TIDMMPE
RNS Number : 4796J
M. P. Evans Group PLC
12 September 2016
M.P. EVANS GROUP PLC
M.P. Evans Group PLC ("MP Evans" or "the Group"), a producer of
Indonesian palm oil, announces its unaudited preliminary results
for the six months ended 30 June 2016.
Highlights
-- Profit of US$11.7 million on trading and disposal of investment in NAPCo
-- Fall in crop of 9% following exceptional dry weather
-- Half-year profit on continuing operations lower by US$0.3 million (4%)
-- Profit for the period US$18 million
-- Oil extraction continues at excellent levels
-- Good planting momentum: 1,980 hectares on new projects, including smallholder areas
-- CPO price similar to previous year and has strengthened substantially since 30 June
Commenting on the results, the chairman of M.P. Evans, Peter
Hadsley-Chaplin, said: -
"The increased profit in the first half of 2016 reflects the
one-off gain from the sale of the Group's NAPCo shares, offset by
lower plantation earnings, following a reduction in oil-palm ffb
crops, caused by exceptionally dry weather. Whilst palm-oil prices
traded around the levels seen in the first half of 2015, the market
has, since then, staged a welcome recovery in the second half,
which augurs well for the Group's new, increased focus on palm
oil."
12 September 2016
Enquires:
M.P. Evans Group PLC 020 7796 4133 on 12 September
2016 only
Thereafter telephone
01892 516333
Peter Hadsley-Chaplin Chairman
Tristan Price Chief executive
Matthew Coulson Chief financial officer
Peel Hunt LLP 020 7418 8900
Dan Webster
Adrian Trimmings
George Sellar
Hudson Sandler 020 7796 4133
Charlie Jack
Bertie Berger
An analysts' meeting will be held today at 9.30 a.m. at the
offices of Hudson Sandler, 29 Cloth Fair, London EC1A 7NN.
OVERVIEW
The profit for the first half of 2016 stood at US$18.0 million
compared with US$15.4 million for the first half of 2015. This
result reflects the profit made by the Group on selling its shares
in The North Australian Pastoral Company Pty Limited ("NAPCo"), but
poorer results from its plantation operations compared with 2015,
following an extended period of drought in some of the Group's
areas.
For some time, the Group's board has been of the view that the
interests of shareholders would be best served by adopting a
strategy that focussed on plantation operations, securing future
growth by further investment in plantation land to generate
continuing growth in crops, revenue and profit. As recorded in the
2015 annual report, the Group sold its Australian cattle-fattening
property, Woodlands, in December 2015. Subsequently, in May 2016,
the Group reached agreement for the sale of its investment in NAPCo
for A$107 million and this sale too has now been completed. These
two disposals end the Group's interest in the Australian cattle
sector and have provided it with the means to execute its strategy
of expansion in the plantation sector. The Group is continuing to
develop the remaining areas on its existing projects. In Kalimantan
and Bangka, planting is nearing completion leaving Musi Rawas as
the focus of its development activity. Between these three
projects, the Group expects to plant a further 6,400 hectares for
itself and 3,200 hectares for smallholder co-operatives, a total of
9,600 hectares. Additionally, the Group is exploring the
acquisition of smaller parcels of land, ideally amounting in total
to 4,000-5,000 hectares, close to its Kalimantan project, to bring
it to an optimal operational size. In the short to medium term, the
Group therefore aims to develop, either for itself or its
smallholders, approximately a further 14,000 hectares. In the
longer term, the Group plans to continue to acquire new areas of
sustainable oil palm of a suitable economic size. Increased
hectarage is the basis for sustained future crop and revenue
growth.
The dry weather notably affected the Group's operations in its
new projects in Kalimantan and, most especially, in Bangka. The
Group's operations in North Sumatra and the results of its PT Agro
Muko ("Agro Muko") joint venture in Bengkulu were less affected. In
total, the crop on the Group's areas fell by 9% from 187,100 tonnes
to 170,300 tonnes; that on the areas of its smallholder
co-operatives falling by 15% from 46,800 tonnes to 39,600 tonnes.
The upward momentum in crops will resume once normal rainfall
re-establishes itself. The Group's palms are on average a young 7.9
years old (its associated smallholder co-operatives 5.2 years), and
so under normal conditions are still increasing yields per hectare
as they age. The commodity price of crude palm oil ("CPO") rose
from the low level seen at the end of 2015 to above US$700 per
tonne in the middle of March, where it traded consistently for some
three months before weakening a little at the very end of the half
year. The average Rotterdam c.i.f. price for the period was US$668
per tonne compared with US$673 for the equivalent period in
2015.
The first half of 2016 saw good progress on planting in the new
projects, with a further 700 hectares planted in Musi Rawas and 480
hectares in Kalimantan, mostly in areas now protected by a newly
constructed flood-management bund. The first two phases of the bund
have progressed faster than expected due to the dry weather that
adversely affected crop. Some modest additional planting of 60
hectares in Bangka brought the Group's new planting in the period
to 1,240 hectares. Additionally, across the three new projects, 740
hectares have been planted in the smallholder co-operative
areas.
In addition to the special dividend of 5 pence per share paid on
17 August 2016 following the disposal of the Group's investment in
NAPCo, the board has declared an interim dividend of 2.25 pence per
share (2015: 2.25p per share). The board has resolved to stop
offering a scrip-dividend alternative to a cash dividend payment
given the Group's strong balance-sheet position following the sale
of its investment in NAPCo. The dividend will be paid on or after 4
November 2016 to shareholders on the register at the close of
business on 21 October 2016.
THE PALM-OIL MARKET
The average CPO price in the first half of 2016 was US$668 per
tonne, only US$5 lower than the average price recorded for the
first half of 2015. However, the price actually received by
producers of Indonesian palm oil was reduced by the introduction of
a new tax in July 2015, an 'export levy', at a flat rate of US$50
per tonne. This new tax supplements the existing export tax which
operates at CPO prices above US$750 per tonne. The export tax was
revised at the time the export levy was introduced, so that the
total of export tax and export levy payable at prices above US$750
per tonne are broadly unchanged. Hence the export levy effectively
only increases the tax burden at CPO prices below US$750 per tonne,
as has been the case during the first half of 2016.
CPO prices started the year at the low level of US$580 per
tonne. The traditional increase in demand ahead of Chinese New
Year, in early February 2016, saw prices rise to a level just under
US$650 per tonne. Reduced stocks of CPO, increasing biodiesel
production in Indonesia and strengthening concern over the impact
of dry weather on crops in South East Asia, supported a further
rise in the price to a level above US$700 per tonne, where it
traded until mid-June before finishing the period slightly lower at
US$655 per tonne. It remained at this level during July but
strengthened substantially in August to its current level of more
than US$750 per tonne.
RESULTS FOR THE PERIOD
Majority-owned operations
Crops
Crops in the second quarter of 2016 fell behind the levels of
2015 in all of the Group's areas. By the end of June 2016, the
Group's crops of 170,300 tonnes in the first half were 9% below the
187,100 tonnes harvested in 2015.
This fall in crop was not uniform across the Group's different
areas of operation. Estates in Sumatra experienced a modest
reduction of 5%, those in Kalimantan 7%, but the Group's project on
Bangka suffered a fall of 23% in its crop (see table below). This
last project normally experiences a mild annual dry spell, although
in this case the extreme period of dryness beginning at the end of
2014 did not abate until the start of 2016. Weather of this nature
is most unusual, and the cumulative effect of such an extended
period of low rainfall has had a dramatic effect on production of
fresh fruit bunches ("ffb"). Whilst the palms themselves are not at
risk, lack of rain inhibits the formation of inflorescences which
reduces the potential for the palm to produce new ffb. Once a more
normal pattern of rainfall re-establishes itself, the palm begins a
new cycle of production, often resulting in a period of 'flush'
yields 18-24 months after adequate moisture is again available to
support palm growth. In all of the Group's areas of operation,
rainfall in the second quarter improved growing conditions.
The smallholder co-operative areas experienced a similar
reduction in crop to that in the Group's own areas in the same
project. Overall, smallholder crop fell from 46,800 tonnes to
39,600 tonnes. Purchases of outside crop continued in Kalimantan,
although at the slightly lower level of 9,400 tonnes as compared
with 10,500 tonnes in the previous year. Purchases of outside crop
are made in Pangkatan only during high-cropping periods when they
can be purchased at an attractive price. In 2016, the Group has
delayed these purchases because of both the dry weather pattern and
the timing of the Hari Raya religious festival.
Production
The Group commissioned its new mill on Bangka in May this year.
The project comprises: a 45-tonne-per-hour mill (expandable to 60
tonnes); a composting facility, where the empty fruit bunches are
turned into a valuable organic compost which is returned to the
field; and a biogas plant, where methane is captured from mill
effluent and used to generate electricity. The project was
completed on time and within budget.
Whilst crop has been lower than in the previous year, both oil-
and kernel-extraction rates remain at high levels. In Kalimantan,
an oil-extraction rate of 26.0% was achieved in the first half of
2016, an improvement on the already-high level of 25.6% recorded in
the first half of 2015. Oil extraction also improved in Pangkatan
from 23.2% in 2015 to 23.6%. The Bangka mill managed to achieve an
oil-extraction rate of 23.7% in its first weeks of operation.
Throughput at all three mills has been maintained at optimal
levels. The Group expects capacity utilisation in its newest mills
to increase as plantings on the new projects mature and the yield
per hectare of ffb increases.
Crops, production and selling-price details for the
majority-owned estates are set out as follows:-
6 months 6 months Year
ended ended ended
30 June Increase/ 30 June 31 December
2016 (decrease) 2015 2015
Tonnes % Tonnes Tonnes
Crops
Own crops
Pangkatan group 60,300 61,700 148,900
Simpang Kiri 18,900 21,800 44,200
--------- --------- ------------
79,200 (5) 83,500 193,100
`
Kalimantan 67,000 (7) 72,300 164,500
Bangka 24,100 (23) 31,300 66,300
--------- --------- ------------
170,300 (9) 187,100 423,900
========= =========== ========= ============
Smallholder co-operative
crops
Kalimantan 29,700 (8) 32,200 70,400
Bangka 9,900 (32) 14,600 30,300
--------- --------- ------------
39,600 (15) 46,800 100,700
========= =========== ========= ============
Outside crop purchased
Kalimantan 9,400 (10) 10,500 21,400
Pangkatan - (100) 3,500 16,300
--------- --------- ------------
9,400 (33) 14,000 37,700
========= ========= ============
Production
Crude palm oil
Kalimantan 27,700 (6) 29,500 64,300
Pangkatan 14,200 (6) 15,100 37,900
Bangka 3,400 - -
--------- --------- ------------
45,300 2 44,600 102,200
========= =========== ========= ============
Palm kernels
Kalimantan 5,200 6 4,900 11,000
Pangkatan 3,300 (13) 3,800 9,600
Bangka 700 - -
--------- --------- ------------
9,200 6 8,700 20,600
========= ========= ============
Extraction rates % % %
Crude palm oil
Kalimantan 26.0 25.6 25.1
Pangkatan 23.6 23.2 23.0
Bangka 23.7 - -
Palm kernels
Kalimantan 4.9 4.3 4.3
Pangkatan 5.5 5.8 5.8
Bangka 4.7 - -
========= ========= ============
Average selling US$ US$ US$
prices
Crude palm oil (Rotterdam
c.i.f.) 668 (1) 673 622
Palm-kernel oil 1,157 22 948 909
Costs
Cost per tonne of palm product (crude palm oil and palm kernels)
at US$445 was higher than the US$425 in the first half of 2015. The
main reason for this was a higher cost per tonne of ffb produced on
the Group's estates. This was a natural consequence of the lower
crop: there are fixed costs in a plantation such as weeding,
pruning and fertilizing that do not vary with crop. As the crop
fell during the first half of 2016, so the cost per tonne of ffb
due to these fixed costs increased. The cost per tonne of palm
product is typically lower during the second half of the year as
crop levels rise, and one significant cost, fertilizer, is often
incurred disproportionately during the first half of the year. An
important component of overall cost is the element relating to ffb.
The Group expects costs to fall as the young palms on its new
projects mature and so average bunch weight rises. This will bear
down on the Group's overall cost per tonne of palm product,
demonstrating the Group's position as an efficient low-cost
operator.
Mill-gate price
As noted above in the section 'The palm-oil market', the average
Rotterdam c.i.f. price for the period was US$668 per tonne, only a
little lower than it had been during the first half of 2015.
However, the introduction of an 'export levy' in Indonesia had the
effect of lowering the mill-gate price to producers of CPO,
irrespective of whether their sales were made into the export
market. The burden of the US$50 per tonne export levy seems to have
fallen largely on producers of CPO, with only a small residual
amount bearing on refiners of CPO. As a result, the average
mill-gate price per tonne of CPO for the period was US$543, 7%
lower than the US$582 achieved in the first half of 2015.
Planting
Good progress has been made with developing the Group's areas:
during the interim period 1,240 hectares were planted. The majority
of this was on the Group's newest project in Musi Rawas where 700
hectares were planted as the progress on development continues to
build momentum. In addition to the areas already planted, 1,800
hectares have been compensated and so are available for planting,
and a further 3,300 hectares have been measured in anticipation
that compensation will be paid in due course. In Kalimantan 480
hectares were planted; as were 60 hectares in Bangka.
Planting in respect of smallholder co-operatives continued,
amounting to a further 740 hectares: 280 in Bangka; 120 in
Kalimantan; 340 in Musi Rawas. Altogether, therefore, the Group
planted 1,980 hectares in the first half of 2016 for itself and its
smallholders.
Development of the Group's projects in Kalimantan and Bangka is
nearing a conclusion. The Group expects the total final planted
area to reach 10,600 hectares in Kalimantan with an additional
4,400 hectares for the smallholder co-operatives. In Bangka, the
total of planted land is expected to reach 6,000 hectares with a
further 4,000 for the smallholder co-operatives. It is too early to
say with any degree of confidence how much of the 20,000-hectare
concession in Musi Rawas will eventually be planted, but the
board's current estimate of the plantable land is 7,000 hectares
for the Group and 3,000 hectares for the smallholder
co-operatives.
New land
The Group is exploring the acquisition of additional hectarage
close to its new projects to bring them to an optimal size. The
Group's experience is that 10,000 hectares of oil palm with a
60-tonne mill provides a unit which is both big enough to provide
economies of scale in production and administration and small
enough to allow the careful scrutiny by field management needed to
maintain high standards. The Group's projects in Bangka and Musi
Rawas, including smallholder areas, are of this size and the board
is actively engaged in extending the Kalimantan project from the
currently-projected 15,000 hectares to bring it to the equivalent
of two 10,000 hectare units. The board's longer-term intention is
to commence a new substantive project, of a suitable economic size,
once the development of Musi Rawas is approaching an end.
Preliminary work to identify suitable possibilities will begin once
there is better visibility of the point at which planting on Musi
Rawas will be concluded.
Gross profit
As a result of all of the above, the gross profit for the first
half of 2016 was US$5.1 million, 42% lower than the US$8.9 million
recorded for the same period in 2015.
Foreign-exchange difference
The Group principally incurs foreign-exchange differences on
monetary Rupiah assets and liabilities held in Indonesia. During
the period under review the Indonesian Rupiah appreciated by 5%
against the US Dollar generating an unrealised exchange gain of
US$1.3 million (2015 loss of US$4.0 million) on cash balances,
recoverable tax and loans made to the co-operative schemes attached
to the Group's new projects. In Indonesia, US Dollar borrowing by
the new projects generated a taxable gain and so inflates the
Group's tax charge in the same way that it pushed down the Group's
tax charge in 2015.
Other administrative expenses
Other administrative expenses increased by US$1.0 million
between the first half of 2016 and that in 2015. This increase is
almost entirely due to the write-back in 2015 of a provision in
respect of irrecoverable tax that was not repeated in 2016. Other
administrative expenses excluding non-recurring items increased by
6% between the two periods due mainly to an increase in
professional fees for tax advisory work.
Associated companies
Indonesia
The Group's share of profit of its Agro Muko joint venture and
associated-company PT Kerasaan Indonesia ("Kerasaan") was US$3.1
million, very similar to its share of profit in the first six
months of 2015 (see note 3). Their location meant these estates
were not affected by the pattern of severe weather that negatively
affected output in the Group's new projects.
In Kerasaan, a similar level of profit reflects the crop
remaining at its 2015 level of 18,700 tonnes, very slightly ahead
of expectation. For Agro Muko, a 3% increase in its own crop was
slightly behind expectation but was supplemented by a doubling of
crop bought in from outgrowers to 9,600 tonnes, although this
advantage was eroded by a fall in the extraction rate to 22.0%. The
local management team is engaged in a set of initiatives to improve
the rate of extraction, initially by driving up field standards. As
previously reported, an accelerated replanting programme is in
place which will hold back an increase in crop until after the
middle of the next decade. A small loss was made on rubber
production.
Crops and production are as set out in the table below: -
6 months 6 months Year
ended ended ended
30 June 30 June 31 December
2016 Increase 2015 2015
Tonnes % Tonnes Tonnes
Ffb crops
PT Agro Muko
* own 158,300 3 153,700 340,500
* outgrowers 9,600 104 4,700 12,700
--------- --------- ------------
167,900 6 158,400 353,200
PT Kerasaan Indonesia 18,700 - 18,700 41,600
--------- --------- ------------
186,600 5 177,100 394,800
========= ========= ========= ============
Production (PT Agro
Muko)
* Crude palm oil 36,900 3 35,700 80,300
* Palm kernels 8,600 2 8,400 18,800
========= ========= ========= ============
Extraction rates % % %
* Crude palm oil 22.0 22.5 22.7
* Palm kernels 5.2 5.3 5.3
========= ========= ============
Tonnes Tonnes Tonnes
Rubber crops
PT Agro Muko 1,031 11 928 1,650
Australia
The profit for the half year includes US$11.7 million
attributable to NAPCo. After a significant period of negotiation,
the Group entered into a contract on 6 May 2016 to sell its
investment in NAPCo alongside the majority Foster family
shareholder for A$107 million. The sale was expected to be
concluded before the end of July, allowing time for various routine
statutory conditions to be fulfilled. By the end of June, these
conditions had been substantially met and, therefore, the profit
from the disposal has been recognised in this interim report. The
sale was duly completed on 20 July 2016.
The profit of US$11.7 million in respect of NAPCo comprises both
the Group's share of NAPCo's profit for the period and the book
gain on disposal of the investment (see note 8). The Group's share
of NAPCo's profit in the period was due to healthy weight gain in
NAPCo's herd, leading to an upward revaluation of the herd despite
a 2.4% fall in numbers by 4,329 to 173,649. The average value per
head increased by some 11%.
Malaysia
The Group's share of Bertam Properties Sdn. Berhad ("Bertam
Properties") profit was US$1.6 million compared with a loss for the
equivalent period in 2015 of US$0.1 million. This disparity arises
from the timing of property sales, which are recognised only once
they are finally completed. During the first half of 2015, no
property sales were recognised, although a number were in process
at 30 June; 370 sales of developed properties were subsequently
recognised during the second half of 2015. In the first half of
2016, sales of 217 developed properties were recognised as well as
the sale of two hectares of prime land to the Tesco supermarket
group. A number of sales of developed property are in progress.
CURRENT TRADING AND PROSPECTS
Since 30 June, palm-oil prices have risen to their current level
of more than US$750 per tonne against a background of low world
vegetable-oil stock levels. In respect of CPO, low stock levels
seem to be due to reduced production, notably in Indonesia, a
consequence of the extended dry period resulting from the
widely-reported El Niño that has affected South East Asia. Within
Indonesia, there are signs that the government's mandate to
introduce a 10% biodiesel blend in the transport sector (and 7% in
the industrial sector) is having a positive effect on the domestic
demand for palm oil as well as drawing in more imports of biodiesel
from abroad.
The extended dry period that affected the Group's results in the
interim period has come to an end. Oil palms will often produce
above-average crops after a period in which their environment has
not supported normal formation of ffb. However, the beneficial
effects of renewed rainfall can take up to six months to produce a
resurgence in crop and up to 24 months fully to overcome the
effects of drought. Notwithstanding the dry weather, the
second-half crop is likely, as would normally be expected, to be
higher than in the first half.
Good planting momentum provides the basis for future crop growth
and hence rising revenue. The board remains confident that the
fundamentals of the palm-oil market continue to be encouraging.
Vegetable oil is a basic foodstuff and increasing demand from a
growing world population looks likely to persist. Palm oil delivers
by far the highest yield per hectare of all the vegetable oils and
has the lowest cost of production. It is therefore well placed,
long term, to benefit from the likely future increase in
demand.
UNAUDITED CONSOLIDATED INCOME STATEMENT
For the six months ended 30 June 2016
6 months Year ended
6 months ended 31
ended 30 June 2015 December
Note 30 June Restated* 2015
2016 US$'000 Restated*
US$'000 US$'000
Continuing operations
Revenue 3 30,354 38,029 72,528
Cost of sales (25,233) (29,160) (57,469)
Gross profit 3 5,121 8,869 15,059
Gain/(loss) on
biological assets 310 126 (232)
Foreign-exchange
gain /(loss) 1,338 (3,997) (5,320)
Other administrative
expenses (1,805) (820) (2,768)
Other income 104 309 380
Operating profit 5,068 4,487 7,119
Finance income 349 505 894
Finance costs (664) (594) (1,244)
Group-controlled
profit before taxation 4,753 4,398 6,769
Tax on profit on
ordinary activities (3,172) (812) (2,401)
Group-controlled
profit after tax 1,581 3,586 4,368
Share of associated
companies' profit
after tax 3 4,731 3,004 8,554
Profit for the period
on continuing operations 6,312 6,590 12,922
Profit for the period
from discontinued
operations 8 11,694 8,828 12,473
Profit for the period 18,006 15,418 25,395
Attributable to:
Owners of M.P. Evans
PLC 16,702 14,759 24,084
Non-controlling
interests 1,304 659 1,311
18,006 15,418 25,395
Continuing operations US Cents US Cents US Cents
Basic earnings per
10p share 9.0 10.7 20.9
Diluted earnings
per 10p share 9.0 10.7 20.9
Continuing and discontinued
operations
Basic earnings per
10p share 30.0 26.7 43.4
Diluted earnings
per 10p share 30.0 26.6 43.4
* See notes 5 and 8.
UNAUDITED CONSOLIDATED BALANCE SHEET
As at 30 June 2016
30 June 2015 31 December
30 June Restated* 2015
Note 2016 US$'000 US$'000
US$'000
Non-current assets
Goodwill 1,157 1,157 1,157
Property, plant and
equipment 196,571 197,014 185,902
Investment in associates 48,136 96,419 97,586
Investments 83 89 78
Deferred-tax asset 15,983 15,924 17,076
261,930 310,603 301,799
Current assets
Biological assets 1,203 8,085 893
Inventories 11,452 6,670 8,000
Trade and other receivables 99,505 15,689 18,316
Current-tax asset 4,814 2,544 3,155
Cash and cash equivalents** 34,341 38,878 44,214
151,315 71,866 74,578
Total assets 413,245 382,469 376,377
Current liabilities
Borrowings 14,820 31,072 13,453
Trade and other payables 30,833 14,934 15,209
Current-tax liabilities 727 1,443 2,206
46,380 47,449 30,868
Net current assets 104,935 24,417 43,710
Non-current liabilities
Borrowings 26,160 11,765 19,222
Deferred-tax liability 616 139 429
Retirement-benefit
obligations 5,098 3,958 4,233
31,874 15,862 23,884
Total liabilities 78,254 63,311 54,752
Net assets 334,991 319,158 321,625
Equity
Share capital 6 9,366 9,349 9,360
Other reserves 60,220 73,550 76,226
Profit and loss account 243,654 215,316 214,423
Equity attributable
to owners of M.P.
Evans Group PLC 313,240 298,215 300,009
Non-controlling interests 21,751 20,943 21,616
Total equity 334,991 319,158 321,625
* See notes 5 and 8
** Of this balance, US$17.2 million has been pledged as security
against bank loans
UNAUDITED CONSOLIDATED CASH-FLOW STATEMENT
For the six months ended 30 June 2016
6 months Year ended
ended 6 months ended 31 December
30 June 30 June 2015 2015
Note 2016 US$'000 US$'000
US$'000
Net cash generated
by operating activities 7 3,815 7,876 20,231
Investing activities
Purchase of property,
plant and equipment (15,990) (11,977) (28,419)
Interest received 349 505 894
Proceeds on disposal
of property, plant
and equipment 104 319 21,127
Net cash used by
investing activities (15,537) (11,153) (6,398)
Financing activities
Loan drawdowns 10,644 - 18,571
Repayment of borrowings (2,339) (3,932) (30,449)
Dividends paid to
Company shareholders (4,622) (3,665) (5,208)
Dividends paid to (1,169) - -
non-controlling interest
Net cash used by
financing activities 2,514 (7,597) (17,086)
Net decrease in cash
and cash equivalents (9,208) (10,874) (3,253)
Net cash and cash
equivalents 1 January 44,214 48,042 48,042
Effect of foreign
exchange rates on
cash and cash equivalents (665) 1,710 (575)
Net cash and cash
equivalents at period
end 34,341 38,878 44,214
NOTES TO THE INTERIM STATEMENTS
For the six months ended 30 June 2016
1. Statutory information
The financial information for the six-month periods ended 30
June 2016 and 2015 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 2015 is abridged from
the statutory accounts. The 31 December 2015 statutory accounts
have been reported on by the Group's auditors,
PricewaterhouseCoopers 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.
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) as adopted by the EU, 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 2015.
3. Segment information
The Group's reportable segments previously followed three areas
of activity. These were distinguished by location and product:
plantation crops (predominantly palm oil) in Indonesia, cattle in
Australia, and property development in Malaysia. Following the
disposal of the Group's interest in NAPCo, and its treatment as a
discontinued operation, the Group now has two remaining reportable
segments.
Plantation Property
Indonesia Malaysia Other Total
US$'000 US$'000 US$'000 US$'000
6 months ended
30 June 2016
Revenue 30,281 - 73 30,354
Gross profit/(loss) 5,131 - (10) 5,121
Share of associated
companies' profit
after tax
Agro Muko 2,749 - - 2,749
Kerasaan 376 - - 376
Bertam Properties - 1,606 - 1,606
----------- ---------- -------- --------
3,125 1,606 - 4,731
6 months ended
30 June 2015
Revenue 37,937 - 92 38,029
Gross profit 8,868 - 1 8,869
Share of associated
companies' profit/(loss)
after tax
Agro Muko 2,724 - - 2,724
Kerasaan 348 - - 348
Bertam Properties - (68) - (68)
----------- ---------- -------- --------
3,072 (68) - 3,004
Year ended 31
December 2015
Revenue 72,381 - 147 72,528
Gross profit/(loss) 15,084 - (25) 15,059
Share of associated
companies' profit
Agro Muko 5,105 - - 5,105
Kerasaan 699 - - 699
Bertam Properties - 2,750 - 2,750
----------- ---------- -------- --------
5,804 2,750 - 8,554
4. Dividends:-
6 months 6 months Year ended
ended ended 31 December
30 June 30 June 2015
2016 2015
US$'000 US$'000 US$'000
2014 final dividend 6.50
p per 10p share - 5,646 5,646
2015 interim dividend
2.25 p per 10p share - - 1,928
2015 final dividend 6.50 4,852 - -
p per 10p share
--------- --------- ------------
4,852 5,646 7,574
Subsequent to 30 June 2016, on 20 July 2016 the board declared a
special dividend of 5p per 10p share. The dividend was paid on 17
August 2016 to those shareholders who were on the register at the
close of business on 5 August 2016.
In addition, subsequent to 30 June 2016, the board has declared
an interim dividend of 2.25p per 10p share. The dividend will be
paid on or after 4 November 2016 to those shareholders on the
register at the close of business on 21 October 2016.
No scrip dividend was offered in relation to the special
dividend, and no scrip dividend is being offered in relation to the
interim dividend. The board has resolved to stop offering a scrip
dividend alternative to a cash dividend payment.
5. Biological assets
As disclosed in the 2015 interim report, the Group adopted the
amendments to IAS 41 issued by the IASB on 30 June 2014, and
accounted for the Group's bearer biological assets under IAS 16
within those results. At that time, the Group did not recognise an
asset in relation to unharvested ffb growing in its plantations. In
the accounts for the year ended 31 December 2015, taking into
account advice from the Group's auditor on the interpretation of
IAS 41, the Group introduced a policy of including an estimate of
the value of ffb prior to harvest as a biological asset in the
Group's balance sheet for the purposes of statutory reporting.
As a result of this, the results for the six months ended 30
June 2015 have been restated, increasing net assets by US$1.3
million, and increasing the profit for the period by US$0.1
million.
6. Share capital
30 June 30 June 31 December 30 June 30 June 31 December
2016 2015 2015 2016 2015 2015
Number Number Number US$'000 US$'000 US$'000
Shares
of 10p
each
At 1 January 55,700,444 55,327,395 55,327,395 9,360 9,302 9,302
Issued 39,275 304,355 373,049 6 47 58
At period
end 55,739,719 55,631,750 55,700,444 9,366 9,349 9,360
39,275 shares were issued in lieu of the 2015 final dividend
paid on 21 June 2016 (2015 - 304,355 shares issued in lieu of the
2014 final dividend; 68,694 shares were issued in lieu of the 2015
interim dividend).
7. Analysis of movements in cash flow
Year ended
6 months 6 months 31 December
ended ended 2015
30 June
2015
30 June (Restated) (Restated)
2016
US$'000 US$'000 US$'000
Profit for the period 18,006 15,418 25,395
Discontinued operations (11,694) (8,828) (12,473)
Share of associated companies'
profit after tax (4,731) (3,004) (8,554)
Tax charge 3,172 812 2,401
Finance costs 664 594 1,244
Finance income (349) (505) (894)
Operating profit 5,068 4,487 7,119
Biological gain (310) (2,166) (4,346)
Disposal of property, plant
and equipment (55) (195) 438
Release of deferred profit (95) (95) (263)
Depreciation of property,
plant and equipment 5,287 4,929 9,869
Retirement-benefit obligations 656 458 871
Share-based payments 14 60 78
Discontinued operations - 1,230 1,496
Dividends from associated
companies 3,007 4,335 7,637
Operating cash flows before
movements in working capital 13,572 13,043 22,899
(Increase)/decrease in
inventories (3,452) (430) 7,399
Increase in receivables (1,468) (2,562) (5,228)
Increase in payables 856 2,393 2,676
Cash generated by operating
activities 9,508 12,444 27,746
Income tax paid (5,029) (3,974) (6,271)
Interest paid (664) (594) (1,244)
Net cash generated by operating
activities 3,815 7,876 20,231
8. Discontinued operations
On 6 May 2016, the Group entered into a contract for the
disposal of its 34.37% interest in NAPCo. The disposal was subject
to a number of conditions, all of which were substantially
satisfied at 30 June 2016. Disposal proceeds, which were received
in cash on 21 July 2016, were US$79.7 million, and after a tax
charge of US$13.8 million the Group realised a net profit on
disposal of US$7.4 million. This, in addition to the US$4.3 million
Group share of NAPCo's profit for the period up to disposal,
resulted in a total profit of US$11.7 million from the NAPCo
discontinued operation in the six months ended 30 June 2016.
Furthermore, as disclosed in the statutory accounts for the year
ended 31 December 2015, the Group completed the sale of its
wholly-owned 'Woodlands' cattle property in Australia in that year
and reported its results as a discontinued operation. For
consistency, the results and associated cash flows for the six
months ended 30 June 2015 have also been reclassified as
discontinued operations in this report.
Year ended
6 months 31 December
6 months ended 2015
ended 30 June
2015
30 June 2016 (Restated) (Restated)
US$'000 US$'000 US$'000
Group share of NAPCo
profit pre disposal 4,312 7,598 10,977
Profit on disposal 7,382 - -
of NAPCo
11,694 7,598 10,977
Profit from discontinued
Woodlands operation - 1,230 1,496
------------- ----------- -------------
11,694 8,828 12,473
9. Exchange rates
30 June 30 June 31 December
2016 2015 2015
US$1 = Indonesian Rupiah * average 13,434 12,962 13,390
* period end 13,180 13,332 13,795
US$1 = Australian Dollar * average 1.37 1.28 1.33
* period end 1.34 1.30 1.37
US$1 = Malaysian Ringgit * average 4.10 3.64 3.91
* period end 4.03 3.77 4.29
GBP1 = US Dollar * average 1.44 1.52 1.53
* period end 1.34 1.57 1.47
By order of the boad
Mrs Claire Hayes
Secretary
This information is provided by RNS
The company news service from the London Stock Exchange
END
IR SSMFIUFMSELU
(END) Dow Jones Newswires
September 12, 2016 02:00 ET (06:00 GMT)
M.p. Evans (LSE:MPE)
Historical Stock Chart
From Mar 2024 to Apr 2024
M.p. Evans (LSE:MPE)
Historical Stock Chart
From Apr 2023 to Apr 2024