25th Aug 2016 16:19
LONDON (Alliance News) - Anglo-Eastern Plantations PLC Thursday reported a fall in pretax profit for its first half, as it saw lower production of fresh fruit bunches.
For the six months to the end of June the palm oil and rubber producer reported a pretax profit of USD19.5 million, down from USD21.8 million, on revenue of USD86.0 million, down from USD104.0 million.
Anglo-Eastern said production of fresh fruit bunches fell 3%, and bought-in crops decreased 22%, which it attributed to dry weather and intense competition, particularly at its mill in Riau.
Whilst the crude palm oil price ex-Rotterdam averaged USD668 per metric tonne, higher than the USD663 per metric tonne seen in the first half of 2015, the net receivable by the company was lower due to an export tax levy of USD50 per metric tonne imposed by the Indonesian government.
Anglo-Eastern noted that the recovery of price since the beginning of the year was due to a decline in crude palm oil production brought on by the drought last year.
"The upside of CPO price is limited as the industry heads into its peak production cycle in the third quarter of 2016. But as the El Nino weather phenomenon dissipated, weather forecasters globally are predicting a 50-75% chance of La Nina developing in the second half of 2016," the company said.
"The emergence of La Nina and resultant rains in the region could help improve FFB yields. At the same time it will bring extreme dryness to the eastern side of the Pacific affecting regions generally known for growing soy bean. If La Nina develops, it could potentially see CPO price strengthen in the fourth quarter of 2016 especially in the wake of a wider discount to soybean oil," Anglo-Eastern added.
Shares in Anglo-Eastern closed up 1.4% at 448.00 pence Thursday.
By Hana Stewart-Smith; [email protected]; @HanaSSAllNews
Copyright 2016 Alliance News Limited. All Rights Reserved.
Related Shares:
Anglo-Eastern Plantations