Revenue falls, profit improves for Anglo-Eastern Plantations

Anglo-Eastern Plantations, a producer of palm oil and rubber with operations in Indonesia and Malaysia, reported first-half revenue of $166.7m in its interim results on Friday, down 4% from $173.4m in the same period last year.

The London-listed firm said that despite the revenue decline, profit before tax after accounting for biological assets (BA) movement increased 8.6% to $35.2m, up from $32.5m in the first half of 2023.

It said the growth in profit was largely driven by reduced manuring costs due to lower fertiliser prices, and an increase in the value of biological assets, reflecting better crop conditions.

Basic earnings per share rose significantly to 70.58 cents, compared to 50.73 cents in the prior year.

However, the group’s fresh fruit bunch (FFB) production decreased by 5% due to lower yields from older trees in Sumatra and reduced external crop purchases.

Operational efficiency improved with a gross profit margin increase to 21.8%, compared to 19.2% in the first six months of 2023.

The average crude palm oil (CPO) price ex-Rotterdam rose slightly to $1,018 per metric ton (mt), but the Group’s average ex-mill price was marginally lower at $749 due to competitive pricing factors.

Anglo-Eastern also noted a decrease in cash and cash equivalents, which fell to $150.8m from $167.1m at the end of 2023.

The reduction was primarily due to significant investments, capital expenditure, and losses from currency exchange fluctuations.

Looking ahead, Anglo-Eastern anticipated increased palm oil production in the second half of 2024, though it expected downward pressure on CPO prices due to weaker demand from major importers and increased global production of competing vegetable oils.

Despite the challenges, domestic initiatives in Indonesia, such as the Biodiesel B35 programme, were expected to support prices.

The group was optimistic about its performance for the remainder of the year, despite the ongoing risks of price fluctuations, currency exchange volatility, weather impacts, and regulatory changes.

At 1126 BST, shares in Anglo-Eastern Plantations were down 0.37% at 615.7p.

Reporting by Josh White for Sharecast.com.