26th May 2015 09:27
LONDON (Alliance News) - Anglo-Eastern Plantations PLC Tuesday said production of fresh fruit bunches and crude palm oil fell in the first quarter of 2015, along with crude palm oil prices, and said new plantings remain behind schedule due to delays in reaching a settlement with local villagers about land compensation.
In the three months ended March 31, the palm oil producer in Indonesia and Malaysia said production of its own fresh fruit bunches fell 5% year on year to 172,200 metric tonnes from 190,630 metric tonnes whilst the amount of fresh fruit bunches bought in from farmers also fell 5% to 127,900 metric tonnes from 135,300 metric tonnes.
Total crude palm oil production, which comes from the fresh fruit bunches, fell 9% year on year as a result to 58,200 metric tonnes from 64,000 metric tonnes a year earlier.
Alongside lower production in the quarter, crude palm oil prices fell 26% from a year ago to USD669 per metric tonne from USD904 per metric tonne. However, Anglo-Eastern said the price was in its expected range of USD600 to USD800 per metric tonne in the first half of 2015.
In mid-May, the company said the crude palm oil price closed at USD655 per metric tonne, which represents a 7% fall since the start of 2015. The company said it believes prices will rise but said any effect would not likely be felt until 2016.
"In the near term, the upside on crude palm oil price may be limited in view of seasonally higher production and high stockpiles. The board remains cautious but expects profitability and cash flow to remain in line with management forecasts for 2015," it said in a statement.
The planting of new sites in the quarter was also down year-on-year to 356 hectares from 427 hectares as new plantings remain behind schedule due to delays in finalising settlement of land compensation with villagers in Bengkulu, Bangka and Kalimantan, as it announced in April.
"The villagers seek compensation beyond what the group considered fair and reasonable resulting in protracted negotiations," said the company Tuesday.
Despite the delays, the construction of the mill in Central Kalimantan is "progressing on schedule" and is expected to be operational before the end of the second quarter of 2015, with an initial capacity of 45 metric tonnes per hour.
The company said its balance sheet "remains strong" and it continues to generate positive cashflow, with the company's long term development loans falling slightly to USD34.9 million at the end of March from GBP35.0 million a year earlier after the company repaid a small portion of its outstanding debt.
Anglo-Eastern shares were trading flat on Tuesday morning at 660.0 pence per share.
By Joshua Warner; [email protected]; @JoshAlliance
Copyright 2015 Alliance News Limited. All Rights Reserved.
Related Shares:
Anglo-Eastern Plantations