more cattle to be run and, accordingly, over 9,000 head were purchased during the period with another 6,000 purchases anticipated for the second half. Furthermore, cattle prices increased during the period both in the Australian domestic market following the good season and, internationally, as a result of a decline in herd numbers worldwide. All these factors are reflected in NAPCo's results for the period. It should be noted that since the period end, cattle export prices have softened, mainly as a result of the stronger Australian Dollar. It is clearly too early to tell at what level cattle prices will be trading at the year end and how this, in turn, will affect the results for the year. However, the average weight per beast of NAPCo's herd is significantly higher than at this time last year.
Malaysia
The Group's share of Bertam Properties Sdn. Berhad's ("Bertam Properties") post-tax profit for the period, compared with that for the first half, and for the whole, of 2009, was as follows:-
6 months 6 months Year
ended ended ended
30 June 30 June 31 December
2010 2009 2009
US$'000 US$'000 US$'000
Bertam Properties (40%) 643 237 984
------ ------ ------
Two small land sales were completed by Bertam Properties in the first half of the year. A larger sale, of some 26 hectares, is in the process of being completed. This sale, on deferred-instalment terms, is expected to be completed, and the full consideration paid, later in 2010 or early 2011 and 90% of the total proceeds of approximately US$9.5 million have already been received. Credit is taken for the profit on disposal of land when the transaction has been completed and the full sale proceeds received.
Bertam Properties' land-development activities continue successfully and higher profits were achieved in the first half of 2010 compared with the first half of 2009. The operation of the small remaining area still under oil palms benefited from the higher palm-oil price and increased profits were reported.
OTHER ADMINISTRATIVE EXPENSES
As referred to above under "Results for the period", the costs of the Jakarta office in running the mature Sumatran estates are, for the first time, now included under "Other administrative expenses". In the first half of 2010, this amounted to approximately US$0.52 million.
During the six months ended 30 June 2010, a thorough review has been undertaken of the costs related to the land which has been developed by the Group but which, it has been decided, will be sold to the various smallholder co-operative schemes. It had been anticipated that the selling price of this land would approximately cover the cost of developing it. However, an impairment review has revealed that this will not be so in all cases. As a result of this exercise, the board has decided to write off approximately US$1.57 million so that the carrying value of these pieces of land now reflects a more realistic evaluation of what may be recovered from these co-operatives.
BORROWINGS
As foreshadowed in the 2009 annual report, a facility of RM60 million (approximately US$18.5 million at the current rate of exchange) has been agreed with the Malaysian Bank, AmBank (Malaysia) Berhad. These borrowings are secured on the Group's remaining land in Malaysia. RM24 million (US$7.5 million) has been drawn down since 30 June 2010 and this facility is being, and will be, utilised in providing funding for the project in East Kalimantan. As also referred to in the 2009 annual report, the loan facility with the German Development Bank, Deutsche Investitions-und Entwicklungsgesellschaft mbh (DEG), was terminated following DEG's withdrawal from the palm-oil sector. The US$2 million that had been drawn down was repaid in May 2010.
PROSPECTS
Since the period end, the palm-oil price has strengthened further to around US$900 per tonne (Rotterdam c.i.f.), an historically-robust level. Drought conditions in Russia have affected wheat production and their ban on exports seems to have affected other commodities. The drought may also affect oilseed crops in that region. In addition, accelerating demand allied to recovery in the world economy, together with concerns about palm-oil production in parts of South East Asia (primarily the "La Niña" effect) are supporting the current strong price. In the longer term, the expected general slowdown in the rate of development of new oil-palm areas in Indonesia, following environmental pressures, is likely to lend support to this market strength. The young age profile of the Group's palms will leave it well placed to take advantage of this.
As in previous years, it is expected that f.f.b. crops for the second half of the year will be higher than in the first. Harvesting has recently commenced on the new Kalimantan project and the f.f.b. are being sold to a nearby third-party mill. The project's own 60-tonne-per-hour mill is in the final stage of tendering for a contractor and it is expected that it will be operational before the end of 2011.
Prices for young, grass-fed cattle, such as those produced by Woodlands, have continued to be firm as a result of the good rainfall and pasture growth generally in Australia. Prices for the heavier, grain-finished cattle, such as those produced by NAPCo, have, as referred to elsewhere in this report, tapered off from the end-June levels. This is chiefly attributable to the strong Australian Dollar. World beef prices, in US-Dollar terms, are trading at historically-high levels and many analysts expect this upward trend to continue in response to robust demand, especially from the Middle East and Asia.
If palm-oil and beef prices remain at or around their present level, it is expected that the Group will report another successful year.
Unaudited consolidated income statement
FOR THE SIX MONTHS ENDED 30 JUNE 2010
Result before 6 months
biological Biological ended
bearer-asset bearer-asset 30 June
adjustment adjustment 2010
US$'000 US$'000 US$'000
Revenue(note 3) 15,333 - 15,333
Cost of sales (7,540) 458 (7,082)
------ ------ ------
Gross profit (note 3) 7,793 458 8,251
Gain on biological assets (note 5) - 10,947 10,947
Planting expenditure - (8,474) (8,474)
Foreign-exchange gains 1,816 - 1,816
Other administrative expenses (5,133) - (5,133)
Other income 101 - 101
------ ------ ------
Group operating profit before
interest and tax 4,577 2,931 7,508
Finance income 236 - 236
Finance costs (775) - (775)
------ ------ ------
Group-controlled profit
before taxation 4,038 2,931 6,969
Tax on profit on ordinary
activities (2,108) (542) (2,650)
------ ------ ------
Group-controlled profit
after tax 1,930 2,389 4,319
Share of associated companies'
profit after tax (note 3) 7,036 681 7,717
------ ------ ------
Profit after tax on
continuing operations 8,966 3,070 12,036
Discontinued operations (note 4) - - -
------ ------ ------
Profit for the year 8,966 3,070 12,036
------ ------ ------
Attributable to:
Owners of M.P. Evans Group PLC 7,716 2,656 10,372
Minority interests 1,250 414 1,664
------ ------ ------
8,966 3,070 12,036
------ ------ ------
US Cents
Basic earnings per 10p share
Continuing operations 19.54
Continuing and discontinued operations (note 3) 19.54
------
Diluted earnings per 10p share
Continuing operations 19.20
Continuing and discontinued operations (note 3) 19.20
------
Unaudited consolidated income statement
FOR THE SIX MONTHS ENDED 30 JUNE 2009
Result before 6 months
biological Biological ended
bearer-asset bearer-asset 30 June
adjustment adjustment 2009
US$'000 US$'000 US$'000
Revenue (note 3) 11,920 - 11,920
Cost of sales (6,884) 154 (6,730)
------ ------ ------
Gross profit (note 3) 5,036 154 5,190
Gain on biological assets (note 5) - 12,513 12,513
Planting expenditure - (5,300) (5,300)
Foreign-exchange losses (159) - (159)
Other administrative expenses (3,020) - (3,020)
Other income - - -
------ ------ ------
Group operating profit before
interest and tax 1,857 7,367 9,224
Finance income 463 - 463
Finance costs (560) - (560)
------ ------ ------
Group-controlled profit
before taxation 1,760 7,367 9,127
Tax on profit on ordinary
activities (2,030) (776) (2,806)
------ ------ ------
Group-controlled (loss)/profit
after tax (270) 6,591 6,321
Share of associated companies'
profit after tax (note 3) 1,178 1,859 3,037
------ ------ ------
Profit after tax on
continuing operations 908 8,450 9,358
Discontinued operations (note 4) (4) - (4)
------ ------ ------
Profit for the year 904 8,450 9,354
------ ------ ------
Attributable to:
Owners of M.P. Evans Group PLC 144 7,600 7,744
Minority interests 760 850 1,610
------ ------ ------
904 8,450 9,354
------ ------ ------
US Cents
Basic earnings per 10p share
Continuing operations 14.77
Continuing and discontinued operations (note 3) 14.83
------
Diluted earnings per 10p share
Continuing operations 14.36
Continuing and discontinued operations (note 3) 14.42
------
Consolidated income statement
FOR THE YEAR ENDED 31 DECEMBER 2009
Result before Year
biological Biological ended
bearer-asset bearer-asset 31 December
adjustment adjustment 2009
US$'000 US$'000 US$'000
Revenue (note 3) 28,391 - 28,391
Cost of sales (17,167) 481 (16,686)
------ ------ ------
Gross profit (note 3) 11,224 481 11,705
Gain on biological assets (note 5) (637) 23,518 22,881
Planting expenditure - (15,154) (15,154)
Foreign-exchange gains 1,460 - 1,460
Other administrative expenses (5,177) - (5,177)
Other income 226 - 226
------ ------ ------
Group operating profit before
interest and tax 7,096 8,845 15,941
Finance income 623 - 623
Finance costs (1,226) - (1,226)
------ ------ ------
Group-controlled profit
before taxation 6,493 8,845 15,338
Tax on profit on ordinary
activities (5,654) (578) (6,232)
------ ------ ------
Group-controlled profit
after tax 839 8,267 9,106
Share of associated companies'
profit after tax (note 3) 7,334 2,692 10,026
------ ------ ------
Profit after tax on
continuing operations 8,173 10,959 19,132
Discontinued operations (note 4) 1,578 - 1,578
------ ------ ------
Profit for the year 9,751 10,959 20,710
------ ------ ------
Attributable to:
Owners of M.P. Evans Group PLC 8,076 10,174 18,250
Minority interests 1,675 785 2,460
------ ------ ------
9,751 10,959 20,710
------ ------ ------
Basic earnings per 10p share US cents
Continuing operations 31.92
Continuing and discontinued operations (note 3) 34.94
------
Diluted earnings per 10p share US cents
Continuing operations 31.01
Continuing and discontinued operations (note 3) 33.94
------
Unaudited consolidated balance sheet
AT 30 JUNE 2010
Before
biological Biological
bearer-asset bearer-asset 30 June
adjustment adjustment 2010
US$'000 US$'000 US$'000
Non-current assets
Goodwill 1,891 - 1,891
Biological assets (note 5) - 104,428 104,428
Property, plant and equipment 100,613 (44,351) 56,262
Investment in associates 91,344 23,383 114,727
Investments 2,624 - 2,624
Deferred tax asset 2,177 - 2,177
------- ------- -------
198,649 83,460 282,109
------- ------- -------
Current assets
Biological assets 5,273 - 5,273
Inventories 7,905 - 7,905
Trade and other receivables 23,506 - 23,506
Current tax asset 2,124 - 2,124
Cash and cash equivalents 23,756 - 23,756
Assets held for sale - - -
------- ------- -------
62,564 - 62,564
------- ------- -------
Total assets 261,213 83,460 344,673
------- ------- -------
Current liabilities
Borrowings 20,975 - 20,975
Trade and other payables 10,803 - 10,803
Current tax liability 649 - 649
Liabilities related to
assets held for sale - - -
------- ------- -------
32,427 - 32,427
------- ------- -------
------- ------- -------
Net current assets 30,137 - 30,137
------- ------- -------
Non-current liabilities
Borrowings - - -
Deferred tax liability 2,629 14,563 17,192
Retirement-benefit obligations 1,557 - 1,557
------- ------- -------
4,186 14,563 18,749
------- ------- -------
Total liabilities 36,613 14,563 51,176
------- ------- -------
------- ------- -------
Net assets 224,600 68,897 293,497
------- ------- -------
Equity
Share capital (note 7) 8,980 - 8,980
Other reserves 68,061 23,383 91,444
Profit and loss account 142,000 37,193 179,193
------- ------- -------
Equity attributable to owners of
M.P. Evans Group PLC 219,041 60,576 279,617
Minority interests 5,559 8,321 13,880
------- ------- -------
Total equity 224,600 68,897 293,497
------- ------- -------
Unaudited consolidated balance sheet
AT 30 JUNE 2009
Before
biological Biological
bearer-asset bearer-asset 30 June
adjustment adjustment 2009
US$'000 US$'000 US$'000
Non-current assets
Goodwill 1,157 - 1,157
Biological assets (note 5) - 87,339 87,339
Property, plant and equipment 86,898 (32,823) 54,075
Investment in associates 79,457 21,870 101,327
Investments 2,674 - 2,674
Deferred tax asset 1,766 - 1,766
------- ------- -------
171,952 76,386 248,338
------- ------- -------
Current assets
Biological assets 3,363 - 3,363
Inventories 10,731 - 10,731
Trade and other receivables 11,373 - 11,373
Current tax asset 687 - 687
Cash and cash equivalents 46,106 - 46,106
Assets held for sale 262 - 262
------- ------- -------
72,522 - 72,522
------- ------- -------
Total assets 244,474 76,386 320,860
------- ------- -------
Current liabilities
Borrowings 19,960 - 19,960
Trade and other payables 8,460 - 8,460
Current tax liability 346 - 346
Liabilities related to
assets held for sale 37 - 37
------- ------- -------
28,803 - 28,803
------- ------- -------
------- ------- -------
Net current assets 43,719 - 43,719
------- ------- -------
Non-current liabilities
Borrowings 2,000 - 2,000
Deferred tax liability 2,216 13,556 15,772
Retirement-benefit obligations 1,597 - 1,597
------- ------- -------
5,813 13,556 19,369
------- ------- -------
Total liabilities 34,616 13,556 48,172
------- ------- -------
------- ------- -------
Net assets 209,858 62,830 272,688
------- ------- -------
Equity
Share capital (note 7) 8,817 - 8,817
Other reserves 60,090 21,869 81,959
Profit and loss account 137,487 31,692 169,179
------- ------- -------
Equity attributable to owners of
M.P. Evans Group PLC 206,394 53,561 259,955
Minority interests 3,464 9,269 12,733
------- ------- -------
Total equity 209,858 62,830 272,688
------- ------- -------
Consolidated balance sheet
AT 31 DECEMBER 2009
Before
biological Biological
bearer-asset bearer-asset 31 December
adjustment adjustment 2009
US$'000 US$'000 US$'000
Non-current assets
Goodwill 1,157 - 1,157
Biological assets (note 5) - 93,480 93,480
Property, plant and equipment 96,307 (36,375) 59,932
Investment in associates 89,885 22,702 112,587
Investments 2,642 - 2,642
Deferred tax asset 1,373 - 1,373
------- ------- -------
191,364 79,807 271,171
------- ------- -------
Current assets
Biological assets 2,650 - 2,650
Inventories 8,454 - 8,454
Trade and other receivables 14,852 - 14,852
Current tax asset 3,030 - 3,030
Cash and cash equivalents 38,081 - 38,081
Assets held for sale - - -
------- ------- -------
67,067 - 67,067
------- ------- -------
Total assets 258,431 79,807 338,238
------- ------- -------
Current liabilities
Borrowings 22,297 - 22,297
Trade and other payables 7,516 - 7,516
Current tax liability 632 - 632
Liabilities related to
assets held for sale - - -
------- ------- -------
30,445 - 30,445
------ ------ ------
Net current assets 36,622 - 36,622
------- ------- -------
Non-current liabilities
Borrowings 2,011 - 2,011
Deferred tax liability 2,796 14,020 16,816
Retirement-benefit obligations 1,251 - 1,251
------- ------- -------
6,058 14,020 20,078
------- ------- -------
Total liabilities 36,503 14,020 50,523
------- ------- -------
------- ------- -------
Net assets 221,928 65,787 287,715
------- ------- -------
Equity
Share capital (note 7) 8,821 - 8,821
Other reserves 70,610 22,702 93,312
Profit and loss account 138,188 35,177 173,365
------- ------- -------
Equity attributable to owners
of M.P. Evans Group PLC 217,619 57,879 275,498
Minority interests 4,309 7,908 12,217
------- ------- -------
Total equity 221,928 65,787 287,715
------- ------- -------
Unaudited consolidated cash-flow statement
FOR THE SIX MONTHS ENDED 30 JUNE 2010
6 months 6 months Year
ended ended ended
30 June 30 June 31 December
2010 2009 2009
US$'000 US$'000 US$'000
Net cash outflow from operating
activities (note 8) (12,371)* (5,250)* (9,809)*
------- ------- -------
Investing activities
Interest received 236 365 623
Dividends from associated
undertakings 9,001 5,709 6,966
Dividends from trading investments - 99 -
Proceeds on disposal of assets
held for sale - - 2,914
Proceeds on disposal of property,
plant and equipment 322 430 -
Purchase of property, plant
and equipment (1,612) (4,476) (9,333)
Purchase of shares in associated
company (5,484) - -
------- ------- -------
Net cash from investing activities 2,463 2,127 1,170
------- ------- -------
Financing activities
Dividends paid to Company
shareholders (note 5) (3,608) (4,309) (6,033)
Repayment of borrowings (2,010 (1,878) 10
Proceeds on issue of shares (note 7) 1,285 52 99
Dividend paid to minorities - (1,074) (1,144)
------- ------- -------
Net cash used by financing
activities (4,333) (7,209) (7,068)
------- ------- -------
Net decrease in cash
and cash equivalents (14,241) (10,332) (15,707)
Net cash and cash equivalents
at beginning of the period 15,784 37,486 37,486
Effect of foreign-exchange rates
on cash and cash equivalents 1,238 (1,008) (5,995)
------- ------- -------
Net cash and cash equivalents
at end of the period 2,781 26,146 15,784
------- ------- -------
* Including expenditure on new planting of US$8,474,000 (six months to June 2009 US$5,300,000; 2009 full year US$15,154,000)
Notes to the interim statements
FOR THE SIX MONTHS ENDED 30 JUNE 2010
1. STATUTORY INFORMATION
The financial information for the six-month periods ended 30 June 2010 and 2009 has been neither audited nor reviewed by the Group's auditors and does not constitute accounts within the meaning of section 423 of the Companies Act 2006. The financial information for the year ended 31 December 2009 is abridged from the statutory accounts. The 31 December 2009 statutory accounts have been reported on by the Group's auditors, PricewaterhouseCoopers LLP, and have been filed with the Registrar of Companies. The report of the auditors thereon was unqualified and did not contain a statement under section 498(2) or (3) of the Companies Act 2006, nor did it contain any matters to which the auditors drew attention without qualifying their audit report.
2. ACCOUNTING POLICIES
The consolidated financial results have been prepared in accordance with International Financial Reported Standards (IFRS and IFRIC interpretations) issued by the International Accounting Standards Board (IASB) as adopted by the EU, and with those parts of the Companies Act 2006 applicable to companies preparing accounts under IFRS.
The accounting policies of the Group follow those set out in the annual financial statements at 31 December 2009.
3. DISCONTINUED OPERATIONS
6 months 6 months Year
ended ended ended
30 June 30 June 31 December
2010 2009 2009
US$'000 US$'000 US$'000
(Loss)/profit after tax - (4) 23
Profit after tax on sale - - 1,555
------ ------ ------
- (4) 1,578
------ ------ ------
4. DIVIDENDS
6 months 6 months Year
ended ended ended
30 June 30 June 31 December
2010 2009 2009
US$'000 US$'000 US$'000
2008 final dividend - 5.00p
per 10p share - 4,309 4,309
2009 interim dividend - 2.00p
per 10p share - - 1,724
2009 final dividend - 5.00p
per 10p share 3,993 - -
------ ------ ------
3,993 4,309 6,033
------ ------ ------
As last year, the board proposes that an interim dividend of 2 pence per share will be paid. The board has decided to make a scrip dividend available for this interim dividend. Shareholders who have previously elected to receive their dividends in this manner will therefore automatically receive this dividend as scrip. Shareholders who now wish to make an election to receive this and future dividends as scrip should contact the company secretary.
5. BIOLOGICAL ASSETS
The Group values its plantation assets using a discounted cash flow over the expected 25-year economic life of the asset. The discount rate used in this valuation is 14%. The price of the f.f.b. crop is taken to be a 20-year average based on actual selling prices or, where the plantation has its own mill, an inference based on the widely-quoted commodity price for crude palm oil delivered c.i.f. Rotterdam. The directors have concluded that using a 20-year average provides their best estimate of prices to be achieved over the valuation period.
The long-term average price and exchange rates used in determining the valuations based on cash flows were as follows:
6 months 6 months Year
ended ended ended
30 June 30 June 31 December
2010 2009 2009
US$'000 US$'000 US$'000
Price of crude palm oil
(US$/t, c.i.f Rotterdam) 515 492 502
Exchange rate (Rupiah per US dollar) 9,083 10,225 9,400
------ ------ ------
For palm oil, changes in the price assumption have a more than proportionate impact on the valuation of oil-palm plantings.
6. SHARE CAPITAL
30 June 30 June 31 December
2010 2009 2009
Number of shares of 10p each
At 1 January 52,271,315 52,211,585 52,211,585
Issued 1,044,853 30,800 59,730
---------- ---------- ----------
At period end 53,316,168 52,242,385 52,271,315
---------- ---------- ----------
US$'000 US$'000 US$'000
At 1 January 8,821 8,812 8,812
Issued 159 5 9
------- ------- -------
At period end 8,980 8,817 8,821
------- ------- -------
During the period, 968,100(2009 - 30,800) 10p shares were issued as a result of the exercise of share options. Total cash proceeds received by the Company were US$1,285,140 (2009 US$51,963). In addition, 76,753 shares were issued in lieu of the 2009 final dividend paid on 25 June 2010 (2009 nil).
7. CONSOLIDATED STATEMENT OF CHANGES IN TOTAL EQUITY
6 months 6 months Year
ended ended ended
30 June 30 June 31 December
2010 2009 2009
US$'000 US$'000 US$'000
Profit for the period 12,036 9,354 20,710
Other comprehensive income
for the period * (3,992) 7,238 12,648
------- ------- -------
Total comprehensive income
for the period 8,044 16,592 33,358
------- ------- -------
Issue of share capital 1,670 52 99
Dividends (3,993) (5,383) (7,177)
Credit to equity for equity-
settled share-based payments 61 52 60
------- ------- -------
Transactions with owners (2,262) (5,279) (7,018)
------- ------- -------
Balance at 1 January 287,715 261,375 261,375
------- ------- -------
Balance at period end 293,497 272,688 287,715
------- ------- -------
* Foreign-exchange gains made on the reserves of associated undertakings in 2009 have been significantly
reversed in 2010 as the US Dollar has weakened against both the Australian Dollar and the Malaysian Ringgit.
8. ANALYSIS OF MOVEMENTS IN CASH FLOW
6 months 6 months Year
ended ended ended
30 June 30 June 31 December
2010 2009 2009
US$'000 US$'000 US$'000
Operating profit 7,508 11,113 15,976
Biological gain (13,571) (15,325) (22,014)
Write-down of land to be sold
to smallholders' co-operative
schemes 1,567 - -
Depreciation of property,
plant and equipment 1,570 1,181 2,517
Past-service liabilities 307 114 358
Share-based payments 61 52 60
------- ------- -------
Operating cash flows before
movements in working capital (2,558) (2,865) (3,103)
Increase in inventories 202 54 2,505
Increase in receivables (8,651) (3,119) (3,212)
Increase in payables 1,555 2,904 1,731
------- ------- -------
Cash used in operating activities (9,452) (3,026) (2,079)
Income tax paid (2,144) (1,664) (6,504)
Interest paid (775) (560) (1,226)
------- ------- -------
Net cash used in operating
activities (12,371) (5,250) (9,809)
------- ------- -------
9. EXCHANGE RATES
6 months 6 months Year
ended ended ended
30 June 30 June 31 December
2010 2009 2009
US$1 = Indonesian Rupiah
- average 9,182 11,048 10,374
- period end 9,083 10,225 9,400
------ ------ ------
US$1 = Australian Dollar
- average 1.12 1.41 1.28
- period end 1.18 1.24 1.11
------ ------ ------
US$1 = Malaysian Ringgit
- average 3.31 3.59 3.52
- period end 3.24 3.52 3.42
------ ------ ------
£1 = US Dollar
- average 1.53 1.49 1.57
- period end 1.50 1.65 1.61
------ ------ ------
10. DISTRIBUTION
The interim report for the six-month period ended 30 June 2010 will be despatched to shareholders on or before 24 September 2010 and copies thereof will be available from the Company at 3 Clanricarde Gardens, Tunbridge Wells, Kent TN1 1HQ on and after that date.
14 September 2010
This information is provided by RNS
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