Anglo Eastern Plantations : Interim Report 30 June 2023

Anglo-Eastern Plantations Plc

Company Number: 1884630

INTERIM REPORT 30 JUNE 2023

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

Sinar Mas Land Plaza, 3rd Floor #301

Jl. Pangeran Diponegoro No.18

Kelurahan Madras Hulu

Kecamatan Medan Polonia

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 6ZZ

United Kingdom

Solicitors

Withers LLP

20 Old Bailey

London EC4M 7AN

United Kingdom

Broker

Panmure Gordon (UK) Limited

40 Gracechurch St

London EC3V 0BT

United Kingdom

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Chairman's Interim Statement

The interim results for the Group for the six months to 30 June 2023 are as follows:

Revenue from continuing operations for the six months to 30 June 2023 was $173.4 million, 30% lower than $249.2 million reported for the same period of 2022. The Group's gross profit from continuing operations was $33.2 million compared to $90.3 million for the first six months of 2022. Overall profit before tax, after biological assets ("BA") movement, from continuing operations for the first half of 2023 was 64% lower at $32.5 million against $89.5 million for the corresponding period in 2022. There was no reversal of impairment losses for the first half of 2023 compared to a net reversal of impairment losses of $0.2 million for the first half of 2022. The BA movement adjustment from continuing operations for the first half of 2023 was a credit of $0.3 million as compared to a debit of $5.3 million for the same period last year. The lower profit was mainly attributed to lower Crude Palm Oil ("CPO") prices, as well as lower crop productions in Bengkulu and North Sumatra and lower third party crops.

Fresh Fruit Bunches ("FFB") production from continuing operations for the first half of 2023 was 5% lower at 522,700mt compared to 550,800mt for the same period in the previous year due to lower production in Bengkulu and North Sumatera regions. The harvest in Bengkulu was lower by 16% due primarily to the reduction of almost 1,300ha of matured area of which 985ha was replanted in 2022 while another 682ha was cleared for replanting in the first half of 2023. Production in Kalimantan continued to recover by registering a 10% increase in harvest with 500ha coming to maturity in the first half of 2023. Bought-in crops for the first half of 2023 decreased by 10% to 501,400mt from 557,600mt for the same period last year. The 20% increase in third party crops in Kalimantan could not off-set a 14% decrease in bought in crops in Bengkulu and North Sumatera. Lower crop trend faced by our estates in North Sumatera and Bengkulu was also experienced by local smallholders and farmers.

Operational and financial performance

For the six months ended 30 June 2023, gross profit margin from continuing operations decreased to 19.2% from 36.2% as the Group experienced lower CPO and palm kernel prices.

CPO price ex-Rotterdam averaged $991/mt for the first six months to 30 June 2023, 40% lower than $1,640/mt over the same period in 2022. The rally in the first three months of 2022 was built upon; speculation of unfavourable weather conditions in prime soybean- producing countries which have adversely affected the supply of soybean oil (of which CPO is the closest substitute), the gradual re-opening of the world economy after the ravage of Covid-19 and the disruption to supplies because of the Russia-Ukraine conflict. As a result, the Group's average ex-mill price was lower by 27% at $751/mt for the same period (H2 2022: $1,035/mt). The ex-mill prices are normally at a discount to ex-Rotterdam prices as buyers factor in logistic charges and Indonesian CPO tax and levy, which they have to bear. Palm kernel prices were also lower by 55% at the average price of $361/mt against $808/mt in the same period last year.

Profit after tax from continuing operations for the six months ended 30 June 2023 was 65% lower at $24.1 million, compared to a profit after tax from continuing operations of $68.8 million for the first six months of 2022.

The resulting basic earnings per share from continuing operations for the period was 50.73cts (H1 2022: 144.73cts).

Anglo-Eastern Plantations Plc

2

Chairman's Interim Statement (continued)

The Group's balance sheet remains strong with no outstanding bank loans. Net assets as at 30 June 2023 were $605.5 million compared to $585.3 million as at 30 June 2022 and $573.0 million as at 31 December 2022. The increase in net assets from the last interim report was attributed to profit during the period. The Indonesian Rupiah has appreciated by 4% against the US dollar in the first half of 2023.

As at 30 June 2023, the Group had cash and cash equivalents including short-term investments known as fixed deposits with banks of $261.3 million (H1 2022: $246.8 million, 31 December 2022: $277.0 million). The Group remitted in advance about $10 million to the Company's Registrar for payment of a dividend resulting in lower cash position at 30 June 2023 compared to 31 December 2022.

Operating costs

Operating costs for the Indonesian operations were lower in the first half of 2023 compared to the same period in 2022 mainly due to lower volume and prices paid for third party crops. This helped to offset higher maintenance costs in plantations and mills and also higher harvesting costs arising from the increase in newly matured area. Fertiliser costs rose sharply by 7.5% in the first half of 2023 to $17.0 million from $15.8 million for the corresponding period in 2022. We have recently concluded a tender to purchase fertilisers for the second half of 2023 and we are pleased to report that prices of fertiliser have corrected sharply by as much as 40% since peaking in the first half of 2023. Transport costs have also increased significantly by 54% to $4.3 million from $2.8 million for the corresponding period in 2022 due to increases in diesel prices.

Anglo-Eastern Plantations Plc

3

Chairman's Interim Statement (continued)

The Group's six mills processed a total of 1,015,600mt in FFB for the first half of 2023, a 9% decrease compared to 1,112,100mt for the same period last year.

Overall CPO produced for the first half of 2023 was 7% lower at 210,900mt from 227,800mt for the corresponding period in 2022. The oil extraction rate for the first half of 2023 was 20.8%, slight improvement compared to 20.5% for the same period last year.

Commodity prices

The CPO price ex-Rotterdam for the first half of 2023 averaged $991/mt, 40% lower than last year (H1 2022: $1,640/mt). CPO price started the year at $1,060/mt and generally traded within a 12% range peaking at $1,100/mt in early January and March 2023 before dropping to a low of $860/mt in late May 2023. CPO price recovered slightly to close at $955/mt at 30 June 2023. The trend of CPO price in the first half of 2023 reflected the increase in inventory of soft oils amidst reports of a slowdown in global demand.

Rubber price averaged $1,307/mt, 22% lower than H1 2022 at $1,670/mt.

Development

The Group's planted areas at 30 June 2023 comprised:

Anglo-Eastern Plantations Plc