REG - M. P. Evans Group - Half-year Report
16/09/2024 07:00
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RNS Number : 2018E M. P. Evans Group PLC 16 September 2024
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 2024.
highlights
§ 5% increase in total crop processed to 759,700 tonnes (2023 - 721,100
tonnes)
§ 6% increase in total production of crude palm oil to 177,000 tonnes (2023 -
166,200 tonnes)
§ 2% increase in mill-gate CPO price to US$771 per tonne (2023 US$755 per
tonne)
§ 24% increase in certified sustainable production to 119,500 tonnes (2023 -
96,500 tonnes)
§ 14% reduction in cost of Group palm product to US$458 per tonne (2023
US$535 per tonne)
§ 78% increase in operating profit to US$41.6 million (2023 US$23.4 million)
§ 81% increase in earnings per share to 44.9p (2023 - 24.8p)
§ 20% increase in interim dividend per share to 15p (2023 - 12.5p)
§ 1% net gearing with net debt US$7.3 million (2023 net cash US$2.5 million)
M.P. Evans chairman, Peter Hadsley-Chaplin, commented: "Following higher
production and higher palm-oil prices, the board is delighted to report a
significantly improved first-half profit, and a 20% increase in the interim
dividend. The second half of the year has, thus far, seen palm-oil prices
strengthen further and, accordingly, the Group is well placed for another
strong result for 2024 as a whole."
16 September 2024
Enquiries:
M.P. Evans Group PLC Telephone: +44 (0) 1892 516333
Peter Hadsley-Chaplin, chairman
Matthew Coulson, chief executive
Luke Shaw, chief financial officer
Cavendish Capital Markets (Nomad and broker) Telephone: +44 (0) 20 7220 0500
Matt Goode, George Lawson (Corporate finance)
Tim Redfern, Harriet Ward (ECM)
Hudson Sandler (Financial PR) Telephone: +44 (0) 20 7796 4133
Charlie Jack, Francis Kerrigan, Francesca Rosser
An analysts' meeting will be held today at 9:30am at the offices of Hudson
Sandler, 25 Charterhouse Square, London EC1M 6AE
Overview
CPO production increased in the first half of 2024 to 177,000 tonnes and
certified sustainable production increased by 24% compared to the same period
in 2023, with all six of the Group's mills now accredited to produce
sustainable palm oil. The Group continued to focus its efforts on being a
responsible producer of Indonesian palm oil. Crop and production expanded once
again, and all Group mills are producing and selling certified sustainable
palm oil. The Group continued to plant new areas in the first half of 2024,
both Group-owned, and for its associated scheme smallholders. In addition, the
Group invested in replanting at its North Sumatran estates. Overall, the total
planted area managed by the Group increased by over 300 hectares to 65,800
hectares by the end of June 2024.
The Group harvested 566,200 tonnes of fresh fruit bunches ("ffb") during the
first half of the year, made up of 437,900 tonnes (2023 - 408,100 tonnes) of
its own crop, and 128,300 tonnes (2023 - 124,900 tonnes) from its associated
scheme-smallholder areas, increases of 7% and 3% respectively. Whilst the
crops were particularly encouraging in the early months of 2024, consistent
with many Indonesian producers, cropping levels slowed somewhat in the latter
part of the first half. This is considered to be a reflection of broader
agronomic and weather conditions but, as was the case in 2023, the Group
continues to expect the harvest in the second half of the year to be higher
than that achieved in the first six months.
Group management worked carefully during the first half of the year to manage
the quality of independent crop being supplied to Group mills. Whilst the
overall amount of independent crop processed by the Group increased by 3% to
193,500 tonnes (2023 - 188,100 tonnes), in some locations there was a decrease
as mill management rejected crop of insufficient quality. This, along with the
ongoing high quality of the input from Group-managed areas, resulted in an
increase in the average extraction rate achieved in Group mills to 23.4% (2023
- 23.1%).
Crude palm oil ("CPO") has traded within a relatively narrow band during the
first half of 2024, with cif Rotterdam prices between US$925 - US$1,100 per
tonne, and averaging US$999 per tonne (2023 first half average US$986 per
tonne). During the period, the Group achieved an average mill-gate price for
its CPO output of US$771 per tonne (2023 US$755 per tonne).
Production costs have fallen in the first half of 2024 when compared to the
same period in 2023, and have continued the trend observed in the second half
of last year as fertiliser costs, one of the Group's largest input costs, have
continued to fall from the peak observed around the end of 2022. The cost of
production from the Group's own areas was US$458 per tonne (2023 US$535 per
tonne). The Group's total cost of production, when all sources of crop are
taken into consideration, was also lower than the first half of last year at
US$529 per tonne (2023 US$574 per tonne). As in 2023, the Group's average cost
of production is expected to fall during the second half of the year. This is
partly as a result of rising production, but also reflects the fact that more
than half of fertiliser application takes place in the first six months of the
year.
In June 2024, the Group announced it had reached an agreement with one of its
minority shareholders to acquire their 5% interest in the majority of the
Group's Indonesian subsidiaries. By doing so, the Group effectively acquired
approximately 1,700 hectares of its own high-quality planted areas. The
agreement to acquire these areas during the year was based on US$9,000 per
planted hectare, reflecting the fact that the Group was able to add to its
majority holding at a price that allowed for a minority shareholding discount.
This compares with the average independent valuation at the end of 2023 of the
Group's majority-held plantings of US$18,400 per hectare. Whilst this
transaction has a limited impact on the results for the first half of 2024, it
will be earnings enhancing for the remainder of the year and beyond.
A combination of higher production and sales with lower unit costs has
resulted in an improved margin, and a significantly higher gross profit of
US$42.1 million (2023 US$23.1 million) during the first half of 2024. The
Group continues to convert profits to cash, with cash generated by operating
activities of US$48.4 million in the period. This cash has been put to good
use, in accordance with the Group's strategy, to invest for ongoing long-term
growth in the Group's existing operations, to acquire additional hectarage,
repay debt, and fund over US$25 million of returns to Group shareholders
through dividends and share buybacks.
The Group remains committed to being a responsible palm-oil producer. Both the
absolute amount and proportion of certified CPO production increased in the
first half of 2024, with 119,500 tonnes (2023 - 96,500 tonnes) produced,
representing 68% (2023 - 58%) of the Group's total output, including that from
independent mills. Further information on the Group's wider environmental,
social and governance ("ESG") activities is included in two separate reports
published in the first half of this year and both are available on the Group's
website: one on ESG and one focusing on the Group's approach to managing and
reducing its carbon emissions (the Taskforce on Climate-related financial
disclosures, or TCFD, report).
Earnings per share increased to 44.9p in the first half of 2024, 81% higher
than the 24.8p in the six months to June 2023. A combination of higher
production and sales with lower costs resulted in this significant increase.
Update on recent acquisitions
During 2023, the Group added over 10,000 planted hectares to its portfolio,
with acquisitions in both Sumatra and East Kalimantan. At Simpang Kiri, 2,100
hectares were added to the estate, and the total planted area is now 4,700
hectares. A significant part of this area continues to be productive and has
added to the total crop harvested. As announced on acquisition, the Group is
replanting some of the new area to help maximise yields in the longer term
and, to date, 1,200 hectares have been, or are in the course of being,
replanted.
At Kota Bangun, 8,300 hectares were acquired towards the end of 2023, made up
of two separate estates, ABK and Nusantara (or NAS). Both are now being
managed as part of the Group's Kota Bangun project with crop being sent for
processing at one of the Group's two mills there. In the short term, the
Group's management team is working hard to improve agronomic standards from
those taken on at acquisition. As a result, the Group expects to see
significant improvements in the coming years from these new areas,
particularly given the underlying quality of the estates.
Dividends
The board is recommending an interim dividend for 2024 of 15p per share (2023
- 12.5p per share), an increase of 20%. This reflects the improved results for
the first half of the year, with earnings per share up by 81%, but also the
board's continuing confidence in the long-term prospects for the Group.
The Group has an unbroken track record, spanning more than thirty years, of
maintaining or increasing normal dividends. As the Group's planted area
continues to increase and the crop from those areas is processed in the
Group's efficiently managed palm-oil mills, so it expects to deliver the
robust cash flows that form the foundation for its progressive dividend
policy.
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 2024 are shown in the following table:
6 months ended 6 months ended Year ended
30 June Increase/ 30 June 31 December
2024 (decrease) 2023 2023
Tonnes % Tonnes Tonnes
Own crops
Kota Bangun 138,900 25 110,900 249,900
Bangka 57,800 - 57,900 138,200
Pangkatan group 79,100 1 78,200 185,000
Bumi Mas 71,300 (5) 75,200 156,400
Musi Rawas 57,400 (7) 61,600 128,900
Simpang Kiri 33,400 37 24,300 64,500
437,900 7 408,100 922,900
Scheme-smallholder crops
Kota Bangun 51,000 10 46,500 100,500
Bangka 33,200 (4) 34,500 85,200
Pangkatan group 2,000 186 700 2,600
Bumi Mas 14,200 6 13,400 29,700
Musi Rawas 27,700 (7) 29,800 60,200
Simpang Kiri 200 - - 300
128,300 3 124,900 278,500
Independent crops purchased
Kota Bangun 67,400 2 66,300 132,000
Bangka 44,200 (8) 48,100 108,600
Pangkatan group 20,700 (30) 29,400 52,600
Bumi Mas 21,800 (29) 30,500 59,500
Musi Rawas 39,400 186 13,800 68,800
193,500 3 188,100 421,500
759,700 5 721,100 1,622,900
Production
Crude palm oil
Kota Bangun 59,700 17 51,200 112,000
Bangka 30,900 (3) 31,700 76,800
Pangkatan group 22,600 (7) 24,300 54,500
Bumi Mas 26,000 (7) 28,000 58,600
Musi Rawas 29,500 23 23,900 60,200
168,700 6 159,100 362,100
Third party mills
Kota Bangun 700 - - 200
Musi Rawas - - 1,600 1,600
Simpang Kiri 7,600 38 5,500 14,600
8,300 17 7,100 16,400
177,000 6 166,200 378,500
Palm kernels
Kota Bangun 13,200 21 10,900 24,200
Bangka 7,900 - 7,900 19,000
Pangkatan group 5,300 - 5,300 12,400
Bumi Mas 4,900 4 4,700 10,300
Musi Rawas 6,200 44 4,300 11,400
37,500 13 33,100 77,300
Third party mills
Kota Bangun 200 - - -
Musi Rawas - - 400 400
Simpang Kiri 1,500 36 1,100 2,900
1,700 13 1,500 3,300
39,200 13 34,600 80,600
Extraction rate % % % %
Crude palm oil
Group mills
Kota Bangun - Bumi Permai 24.6 3 23.9 24.4
Kota Bangun - Rahayu 22.2 4 21.3 21.3
Bangka 22.8 1 22.6 23.1
Pangkatan group 22.3 - 22.4 22.7
Bumi Mas 24.2 3 23.5 23.9
Musi Rawas 23.7 (4) 24.6 24.1
23.4 1 23.1 23.4
Third party mills
Kota Bangun 17.9 - - 20.0
Musi Rawas - - 20.5 20.5
Simpang Kiri 22.4 - 22.5 22.5
Palm kernels
Group mills
Kota Bangun - Bumi Permai 5.6 4 5.4 5.5
Kota Bangun - Rahayu 4.6 10 4.2 4.3
Bangka 5.8 4 5.6 5.7
Pangkatan group 5.2 6 4.9 5.2
Bumi Mas 4.6 15 4.0 4.2
Musi Rawas 5.0 14 4.4 4.5
5.2 8 4.8 5.0
Third party mills
Kota Bangun 4.9 - - 4.5
Musi Rawas - - 4.7 4.7
Simpang Kiri 4.4 (2) 4.5 4.5
Average selling prices US$ US$ US$
CPO (cif Rotterdam) 999 1 986 964
CPO - Group mill gate 771 2 755 729
Palm-kernel oil 1,127 12 1,003 981
Palm kernels - Group mill gate 437 7 410 354
Mill-gate prices
The average commodity price for CPO (cif Rotterdam) during the first half of
2024 was US$999 per tonne (2023 US$986 per tonne) with trading within
approximately US$100 either side of this average. The Group sells its output
based on 'mill-gate' pricing and so receives a lower price than the quoted cif
Rotterdam amount, taking account of freight and insurance costs, but also
allowing for the export taxes and levies that the Indonesian government
imposes. These are charged based on well-established, graduated scales, and
the government publishes updated tariffs each month. During the first half of
2024, the Group achieved an average mill-gate price for its CPO of US$771 per
tonne, 2% higher than the US$755 per tonne in the six months to June 2023.
Sales of the Group's PK were below US$400 per tonne at the start of the year,
but pricing improved, particularly in the second quarter, and by the end of
the first half prices had increased by over US$100 per tonne with some trades
at over US$500 per tonne. The average price for the first half of 2024 was
US$437 per tonne, 7% higher than the US$410 in the six months to June 2023.
Sustainability
The Group is a responsible producer of certified sustainable palm oil. All six
of the Group's mills were certified producers throughout the period, in
accordance with the requirements of the International Sustainability and
Carbon Certification ("ISCC") scheme, and so received credits at all
locations. As a long-standing member of the RSPO, the Group also works towards
securing RSPO certification for all its mills. At the start of 2024, four of
the six Group mills were RSPO accredited, and a fifth accreditation was
granted in the first half of this year. The audit work to support the final,
sixth, certification has taken place early in the second half of this year,
and the Group expects to obtain the final approval for certification so that
all mills will be RSPO accredited before the end of the year.
Being a producer of certified sustainable CPO and PK results in additional
income to the Group, as customers are willing to pay a premium to secure
assured inputs to their production process. The Group's sustainability income
in the first half of 2024 was US$3.0 million, slightly lower than the US$3.2
million in the six months to June 2023. Whilst there was a significant
increase in the Group's certified output, the average premia per tonne fell
when compared to the same period of last year. The average premium for CPO
when sold as certified was US$10.80 (2023 US$16.00) and the equivalent for PK
was US$75.90 (2023 US$108.80). Notwithstanding the reduction in sustainability
premia, the Group remains committed to the production of certified output and
maintaining its sustainability credentials. A significant part of certified
sustainable output ultimately comes to the EU, and falling premia may be a
sign of some market uncertainty relating to the pending EU Deforestation
Regulations (EUDR), due to come into effect at the start of 2025 and which
will require companies to produce new documentation on product traceability.
The Group is working towards compliance with the new requirements at its
estate locations.
Costs
The cost of palm product produced from the Group's own areas reduced in the
first half of 2024 to US$458 per tonne, significantly lower than the US$535
per tonne in the six months to June 2023. Unit costs fell for several reasons,
but most significantly due to the fertiliser costs incurred in the first half
of this year. Fertiliser pricing had been unusually high in 2023, but had
returned towards more normal levels in 2024 and, in addition to this, based on
the phasing of application, usage was a little lower in the first half of this
year. In combination, these two variances were responsible for a fall of over
US$50 per tonne. The Group also achieved some unit-cost savings in
wage-related costs and other efficiency benefits from higher production,
although there was some offset from higher costs at the recently acquired
properties in East Kalimantan. Subject to output levels, unit costs are
expected to fall further in the remainder of 2024.
The total cost of the Group's palm product, taking account of all sources of
crop, was US$529 per tonne in the first half of the year (2023 US$574 per
tonne). The fall in total cost per tonne was not quite as marked as the fall
in cost per tonne from Group areas, as the total cost included the purchase of
crop from independent suppliers. These costs were slightly higher than last
year based on increased CPO prices, and in some cases also elevated due to an
increase in competition for independent crop in certain locations.
Planting
The Group continues to invest in planting, both to increase the total area
available for harvest, and to replant palms that come to the end of their
productive lives to ensure yields are maintained for the longer term. In Musi
Rawas, the Group is planting new areas, both for itself and for its associated
scheme smallholders. A further 220 hectares have been planted during the first
half of the year, bringing the total planted area there to over 10,500
hectares, and the Group expects to be at its target of 11,000 planted hectares
at or around the end of this year. The Group also continues to work with
smallholder farmers in northern Sumatra and membership in the co-operative
schemes around the Pangkatan estates has increased in the first half of this
year. An additional 190 hectares have been planted, bringing the total
smallholder area there, including both Pangkatan and Simpang Kiri, to over
1,500 hectares.
The opportunity to add new planting at the areas acquired at Kota Bangun (ABK
and NAS) is currently being reviewed. Additional planting will only be carried
out if it can be done responsibly and sustainably, and the Group is working
with its environmental consultants to complete the necessary assessments.
Replanting is progressing in the areas acquired at Simpang Kiri last year,
where almost 1,000 hectares are currently being replanted. At the Pangkatan
estates, 250 hectares of replanting is taking place as part of the ongoing
programme there.
New land
Group management continues to be of the view that a planted area of up to
10-14,000 hectares supporting a 60-tonne per hour palm-oil mill is an
efficient operation which can deliver attractive returns over the long term.
Several of the Group's operations are at that stage already, or are working
towards it, and some take in additional crop from external suppliers to
increase mill utilisation. In those locations, the Group is continuing to
review opportunities to add further planted land to its existing portfolio to
maximise the benefit of its investment in milling capacity and to increase the
proportion of its certified sustainable output.
Associated companies
The Group's 40%-owned Malaysian property development associate, Bertam
Properties Sdn Berhad, had a good start to 2024 as it continued to develop and
sell both high-quality and affordable homes and commercial properties in
Penang, Malaysia. The Group's share of their profits for the first half of the
year was US$0.3 million (2023 US$0.2 million). The Group's 38%-owned oil-palm
associate in Indonesia, PT Kerasaan Indonesia, achieved a similar profit to
the first half of last year, with the Group's share being US$0.5 million (2023
US$0.6 million)
Result
The Group recorded revenue of US$163.7 million in the first half of 2024 (2023
US$134.5 million), an increase of 22% on the previous period. The improvement
in revenue is larger than the combined increase in production and pricing
observed in the period as, due to the timing of dispatches, the Group
experienced a fall in inventory during the period, in contrast to the first
half of 2023 when inventory increased. The increase in extraction rates, both
for CPO and PK, also added to revenue and profitability in the first half of
the year. Gross margin was 26% (2023 - 17%), as the benefit of higher prices
and volumes fed through to increased profitability. Additionally, the Group's
lower cost per tonne helped to increase margins, and the Group benefited by
approximately US$2 million from a weaker Indonesian rupiah in the first half
of the year. Gross profit was US$42.1 million (2023 US$23.1 million).
There was an increase in other income during the period to US$1.7 million
(2023 US$1.2 million) as the Group continues to generate more electricity for
sale from the biogas facilities attached to its mills, and prices achieved for
shell sales, ancillary to the main production process, increased. There was a
small increase in the Group's finance cost in the period, to US$1.8 million
(2023 US$1.7 million) as the Group took on new loans with its acquisitions
towards the end of 2023, but the impact of this is being rapidly offset by the
ongoing repayment of the Group's pre-existing term loans. The Group tax charge
inevitably increased when compared to the first half of last year due to the
higher profitability and, after accounting for the Group's share of
associates' results, retained profits were 78% higher at US$31.7 million (2023
US$17.8 million).
CURRENT TRADING AND PROSPECTS
8 months ended 8 months ended
31 August Increase/ 31 August
2024 (decrease) 2023
Tonnes % Tonnes
Own crops 593,900 - 593,700
Scheme-smallholder crops 170,900 (5) 179,100
Independent crops purchased 263,500 (1) 267,100
1,028,300 (1) 1,039,900
During the two months to August 2024, the crops harvested from the Group's own
areas and from the associated scheme-smallholder areas totalled 198,600
tonnes, an average of 99,300 tonnes each month. This is higher than the
94,400-tonne average experienced in the first half of the year. It is lower
than the harvest for the two months to August 2023, hence the total crop for
the eight months to August 2024 is now marginally lower than for the same
period last year. This reflects the fact that the 2023 crop peak occurred in
those months. Whilst the Group may be experiencing some delayed effect of the
dry weather conditions in the latter part of 2023, based on the latest growing
crop analysis, cropping levels are expected to increase in the coming months
leading to a total crop available for processing for the whole year similar to
that in 2023.
Whilst CPO has traded at similar levels (cif Rotterdam) to the first half of
the year during July and August, the Group has been able to achieve prices at
higher levels than the average for the six months to June, likely due to
refiners' supply dynamics. The Group's year-to-date average mill-gate price
for its CPO had increased to US$777 by the end of August, with some tenders
for September delivery at over US$800 per tonne. Whilst current pricing may
not persist if crops increase in the coming months, the levels reached thus
far put the Group in a strong position for 2024 as a whole.
The board remains committed to the Group's strategy, with the Group increasing
its planted hectarage in support of future sustainable growth, and with all
mills producing certified sustainable palm oil. As demonstrated by the results
for the current period, the Group continues to deliver healthy cash flows in
support of attractive shareholder returns, and the prospects for the future
remain very positive.
UNAUDITED CONSOLIDATED INCOME STATEMENT
For the six months ended 30 June 2024
Six months Six months Year
ended ended ended
30 June 30 June 31 December
2024 2023 2023
Note US$'000 US$'000 US$'000
Continuing operations
Revenue 3 163,737 134,469 307,368
Cost of sales (121,628) (111,331) (228,915)
Gross profit 3 42,109 23,138 78,453
Gain on biological assets 185 1,025 551
Foreign-exchange gains/(losses) 640 582 (1,188)
Other administrative expenses (3,120) (2,590) (5,443)
Other income 1,746 1,223 2,923
Operating profit 41,560 23,378 75,296
Finance income 523 600 1,348
Finance costs (1,838) (1,683) (3,810)
Profit before taxation 40,245 22,295 72,834
Tax on profit on ordinary activities (9,392) (5,267) (18,826)
Profit after tax 30,853 17,028 54,008
Share of associated companies' profit after tax 3 808 786 2,390
Profit for the period 31,661 17,814 56,398
Attributable to:
Owners of M.P. Evans Group PLC 30,084 16,586 52,487
Non-controlling interests 1,577 1,228 3,911
31,661 17,814 56,398
US cents US cents US cents
Continuing operations
Basic earnings per 10p share 56.6 30.8 97.6
Diluted earnings per 10p share 56.3 30.7 97.2
Pence Pence Pence
Basic earnings per 10p share
Continuing operations 44.9 24.8 78.1
UNAUDITED CONSOLIDATED BALANCE SHEET
As at 30 June 2024
30 June 30 June 31 December
2024 2023 2023
Note US$'000 US$'000 US$'000
Non-current assets
Goodwill 17,083 11,767 17,083
Other intangible assets 944 1,077 1,012
Property, plant and equipment 482,693 427,936 486,915
Investments in associates 10,418 11,654 10,003
Investments 57 58 59
Deferred-tax asset 1,180 1,020 1,138
Trade and other receivables - 9,232 8,875
512,375 462,744 525,085
Current assets
Biological assets 3,973 4,114 3,788
Inventories 15,121 28,567 24,155
Trade and other receivables 24,370 29,905 23,853
Current-tax asset 9,990 5,740 8,673
Current-asset investments 213 - 270
Cash and cash equivalents 35,709 42,882 39,324
89,376 111,208 100,063
Total assets 601,751 573,952 625,148
Current liabilities
Borrowings 22,820 19,001 21,009
Trade and other payables 24,107 29,080 27,547
Current-tax liabilities 5,520 294 6,279
52,447 48,375 54,835
Net current assets 36,929 62,833 45,228
Non-current liabilities
Borrowings 20,381 21,364 33,413
Deferred-tax liability 21,083 13,478 19,398
Retirement-benefit obligations 12,262 11,199 12,429
53,726 46,041 65,240
Total liabilities 106,173 94,416 120,075
Net assets 495,578 479,536 505,073
Equity
Share capital 6 9,019 9,124 9,062
Other reserves 53,886 54,642 53,263
Retained earnings 423,163 397,605 422,748
Equity attributable to the
owners of M.P. Evans Group PLC 486,068 461,371 485,073
Non-controlling interests 9,510 18,165 20,000
Total equity 495,578 479,536 505,073
UNAUDITED STATEMENT OF CHANGES IN CONSOLIDATED EQUITY
For the six months ended 30 June 2024
Six months Six months Year
ended ended ended
30 June 30 June 31 December
2024 2023 2023
US$'000 US$'000 US$'000
Profit for the period 31,661 17,814 56,398
Other comprehensive expense for the period (426) (1,352) (1,306)
Total comprehensive income for the period 31,235 16,462 55,092
Share buybacks (3,516) (5,129) (9,678)
Dividends paid (23,341) (20,760) (29,739)
Acquisition of non-controlling interests (14,041) - -
Credit to equity for equity-settled share-based payments 168 119 554
Transactions with owners (40,730) (25,770) (38,863)
At 1 January 505,073 488,844 488,844
Balance at period end 495,578 479,536 505,073
UNAUDITED CONSOLIDATED CASH-FLOW STATEMENT
For the six months ended 30 June 2024
Six months Six months Year
ended ended ended
30 June 30 June 31 December
2024 2023 2023
Note US$'000 US$'000 US$'000
Net cash generated by operating activities 7 48,380 20,411 83,642
Investing activities
Acquisition of subsidiaries, net of cash acquired - - (34,516)
Purchase of property, plant and equipment (9,555) (23,824) (38,282)
Purchase of intangible assets (24) - (25)
Interest received 337 227 600
Increase in receivables from smallholder co-operatives (22) (2,973) (6,161)
Bank deposits treated as current asset investments - - (266)
Proceeds on disposal of property, plant and equipment 47 66 6,997
Net cash used by investing activities (9,217) (26,504) (71,653)
Financing activities
Acquisition of non-controlling interests 5 (6,000) - -
Repayment of borrowings (9,916) (8,674) (17,405)
Dividends paid to Company shareholders (21,891) (20,035) (28,188)
Dividends paid to non-controlling interest (145) (72) (155)
Buy back of Company shares (3,516) (5,129) (9,678)
Net cash used by financing activities (41,468) (33,910) (55,426)
Net decrease in cash and cash equivalents (2,305) (40,003) (43,437)
Cash and cash equivalents at 1 January 39,324 82,503 82,503
Effect of foreign-exchange rates on cash and cash
equivalents (1,310) 382 258
Net cash and cash equivalents at period end 35,709 42,882 39,324
NOTES TO THE INTERIM STATEMENTS
For the six months ended 30 June 2024
Note 1 General information
The financial information for the six-month periods ended 30 June 2024 and
2023 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
2023 is abridged from the statutory accounts. The 31 December 2023 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 2023. 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 2023 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$'000
6 months ended 30 June 2024
Revenue 163,737 - - 163,737
Gross profit 42,109 - - 42,109
Share of associated companies' profit after tax 459 349 - 808
6 months ended 30 June 2023
Revenue 134,469 - - 134,469
Gross profit 23,138 - - 23,138
Share of associated companies' profit after tax 545 241 - 786
Year ended 31 December 2023
Revenue 307,320 - 48 307,368
Gross profit 78,405 - 48 78,453
Share of associated companies' profit after tax 1,107 1,283 - 2,390
Note 4 Dividends
Six months Six months Year
ended ended ended
30 June 30 June 31 December
2024 2023 2023
US$'000 US$'000 US$'000
2022 final dividend - 30p per 10p share - 20,035 20,035
2023 interim dividend - 12.5p per 10p share - - 8,153
2023 final dividend - 32.5p per 10p share 21,891 - -
21,891 20,035 28,188
Subsequent to 30 June 2024, the board has declared an interim dividend of 15p
per 10p share. The dividend will be paid on or after 1 November 2024 to those
shareholders on the register at the close of business on 11 October 2024.
Note 5 Acquisition
On 31 May 2024, the Group completed the purchase of the 5% minority holding in
the majority (70% by Group-owned planted hectarage) of its Indonesian
subsidiary trading companies.
The total cost of the purchase was US$14.0 million. The Group's minority
partner has used the majority of the proceeds to repay an outstanding US$8.0
million loan from the Group and, as a result, the net cash outflow to the
Group resulting from the transaction was US$6.0 million.
Note 6 Share capital
30 June 30 June 31 December 30 June 30 June 31 December
2024 2023 2023 2024 2023 2023
Number Number Number US$'000 US$'000 US$'000
Shares of 10p each
At 1 January 53,289,690 54,230,888 54,230,888 9,062 9,179 9,179
Issued - 50,000 50,000 - 6 6
Redeemed (340,134) (492,792) (991,198) (43) (61) (123)
At period end 52,949,556 53,788,096 53,289,690 9,019 9,124 9,062
Note 7 Analysis of movements in cash flow
Six months Six months Year
ended ended ended
30 June 30 June 31 December
2024 2023 2023
US$'000 US$'000 US$'000
Operating profit 41,560 23,378 75,296
Biological gain (185) (1,025) (551)
Disposal of property, plant and equipment 534 1 259
Release of deferred profit (22) (36) (92)
Depreciation of property, plant and equipment 13,196 11,840 24,102
Amortisation of intangible assets 92 90 180
Retirement-benefit obligation 593 115 905
Share-based payments 168 119 554
Operating cash flows before movements
in working capital 55,936 34,482 100,653
Decrease/(increase) in inventories 9,035 (5,455) 1,023
(Increase)/decrease in receivables (2,493) 5,005 11,814
(Decrease)/increase in payables (2,435) 1,107 (6,460)
Cash generated by operating activities 60,043 35,139 107,030
Dividends from associated companies - - 3,566
Income tax paid (9,825) (13,045) (23,144)
Interest paid (1,838) (1,683) (3,810)
Net cash generated by operating activities 48,380 20,411 83,642
Note 8 Exchange rates
30 June 30 June 31 December
2024 2023 2023
US$1=Indonesian Rupiah - average 15,897 15,053 15,236
- period end 16,375 14,993 15,397
US$1=Malaysian Ringgit - average 4.73 4.46 4.56
- period end 4.72 4.67 4.60
£1=US Dollar - average 1.26 1.24 1.25
- period end 1.26 1.27 1.27
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