8th Apr 2014 11:45
LONDON (Alliance News) - Anglo-Eastern Plantations PLC Tuesday said its pretax profit almost doubled in 2013 as a result of the revaluation of its biological assets but its revenues fell on lower crude oil prices.
The palm oil and rubber plantation owner said its pretax profit increased 87% to USD153.4 million from USD81.9 million the previous year including a USD93.7 million higher biological asset adjustment due to an increase in the 10-year average palm oil price and a reduction in discount rates applied.
Anglo-Eastern said its 10-year average crude palm oil price increased to USD700 per tonne from USD675 per tonne and its discount rate fell to 15.8% from 17.5%, increasing the valuation of its oil palm trees and nurseries.
The company said that its pretax profit excluding adjustments would have fallen 33% to USD59.7 million from USD88.6 million as revenues fell 15% to USD201.9 million from USD237.4 million.
Anglo-Eastern said its revenues fell as the price of crude palm oil declined to a three-year low in January 2013 and experienced further volatility throughout the year. The company achieved an average palm oil price of USD857 per tonne during the period, 14% down on its 2012 average of USD995 per tonne.
The company said the price of crude palm oil increased towards the end of the year and it continues to expect that rising income levels and population growth in China, India and Indonesia should drive the consumption of palm oil.
The firm also said its production for 2013 was 787,500 tonnes, 1% higher than the comparable 783,500 tonnes, with continued low yield due to the affects of dry weather in 2011 affecting trees over 15 years and monsoon rains which hit production in the early part of 2013.
Despite the fall in revenues, Anglo-Eastern recommended a final dividend of 3.0 pence per share, a slight increase on its 2.9 pence final dividend for 2012.
The company said that rising material costs and wages in Indonesia are expected to increase the overall production cost in 2014, eroding profit margins. However, the company said it expects a satisfactory profit level and cash flow for 2014.
Anglo-Eastern shares were down 2.7% to 681.00 pence Tuesday.
By Tom McIvor; [email protected]; @TomMcIvor1
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