Anglo Eastern Plantations : Interim Report 30 June 2021

Anglo-Eastern Plantations Plc

Company Number: 1884630

INTERIM REPORT 30 JUNE 2021

Company addresses

London Office

Anglo-Eastern Plantations Plc

Quadrant House, 6th Floor

4 Thomas More Square

London E1W 1YW

United Kingdom

Malaysia Office

Anglo-Eastern Plantations Management Sdn Bhd

7th Floor, Wisma Equity

150 Jalan Ampang

50450 Kuala Lumpur

Malaysia

Tel: 60 (0)3 2162 9808

Fax: 60 (0)3 2164 8922

Indonesia Office

PT Anglo-Eastern Plantations Management Indonesia 3rd Floor, Wisma HSBC, Jalan Diponegoro, Kav 11 Medan 20152

North Sumatera Indonesia

Secretary and registered office Anglo-EasternPlantations Plc (Number 1884630)

(Registered in England and Wales) CETC (Nominees) Limited Quadrant House, 6th Floor

4 Thomas More Square London E1W 1YW United Kingdom

Company website

https://www.angloeastern.co.uk/

Company advisers

Auditors

BDO LLP

55 Baker Street

London W1U 7EU

United Kingdom

Principal Bankers

National Westminster Bank Plc Liverpool Street Station

216 Bishopsgate London EC2M 4QB United Kingdom

The Hong Kong and Shanghai Banking

Corporation Limited

Wisma HSBC

Jalan Diponegoro, Kav 11

Medan 20152

North Sumatera

Indonesia

PT Bank DBS Indonesia

Uniplaza Building

Jalan Letjen MT Haryono A-1

Medan 20231

North Sumatera

Indonesia

RHB Bank Bhd

Podium Block, Plaza OSK

Jalan Ampang

50450 Kuala Lumpur

Malaysia

Registrars

Computershare Investor Services PLC

The Pavilions

Bridgwater Road

Bristol BS99 6ZY

United Kingdom

Solicitors

Withers LLP

20 Old Bailey

London EC4M 7AN

United Kingdom

Broker

Panmure Gordon (UK) Limited

One New Change

London EC4M 9AF

United Kingdom

1

Chairman's Interim Statement

As of today, the world continues to struggle with the fallout from the Covid-19 pandemic with worldwide infections exceeding two hundred and twelve million and more than four million reported deaths. While vaccination efforts are picking up in many parts of the world, several countries are battling fresh Covid-19 infections. The emergence of a deadly Delta variant which is more contagious and transmissible has accelerated the pandemic especially in places where the vaccination of the mass population is making slow progress. The resurgence of infection brought renewed and expanded lockdowns in both Malaysia and Indonesia where the Group operates. The Indonesian government recently imposed large- scale movement restrictions to curb a spike in new infections as healthcare services are overwhelmed by increasing number of patients. In Malaysia despite a surge in the number of Covid infections, the lockdown was relaxed to allow interstate travel in certain circumstances and some social and commercial activities.

Our operations in Indonesia located mainly in remote plantations, away from main cities are generally spared from the lockdowns which are concentrated in populated cities and towns where infection rates are high. However, we are certainly not spared as our Indonesian operations recently recorded a spike and doubling of employees who have tested positive for the virus in Bengkulu and Kalimantan regions. We continue to reiterate to our employees to observe established safety protocols. We also encourage our employees to register promptly for the government vaccination programs. There are no reported Covid cases in the Malaysian operation probably due to the small number of employees and its remote location.

The interim results for the Group for the six months to 30 June 2021 are as follows:

Revenue for the six months to 30 June was $201.1 million, 63% higher than $123.1 million reported for the same period of 2020. The Group's gross profit was $59.8 million compared to $21.8 million for the first six months of 2020. Overall profit before tax after biological assets ("BA") movement for the first half of 2021 increased more than three fold to $58.2 million against $16.8 million for the corresponding period in 2020. The overall profit includes a reversal of impairment loss of $0.1 million for the first half of 2021 compared to an impairment loss of $2.5 million for the first half of 2020. The BA movement adjustment for the first half of 2021 was a credit of $4.0 million against a debit of $0.3 million in the last period. The higher profit was attributed to the higher Crude Palm Oil ("CPO") prices and increased production.

Fresh Fruit Bunches ("FFB") production for the first half of 2021 was 15% higher at 586,500mt compared to 511,700mt for the same period last year due to better weather conditions and an increased matured area. Our young palms in North Sumatera and Kalimantan performed exceptionally well contributing to the higher production numbers. Bought-in crops for the first half of 2021 also increased by 37% to 583,400mt from 425,400mt mainly due to the increase of crop purchases in the Bengkulu region.

Operational and financial performance

For the six months ended 30 June 2021, gross profit margin increased to 29.8% from 17.7% as the Group experienced higher CPO and palm kernel prices.

CPO price ex-Rotterdam averaged $1,122/mt for the first six months to 30 June 2021, 73% higher than $648/mt over the same period in 2020. Our Group's average ex-mill price for CPO was higher at $706/mt for the same period (H1 2020: $551/mt). The ex-mill prices are normally at a discount to ex-Rotterdam prices as buyers are required to pay logistic charges and Indonesian CPO tax and levy.

Anglo-Eastern Plantations Plc

2

Chairman's Interim Statement (continued)

Profit after tax for the six months ended 30 June 2021 was $45.9 million, compared to a profit after tax of $12.5 million for the first six months of 2020.

The resulting basic earnings per share for the period was 96.79cts (H1 2020: 26.35cts).

The Group's balance sheet remains strong. Net assets as at 30 June 2021 were $558.2 million compared to $493.2 million as at 30 June 2020 and $528.6 million as at 31 December 2020. The increase in net assets from the last interim report was attributed to higher profit and lower capital expenditure. The Indonesian Rupiah has depreciated by 3% against the US dollar in the first half of 2021.

As at 30 June 2021, the Group had cash and cash equivalents, net of loans and borrowings, of $159.1 million (H1 2020: $88.7 million, 31 December 2020: $115.2 million). The external bank borrowings as at 30 June 2020 of $2.7 million which was part of the first half of $88.7 million as mentioned above were fully repaid in 2020. The Group has no bank borrowing in 2021.

Operating costs

Operating costs for the Indonesian operations were higher in the first half of 2021 compared to the same period in 2020 mainly due to the increase in bought-in crops from third parties, higher upkeep of plantations and mills and higher harvesting cost related to the increase in production and the increase in matured area.

The Group's six mills processed a total of 1,156,500mt in FFB for the first half of 2021, a 26% increase compared to 918,100mt for the same period last year. The higher throughput was due to the higher FFB supplied from both our own estates and bought-in crops from third parties as explained earlier.

Anglo-Eastern Plantations Plc

3

Chairman's Interim Statement (continued)

Overall CPO produced for the first half of 2021 was 26% higher at 238,700mt from 189,900mt. The oil extraction rate for the first half of 2021 was 20.6% compared to 20.7% in the same period last year. External crops made up 50% of the crop processed compared to 46% in the first half of 2020, which have historically always had a lower oil content.

Commodity prices

The CPO price ex-Rotterdam for the first half of 2021 averaged $1,122/mt, 73% higher than last year (H1 2020: $648/mt). The price was volatile for the first half of 2021. It started the year at $1,014/mt, gradually trended upwards to peak in May at $1,345/mt before dropping to a low of $975/mt towards the middle of June, before recovering and closing at $1,050/mt on 30 June 2021. The rally in the first half of 2021 was built upon speculation of unfavourable weather conditions in prime soybean-producing countries which may adversely affect the supply of soybean oil. This has resulted in a positive spill-over effect in the demand for CPO which is the closest substitute for soybean oil.

Rubber price averaged $1,734/mt, 48% higher than H1 2020 at $1,174/mt.

Development

The Group's planted areas at 30 June 2021 comprised:

Anglo-Eastern Plantations Plc