26 October 2021
Anglo-Eastern Plantations Plc
(“AEP” or the “Company”)
Trading Statement
Anglo-Eastern Plantations Plc, a major producer of palm oil and some rubber across Indonesia and Malaysia, today announces a trading update covering the period to 30 September 2021.
Operational and financial performance
- For the first nine months ended 30 September 2021, our own production of fresh fruit bunches (“FFB”) was 915,690mt, an increase of 13% compared to the same period in 2020 (9M20: 812,460mt). North Sumatera and Kalimantan plantations contributed substantially to the increase of internal crop production due to better weather conditions and an increase in matured area. FFB bought-in was 878,590mt, an increase of 35% in comparison with the same period in 2020 (9M20: 651,030mt). Third parties' harvest similarly peaked, resulting in higher bought-in crops in the Bengkulu, Riau and Kalimantan regions. Total Crude Palm Oil (“CPO”) produced was 364,040mt, an increase of 23% compared to the corresponding period in 2020 (9M20: 295,330mt) due to higher FFB supplied from both our own estates and bought-in crops.
- CPO price ex-Rotterdam averaged $1,156/mt for the first nine months of 2021. This represents a significant increase of 74% from the average price of $665/mt recorded in the corresponding period of 2020. CPO ex-Rotterdam closed at $1,360/mt on 8 October 2021 compared to $1,050/mt at the start of the year. Our Group's average ex-mill price for CPO for the first nine months of the year was also higher by 36% at $731/mt (9M20: $538/mt).
- The Group's balance sheet remains strong. The Company's Long Term Development Loans of $2.7 million have been fully repaid as at 30 September 2020 and so the Group has no bank borrowing. The Group had net cash of $192.2m as at 30 September 2021 (3Q20: $90.2m).
Development
- AEP has plantations across Indonesia and Malaysia, amounting to some 128,000 hectares, of which approximately 74,811 hectares (including Plasma) are planted. The Group's new planting and replanting for the nine months ended 30 September 2021 totalled 2,129 hectares (including Plasma) . Plasma planting for the period was 352 hectares (9M2020: 271 hectares)
- The concrete pilling work for the construction of the seventh mill in North Sumatera has been completed. The fabrication of the loading ramp, clarification tanks and conveyors have also been completed. The tender for building the effluent treatment plant has recently been approved and awarded at a cost of $2.1 million. As the mill is located on peat, the plant has to be built according to strict specifications laid out by environmental laws in Indonesia. The final cost of the effluent treatment plant, including an oil recovery station, is therefore estimated to cost $4.2 million, more than originally expected. The mill is likely to be completed in Q3 2022.
- As economic activities in Indonesia continue to pick up, the state authorities which had suspended the uptake of electricity from our biogas plant in Blankahan in North Sumatera from Q2 2020 has now resumed the purchase of electricity.
Outlook
- CPO prices are expected to be strong for the remaining part of the year due to strong demand as the Covid pandemic eases worldwide. Projected wetter-than-normal weather in most parts of Indonesia with elevated flood risks for the last quarter of 2021 could hamper the robust crop production, which in turn could sustain the current trend of CPO prices.
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