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M. P. Evans Group (MPE)

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Monday 13 September, 2021

M. P. Evans Group

Half-year Report

RNS Number : 4773L
M. P. Evans Group PLC
13 September 2021
 

M.P. EVANS GROUP PLC

M.P. Evans Group PLC ("M.P. Evans" or "the Group"), a producer of sustainable Indonesian palm oil, announces its unaudited interim results for the six months ended 30 June 2021.

highlights

Operations

· Group's operations relatively unaffected by Covid-19

· 24% increase in Group crop to 413,200 tonnes

· Total crop processed up by 28% to 702,300 tonnes

· 29% increase in total CPO production 161,400 tonnes

· Cost of palm product down by US$50 per tonne to US$335

Financial

· 34% increase in ex-mill-gate CPO price to US$724 per tonne

· 111% increase in sustainability premia to US$1.9 million

· Operating profit up by 588% to US$41.3 million (2020 US$6.0 million)

· 21% decrease in net debt to US$67.7 million (2020 US$85.6 million)

· 572% increase in earnings per share to 38.3p (2020 - 5.7p per share)

· Interim dividend doubled to 10p per share (2020 - 5p per share)

Post-period end

· Palm-oil price remains strong; 8-month average ex-mill-gate price for 2021 up to US$738

· Group's fifth palm-oil mill opened at Bumi Mas

· Planting restarted at Musi Rawas

· Updated strategic approach highlighted with focus on four pillars: Responsibility, Excellence, Growth and Yield

· Intention to pay dividend of at least 30p per share for 2021 (2020 - 22p per share)

M.P. Evans executive chairman, Peter Hadsley-Chaplin, commented: "Earnings for the period are very substantially higher than last year following the anticipated continued upward trajectory of crops and the strong palm-oil market. Both these trends have continued into the second half and are likely to form the basis for an excellent result for the year. We are delighted to propose an interim dividend of 10p per share."

13 September 2021

Enquiries:

M.P. Evans Group PLC

Telephone: 01892 516333

Peter Hadsley-Chaplin - Executive chairman

 

Matthew Coulson - Finance director

 

 

 

Peel Hunt LLP (Nomad and joint broker)

Telephone: 020 7418 8900

Dan Webster

 

Andrew Clark

 

 

 

finnCap (Joint broker)

Telephone: 020 7220 0500

Tim Redfern

 

Chris Raggett

Sunila de Silva

 

 

 

Hudson Sandler (Communications consultants)

Telephone:  020 7796 4133

Charlie Jack

 

Elfie Kent

 

An analysts' meeting will be held remotely at 9:30am and those wishing to participate should contact [email protected] for further details.

 

Overview

The Group achieved a dramatic increase in profitability in the first half of 2021, as a result of significant increases in both prices and production. Gross profit was US$42.7 million in the period compared to US$8.9 million in the first half of 2020, whilst operating profit for the first half of the year was US$41.3 million compared to US$6.0 million in the same period in 2020. The total crop processed by the Group rose by 28% to 702,300 tonnes, with increases in total crop observed at all the Group's estates. Particularly notable were the doubling of crop at Musi Rawas as the palms mature at that developing estate, and the 72% increase at Bangka as crops recovered from a period of low rainfall that had affected production in 2020. Crude palm oil ("CPO") production rose overall by 29% to 161,400 tonnes in the period, whilst CPO production in Group mills increased by 30% to 125,900 tonnes, as a result of both rising crop and having the Group's Rahayu mill in operation throughout the first six months of 2021.

CPO prices had increased significantly in the latter part of 2020 and remained at high levels throughout the first half of this year. As previously reported by the Group, the Indonesian government introduced a change to the CPO export levy structure from December 2020, the result of which was that the Group did not receive the full benefit of increased prices. However, mill-gate prices were still significantly higher, up by 34% on the first half of 2020. In addition, rising crops helped the Group to continue to keep tight control over its costs, and the cost of production fell by US$50 per tonne in the first half of the year to US$335 for CPO produced from Group-controlled areas.

The Group continued to be highly cash generative, recording an operating cash inflow before tax and interest payments of US$33.0 million compared to US$11.2 million in 2020. The Group remains focused on completing the development of its existing estate portfolio, and invested US$15.1 million in capital expenditure during the period. Its most significant project was its fifth oil-palm mill, a 60-tonne-per-hour processing facility at the Bumi Mas project in East Kalimantan, which began processing after the end of the period, in August 2021. The Group was able, even after capital investment and an increased dividend payment to shareholders, to reduce net debt in the period by US$10.4 million, both as some of the Group's scheme smallholders reach a point of being able to access independent finance and repay funding provided by the Group, and as a reflection of the Group's strong operating cash flows.

Covid-19 update

The Group continues to monitor carefully the global Covid-19 situation, with a particular focus on the locations in which it has operations. It remains the case that the pandemic has had relatively little effect on the Group's business. Preventative measures remain in place, and the Group adjusts its response based on latest guidance, including the use of travel restrictions, access controls and remote working where possible. A significant number of the Group's workforce has received Covid-19 vaccinations, and vaccination rates continue to increase. All estates and mills operated without interruption during the period.

Dividends

The board proposes to pay an interim dividend of 10p per share (2020 - 5p per share), and considering the marked increase in crop and production both shown in these results and projected for the immediate future, and also in light of the prospects for the palm-oil market, the board intends to recommend a total dividend of at least 30p per share in respect of 2021.

The board believes that the developing maturity of the Group's estates combined with increasing milling capacity form a basis for strong cash flows, and hence the opportunity for further significant increases in shareholder returns. The board intends to continue its long-standing policy of at least maintaining, and where possible increasing, the dividend.

Strategy update

Responsibility, excellence, growth and yield represent the four pillars of the Group's strategic approach. Acting responsibly is at the heart of what the Group does. The Group is an active member of the RSPO, it does not deforest, and is a good steward of the land it cultivates. The Group provides housing along with medical, educational and leisure facilities for workers and their families. Excellence comes from investing for the long term, not only in plantation assets but also in people, including in their training and development. In this way, the Group is consistently able to deliver both high yields and high oil extraction rates from its estates and mills. The Group seeks to grow and develop from the increasing maturity of its young estates, from the ongoing focus on improving yields, and from the planned acquisition and sustainable development of new areas of land. The Group's investment strategy has already led to a significant improvement in shareholder returns. In line with its growth programme, the Group plans to deliver ever-increasing returns to shareholders.

Results for the period

Crops and production

Details of the Group's crops, production, extraction rates and average selling prices for the first half of 2021 are shown in the following table:

 

 

6 months ended 

 

6 months ended 

Year ended 

 

30 June 

Increase/

30 June 

31 December 

 

2021 

(decrease)

2020 

2020 

 

Tonnes 

%

Tonnes 

Tonnes 

Crop
Fresh fruit bunches

 

 

 

 

Own crops

 

 

 


Kota Bangun

104,200 

21 

86,300 

186,400 

Bangka

89,200 

72 

52,000 

127,500 

Pangkatan group

83,500 

79,000 

170,300 

Bumi Mas

80,700 

78,900 

154,300 

Musi Rawas

31,800 

101 

15,800 

44,500 

Simpang Kiri

23,800 

22,100 

41,300 

 

413,200 

24 

334,100 

724,300 

Scheme-smallholder crops

 

 

 

 

Kota Bangun

45,500 

17 

38,900 

81,500 

Bangka

45,900 

84 

24,900 

64,400 

Bumi Mas

14,300 

13,800 

26,900 

Musi Rawas

15,200 

117 

7,000 

20,200 

 

120,900 

43 

84,600 

193,000 

Independent-smallholder crop

 

 

 

 

processed

 

 

 

 

Kota Bangun

107,300 

100 

53,600 

142,500 

Bangka

41,700 

(29)

58,900 

112,800 

Pangkatan group

19,200 

18,400 

34,400 

 

168,200 

28 

130,900 

289,700 

 

702,300 

28 

549,600 

1,207,000 

 

Production

 

 

 

 

Crude palm oil

 

 

 

 

Kota Bangun

59,900 

37 

43,600 

96,500 

Bangka

42,800 

36 

31,400 

69,600 

Pangkatan group

23,200 

22,000 

46,100 

 

125,900 

30 

97,000 

212,200 

Bumi Mas

20,600 

12 

18,400 

37,400 

Musi Rawas

9,600 

109 

4,600 

13,200 

Simpang Kiri

5,300 

10 

4,800 

8,900 

 

35,500 

28 

27,800 

59,500 

 

161,400 

29 

124,800 

271,700 

Palm kernels

 

 

 

 

Kota Bangun

11,400 

33 

8,600 

19,300 

Bangka

10,100 

31 

7,700 

16,900 

Pangkatan group

5,400 

5,100 

10,800 

 

26,900 

26 

21,400 

47,000 

Bumi Mas

4,500 

4,400 

8,600 

Musi Rawas

2,200 

120 

1,000 

2,900 

Simpang Kiri

1,100 

10 

1,000 

1,900 

 

7,800 

22 

6,400 

13,400 

 

34,700 

25 

27,800 

60,400 

 

 

 

 

 

 

Extraction rate

 

 

 

Crude palm oil

 

 

 

 

Kota Bangun - Bumi Permai

23.9 

(2)

24.4 

23.8 

Kota Bangun - Rahayu

22.4 

 

 

21.6 

Bangka

24.2 

23.1 

22.9 

Pangkatan group

22.6 

22.6 

22.5 

 

23.5 

23.5 

23.1 

Bumi Mas

21.7 

19.9 

20.7 

Musi Rawas

20.5 

20.3 

20.4 

Simpang Kiri

22.5 

21.5 

21.5 

 

 

 

 

 

Palm kernels

 

 

 

 

Kota Bangun - Bumi Permai

4.7 

(2)

4.8 

4.9 

Kota Bangun - Rahayu

4.1 

 

 

4.0 

Bangka

5.7 

5.7 

5.5 

Pangkatan group

5.3 

5.2 

5.3 

 

5.0 

(4)

5.2 

5.1 

Bumi Mas

4.7 

(2)

4.8 

4.7 

Musi Rawas

4.6 

4.6 

4.6 

Simpang Kiri

4.5 

4.5 

4.5 

 

 

 

 

 

Average selling prices

US$ 

 

US$ 

US$ 

CPO (cif Rotterdam)

1,115 

 

648 

716 

CPO - Group ex mill gate

724 

 

541 

591 

Palm-kernel oil

1,275 

 

718 

796 

Palm kernels - Group ex mill gate

491 

 

298 

316 

Sales prices

CPO prices began to rise sharply in the latter part of 2020, and remained at high levels throughout the first half of 2021, with an average cif Rotterdam price of US$1,115, 72% higher than the same period in 2020. The increase did not translate fully into a rise in the mill-gate price following an increase in the export levy applied to CPO announced in December 2020 by the Indonesian government. Where previously applied at a flat rate of US$55 per tonne, the government introduced an increasing charge up to a maximum of US$255 per tonne at CPO prices over US$1,000. As a result of the higher export levy, along with the existing export tax which also increases at higher prices, the average mill-gate price in the first half of the year was US$724. However, this was still a significant 34% increase on the same period in 2020. As part of this price, the Group received an average of US$10 per tonne sustainability premium on sale of CPO, up by US$2 on the previous year.

For palm kernels, the Group received US$491 per tonne in the first half of the year, a significant 65% recovery in the price compared to the US$298 received in the same period in 2020, consistent with the increase in Rotterdam CPO prices. Within this, the Group received an average of US$26 per tonne sustainability premium on palm kernels, compared to US$9 in 2020. Premia were significantly higher, partly in line with palm-kernel prices, but also as demand for products containing sustainably sourced palm-kernel oil, including cosmetics, continued to increase.

Production costs

The cost per tonne of palm product (CPO and palm kernels) produced from the Group's own areas was US$335 in the first half of the year, US$50 lower than in the first half of 2020. The decrease can primarily be attributed to the effect of processing higher volumes of crop compared to the previous year, but the Group also benefitted from a one-off non-cash credit of US$2.1 million in the first half of the year due to a change in Indonesian pension legislation, further reducing costs. The effect of this on cost per tonne will be diluted in the 2021 full year results.

The cost of purchasing ffb from both scheme smallholders and independent smallholders increased significantly in the first half of 2021 compared to 2020 as purchase costs are linked to CPO prices. As a result, the Group's total cost per tonne at its mills in the first half of 2021, including ffb from all sources, was US$437 (2020 US$410) compared to an average ex-mill-gate price in the same period of US$724 (2020 US$541). Total gross profit was US$37.3million (2020 US$10.7 million) from those locations where the Group has its own milling facilities.

Performance at the Group locations which do not yet have their own mills continues to improve as a result of higher prices, better extraction rates agreed with outside mills, and improving yields and efficiency. For the first half of 2021, those locations achieved a gross profit of US$5.5 million compared to a gross loss of US$1.8 million in the first half of 2020.

Planting

Following the announcement of changes to RSPO rules, the Group paused planting at its Musi Rawas estate in late 2019, and subsequently provided all necessary documentary evidence to demonstrate compliance with the updated requirements. The Group received clearance from the RSPO at the end of July 2021 that planting could restart. There are 8,000 planted hectares at Musi Rawas and, based on the clearance now received, the Group remains confident of being able to reach a total of at least 10,000 hectares. Elsewhere in the first half of 2021, the Group undertook a small amount of new planting and replanting totalling 126 hectares.

New land

In line with the Group's strategy, it is continuing to look for opportunities to acquire additional land close to its existing estates. It is currently pursuing potential acquisitions near both Kota Bangun and Simpang Kiri. Land acquisition close to Simpang Kiri may subsequently justify developing a mill to process the Group's ffb, further increasing returns to shareholders. In North Sumatra, the Group is supporting the formation of independent smallholder co-operatives which will add another source of ffb to the Pangkatan mill. At the end of June 2021, independent smallholder co-operatives covering 883 hectares had been formed.

Sustainability

Of the Group's production, 54% is certified sustainable palm oil. Certification is awarded to mills rather than for the crop, and even after new mills are opened there is a necessary process of demonstrating compliance with RSPO requirements for a period of time, followed by an independent audit, before certification is received. The Group remains committed to significantly increasing its milling capacity, processing ffb in its own mills, and achieving certification for each one. In the meantime, all the Group's crop and that of its associated scheme smallholders is produced in full accordance with RSPO standards.

Malaysia: sale of Bertam Estate

As reported previously, the Group reached an agreement in 2020 to sell the wholly owned 70-hectare Malaysian estate to Bertam Properties Sdn. Berhad ("Bertam Properties"), the Group's 40%-held Malaysian property joint venture. All sale conditions were met before 30 June 2021, other than the finalisation of bank finance by Bertam Properties, which was delayed by Covid-19 restrictions in Malaysia, but is expected to occur before the end of October. Total sale consideration is RM99.9 million (US$24.1 million), and the transaction will be taxed at the 10% Real Property Gains Tax rate in Malaysia.

Malaysian associate: Bertam Properties

Bertam Properties achieved a profit in the first half of the year, of which the Group's share was US$0.2 million, compared to breaking even in the first half of 2020. Whilst conditions in the Malaysian property market remain challenging, Bertam Properties continues to show resilience, and to perform well within its location and market.

Result

The Group recorded revenue of US$128.0 million in the first six months of 2021, up by 69% on the same period in 2020 as both  prices and production increased significantly. Gross profit increased by a factor of almost five to US$42.7 million whilst operating profit increased more than sixfold to US$41.3 million as costs were well controlled and margins increased. Whilst slightly lower, finance costs were similar to the same period last year at US$1.4 million. After interest, tax, and recognising its share of the profits of associated companies, the Group recorded a profit of US$30.4 million in the first six months of the year, US$26.1 million higher than in the previous period. Earnings per share were 38.3 pence.

CURRENT TRADING AND PROSPECTS

Group crops continued to follow a similar pattern in the two months to August 2021 to that observed in the first half of the year, although during these two months there was a significant increase in crop at the Group's Kota Bangun estates, reflecting the relative timings of high and low cropping periods. The total crop processed in the two months was 227,500 tonnes, bringing the total for the year to date to 929,800 tonnes as shown in the following table:

 

 

8 months ended

 

8 months ended

 

31 August 

 

31 August 

 

2021 

Increase 

2020 

 

Tonnes 

Tonnes 

Own crops

555,900 

24 

449,300 

Scheme-smallholder crops

158,500 

43 

110,800 

Independent-smallholder crop processed

215,400 

30 

165,800 

 

929,800 

28 

725,900 

The Group's fifth palm-oil mill began operation at Bumi Mas in August, and CPO is now being transferred to the recently completed bulking facility on the estate, ready for the first Group dispatch from that location. Having completed construction, the Bumi Mas mill is being monitored by mill and engineering management to ensure that efficiency and extraction rates can be maximised. In addition, the Group's engineering team have completed the majority of the tendering for the Group's new palm-oil mill at Musi Rawas. Groundworks are already well advanced, and construction is expected to start during the final quarter of 2021.

At the start of July, the cif Rotterdam palm-oil price was US$1,060 per tonne, and increased during the two months to the end of August, ending the period at US$1,235. Furthermore, the Indonesian government announced a reduction in the export levy applied to CPO, taking effect from 2 July 2021, which reduced the highest levy from US$255 per tonne to US$175. A combination of increasing prices and the levy reduction helped to increase ex-mill-gate prices in the two months to August, resulting in an increase in the Group's average mill-gate price from the US$724 in the first six months of the year to US$738 for the first eight months of the year.

The rollout of the Covid-9 vaccination programme is continuing in Indonesia and gathering momentum. By the end of August, over 40% of the Group's workforce had received at least one vaccination, and this percentage is expected to increase significantly by the year end. All the Group's mills and estates are continuing to operate without interruption.

As indicated above, CPO prices remained strong in the first two months of the second half of 2021, and given the continued strength evident in the forward markets, the full-year average cif Rotterdam price is likely to be at a multi-year high. Looking into 2022, much depends on the extent to which production in Malaysia recovers if and when foreign labour restrictions are relaxed as Covid-19 is brought under control. Palm oil is also dependent on developments in the wider vegetable-oil market, in particular the soya-oil market which is likely to continue to be influenced by weather patterns in the Americas. In addition, with regard to input costs, there may be some upward pressure arising from increases in fertiliser and other costs. However, production increases will help to mitigate against any increases in unit costs.

Irrespective of developments in the wider market, the board is of the view that a combination of rising yields, increasing milling capacity and a focus on controlling costs puts the Group in a strong position to generate rising cash flows and returns for shareholders, and that the outlook remains positive.

UNAUDITED CONSOLIDATED INCOME STATEMENT

For the six months ended 30 June 2021

 

 

6 months 

6 months 

 

 

 

ended 

ended 

Year ended 

 

 

30 June 

30 June 

31 December 

 

 

2021 

2020 

2020 

 

Note 

US$'000 

US$'000 

US$'000 

Continuing operations

 

 

 

 

Revenue

128,033 

75,894 

174,510 

Cost of sales*

 

(85,302)

(67,023)

(139,755)

Gross profit

42,731 

8,871 

34,755 

Gain on biological assets

 

762 

(647)

682 

Foreign-exchange losses

 

(570)

(799)

(1,068)

Other administrative expenses

 

(2,350)

(2,207)

(4,587)

Other income

 

718 

824 

1,539 

Operating profit

 

41,291 

6,042 

31,321 

Finance income

 

244 

308 

527 

Finance costs

 

(1,445)

(1,928)

(3,408)

Profit before taxation

 

40,090

4,422 

28,440 

Tax on profit on ordinary activities

 

(9,656)

(749)

(7,692)

Profit after tax

 

30,434 

3,673 

20,748 

Share of associated companies' profit after tax

774 

635 

1,421 

Profit for the period

 

31,208 

4,308 

22,169 

 

 

 

 

 

Attributable to:

 

 

 

 

Owners of M.P.Evans Group PLC

 

28,857 

3,896 

20,371 

Non-controlling interests

 

2,351 

412 

1,798 

 

 

31,208 

4,308 

22,169 

 

 

 

 

 

 

 

 

 

 

 

 

US cents 

US cents 

US cents 

Continuing operations

 

 

 

 

Basic earnings per 10p share

 

53.0 

7.2 

37.4 

Diluted earnings per 10p share

 

52.8 

7.1 

37.3 

 

 

 

 

 

 

 

Pence 

Pence 

Pence 

Basic earnings per 10p share

 

 

 

 

Continuing operations

 

38.3 

5.7 

29.2 

 

*includes a US$2.1 million past service credit in 2021 relating to past service liabilities in Indonesia

 

UNAUDITED CONSOLIDATED BALANCE SHEET

As at 30 June 2021

 

 

 

30 June 

30 June 

31 December 

 

 

2021 

2020 

2020 

 

Note 

US$'000 

US$'000 

US$'000 

Non-current assets

 

 

 

 

Goodwill

 

11,767 

11,767 

11,767

Other intangible assets

 

1,298 

1,453 

1,381 

Property, plant and equipment

 

394,981 

376,199 

390,642 

Investments in associates

 

21,123 

21,272 

22,154 

Investments

 

65 

63 

67 

Deferred-tax asset

 

4,129 

4,985 

5,046 

Trade and other receivables

 

11,743 

11,555 

10,917 

 

 

445,106 

427,294 

441,974 

Current assets

 

 

 

 

Biological assets

 

3,511 

1,419 

2,749 

Inventories

 

14,846 

12,359 

11,617 

Trade and other receivables

 

45,093 

44,970 

48,620 

Current-tax asset

 

3,600 

3,430 

3,968 

Current-asset investments

 

324 

329 

334 

Cash and cash equivalents

 

29,737 

11,822 

27,222 

 

 

97,111 

74,329 

94,510 

Total assets

 

542,217 

501,623 

536,484 

Current liabilities

 

 

 

 

Borrowings

 

39,743 

37,426 

39,605 

Trade and other payables

 

22,119 

21,374 

26,039 

Current-tax liabilities

 

6,946 

715 

6,003 

 

 

68,808 

59,515 

71,647 

Net current assets

 

28,303 

14,814 

22,863 

Non-current liabilities

 

 

 

 

Borrowings

 

58,007 

60,296 

66,079 

Trade and other payables

 

151 

38 

Deferred-tax liability

 

11,371 

10,173 

10,529 

Retirement-benefit obligations

 

12,086 

10,091 

14,051 

 

 

81,464 

80,711 

90,697 

Total liabilities

 

150,272 

140,226 

162,344 

Net assets

 

391,945 

361,397 

374,140 

Equity

 

 

 

 

Share capital

9,204 

9,204 

9,204 

Other reserves

 

54,297 

55,514 

55,090 

Retained earnings

 

316,343 

287,305 

300,117 

Equity attributable to the

 

 

 

 

  owners of M.P.Evans Group PLC

 

379,844 

352,023 

364,411 

Non-controlling interests

 

12,101 

9,374 

9,729 

Total equity

 

391,945 

361,397 

374,140 

 

 

 

UNAUDITED STATEMENT OF CHANGES IN CONSOLIDATED TOTAL EQUITY

For the six months ended 30 June 2021

 

 

 

 

 

 

 

6 months 

6 months 

Year 

 

 

ended 

ended 

ended 

 

 

30 June 

30 June 

31 December 

 

 

2021 

2020 

2020 

 

Note 

US$'000 

US$'000 

US$'000 

Profit for the period

 

31,208 

4,308 

22,169 

Other comprehensive expense for the period

 

(356)

(979)

(2,189)

Total comprehensive income for the period

 

30,852 

3,329 

19,980 

Issue of share capital

 

23 

Share buy-backs

 

(1,155)

(1,155)

Dividends paid

(13,150)

(8,594)

(12,980)

Credit to equity for equity-settled share-based payments

 

103 

108 

609 

Transactions with owners

 

(13,047)

(9,618)

(13,526)

At 1 January

 

374,140 

367,686 

367,686 

Balance at period end

 

391,945 

361,397 

374,140 

 

 

 

UNAUDITED CONSOLIDATED CASH-FLOW STATEMENT

For the six months ended 30 June 2021

 

 

6 months 

6 months 

Year 

 

 

ended 

ended 

ended 

 

 

30 June 

30 June 

31 December 

 

 

2021 

2020 

2020 

 

Note 

US$'000 

US$'000 

US$'000 

Net cash generated by operating activities

24,954 

4,514 

39,598 

Investing activities

 

 

 

 

Purchase of property, plant and equipment

 

(15,084)

(16,459)

(41,409)

Purchase of intangible assets

 

(102)

(113)

Interest received

 

244 

308 

108 

Decrease in bank deposits treated as

 

 

 

 

  current asset investments

 

10 

831 

826 

Decrease in receivables from smallholder

 

 

 

 

  co-operatives

 

13,013 

3,172 

3,886 

Proceeds on disposal of property, plant and equipment

 

516 

206 

732 

Net cash used by investing activities

 

(1,301)

(12,044)

(35,970)

Financing activities

 

 

 

 

New borrowings

 

10,000 

24,581 

Repayment of borrowings

 

(7,934)

(6,752)

(13,307)

Lease liability payments

(108)

(104)

(209)

Dividends paid to Company shareholders

 

(13,150)

(8,594)

(12,105)

Purchase of non-controlling interests

 

(89)

Buy-back of Company shares

 

(1,155)

(1,155)

Net cash used by financing activities

 

(21,192)

(6,605)

(2,284)

Net increase/(decrease) in cash and cash equivalents

 

2,461 

(14,135)

1,344 

Cash and cash equivalents at 1 January

 

27,222 

25,947 

25,947 

Effect of foreign-exchange rates on cash and cash equivalents

54 

10 

(69)

Net cash and cash equivalents at period end

 

29,737 

11,822 

27,222 

 

 

 

NOTES TO THE INTERIM STATEMENTS

For the six months ended 30 June 2021

 

Note 1  General information

 

The financial information for the six-month periods ended 30 June 2021 and 2020 has been neither audited nor reviewed by the Group's auditors and does not constitute statutory accounts within the meaning of section 434 of the Companies Act 2006.  The financial information for the year ended 31 December 2020 is abridged from the statutory accounts.  The 31 December 2020 statutory accounts have been reported on by the Group's auditors for that year, BDO 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.

 

 

Note 2  Accounting policies

 

The consolidated financial results have been prepared in accordance with International Financial Reporting Standards (IFRS and IFRIC interpretations) issued by the International Accounting Standards Board (IASB), 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 2020. The Group has made a number of critical accounting judgements and key estimates in the preparation of this interim report, and they remain consistent with those set out in note 3(r) to the 2020 annual financial statements.

 

 

Note 3  Segment information

 

The Group's reportable segments are distinguished by location and product: Indonesian oil-palm plantation products in Indonesia and Malaysian property development.

 

 

Plantation 

Property 

 

 

 

Indonesia 

Malaysia 

Other 

Total 

 

US$'000 

US$'000 

US$'000 

US$'000 

6 months ended 30 June 2021

 

 

 

 

Revenue

127,984 

49 

128,033 

Gross profit/(loss)

42,753 

(22)

42,731 

Share of associated companies' profit after tax

565 

209 

774 

 

 

 

 

 

6 months ended 30 June 2020

 

 

 

 

Revenue

75,863 

31 

75,894 

Gross profit/(loss)

8,915 

(44)

8,871 

Share of associated companies' profit after tax

592 

43 

635 

 

 

 

 

 

Year ended 31 December 2020

 

 

 

 

Revenue

174,458 

52 

174,510 

Gross profit/(loss)

34,851 

(96)

34,755 

Share of associated companies' profit after tax

1,070 

351 

1,421 

 

 

Note 4  Dividends

 

 

6 months ended 

6 months ended 

Year ended 

 

30 June 

30 June 

31 December 

 

2021

2020 

2020 

 

US$'000 

US$'000 

US$'000 

 

 

 

 

2019 final dividend - 12.75p per 10p share

8,594 

8,594 

2020 interim dividend - 5.00p per 10p share

3,511 

2020 final dividend - 17.00p per 10p share

13,150

 

13,150

8,594 

12,105 

 

Subsequent to 30 June 2021, the board has declared an interim dividend of 10p per 10p share. The dividend will be paid on or after 5 November 2021 to those shareholders on the register at the close of business on 15 October 2021.

 

 

Note 5   Share capital

 

 

30 June 

30 June 

31 December 

30 June 

30 June 

31 December 

 

2021 

2020 

2020 

2021 

2020 

2020 

 

Number 

Number 

Number 

US$'000 

US$'000 

US$'000 

Shares of 10p each

 

 

 

 

 

At 1 January

54,490,253

54,461,220 

54,461,220 

9,204

9,200 

9,200 

Issued

-

182,320 

182,320 

-

23 

23 

Redeemed

-

(153,287)

(153,287)

-

(19)

(19)

At period end

54,490,253

54,490,253 

54,490,253 

9,204

9,204 

9,204 

 

 

Note 6  Analysis of movements in cash flow

 

 

6 months ended 

6 months ended 

Year ended 

 

30 June 

30 June 

31 December 

 

2021 

2020 

2020 

 

US$'000 

US$'000 

US$'000 

Operating profit

41,291

6,042 

31,321 

Biological (gain)/loss

(762)

647 

(682)

Disposal of property, plant and equipment

96 

194 

1,008 

Release of deferred profit

(23)

(21)

(58)

Depreciation of property, plant and equipment

10,077 

8,580 

17,776 

Amortisation of intangible assets

83 

82 

165 

Retirement-benefit obligation

(1,862)

690 

2,148 

Share-based payments

241 

108 

609 

Dividends from associated companies

1,216 

1,646 

Operating cash flows before movements

 

 

 

  in working capital

50,357 

16,322 

53,933 

Increase in inventories

(3,229)

(1,287)

(545)

Increase in receivables

(10,312)

(3,025)

(7,574)

(Decrease)/increase in payables

(3,832)

(851)

3,806 

Cash generated by operating activities

32,984 

11,159 

49,620 

Income tax paid

(6,585)

(4,717)

(6,614)

Interest paid

(1,445)

(1,928)

(3,408)

Net cash generated by operating activities

24,954 

4,514 

39,598 

 

 

Note 7  Exchange rates

 

 

 

30 June 

30 June 

31 December 

 

 

2021 

2020 

2020 

US$1=Indonesian Rupiah

-  average

14,273 

14,579 

14,541 

 

-  period end

14,500 

14,285 

14,050 

US$1=Malaysian Ringgit

-  average

4.10 

4.25 

4.20 

 

-  period end

4.15 

4.29 

4.02 

£1=US Dollar

-  average

1.38 

1.26 

1.28 

 

-  period end

1.38 

1.24 

1.37 

 

 

 

 

 

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