28th Sep 2005 07:03
Anglo-Eastern Plantations PLC28 September 2005 Wednesday 28 September 2005 ANGLO-EASTERN PLANTATIONS PLC - INTERIM ANNOUNCEMENT Anglo-Eastern Plantations, which operates approximately 31,000 hectares ofdeveloped plantations, primarily oil palm in Indonesia, announces a substantialreduction in pre-tax profit in the half year to 30 June 2005, as was predictedin the AGM statement of 28 June 2005. The outlook for the second half of 2005 isfavourable. 2005 2004 Change Revenue ($'000) 24,272 33,296 -27.1%Operating profit ($'000) 7,763 12,622 -38.5%Pre-tax profit ($'000) 7,640 12,528 -39.0%Basic earnings per share (cts) 10.7 18.2 -41.2% • Net cash of $0.8 million compared with net debt of $1.0 million a year earlier. Capital expenditure will continue at a high level but the net cash position is expected to improve in the second half of 2005. • The lower turnover and profit is due almost entirely to the lower crude palm oil (CPO) prices. The average for the half year of $417/mt compared with $502/mt for the first half of 2004 and $460/mt for 2004 as a whole. • Production of fresh fruit bunches (FFB) amounted to 195,917mt, an increase of about 6% over the same period last year. Total FFB bought in or processed for third parties at the group's three mills increased by 19%, to 143,807mt. Growth in production of CPO was 24%, reaching 67,327mt. • Following the acquisition of 5,150 hectares at Labuhan Bilik in North Sumatra in December 2004, the group continues to look for further opportunities in Indonesia. Chan Teik Huat, Chairman and Chief Executive, stated "Crop output at theIndonesian estates, particularly Tasik, has shown improvement in recent weeks.In the absence of any adverse circumstances, the group's FFB and CPO output for2005 (which is normally biased towards the second half of the year) will setanother record. If CPO prices stay at the same average price witnessed in thefirst half, the second half results are expected to show material improvementover the first half. While it is unlikely that the record turnover and profit of2004 can be exceeded, and while recent increases in fuel prices will have anadverse effect on operating costs, nevertheless I expect the group to achieve asatisfactory result for the year." Enquiries: Anglo-Eastern Plantations Plc 020-7236 2838Rollo Barnes (Financial Director) Bankside Consultants LimitedCharles Ponsonby 020-7367 8851 / 07789-202 312 INTERIM STATEMENT After three years of rising profits I have to report a lower result for thefirst half of 2005, due mainly to lower crude palm oil (CPO) prices, asindicated at the Annual General Meeting in June 2005. The outlook for the secondhalf of 2005 is significantly better. In spite of group FFB production and bought in crop 6% and 19% ahead of the sameperiod in 2004, group turnover for the six months declined by 27% to $24.3million. Profit before tax fell 39% to $7.6 million. As well as the effect oflower CPO prices, a larger loss was also incurred at Bina Pitri estate, in theprovince of Riau, where rehabilitation effort expended there is not likely toshow results until 2006 With a higher tax charge incurred on dividends declared from our Indonesiansubsidiaries, the group's earnings per share for the six months were 10.7 ctscompared to 18.2 cts for the same period in 2004. The above profits and earnings figures are calculated after applyingInternational Financial Reporting Standards (IFRS) which became mandatory forall UK listed companies for accounting periods commencing on or after 1 January2005. The effect of these standards and the restatement of prior period results,is dealt with later on in this report. Group cash at 30 June 2005 was $9.3 million against bank loans outstanding of$8.6 million. During the first six months, capital expenditure amounted to $4.1million and loan repayments were $2.6 million. There are further loan repaymentsof $2.4 million to be made by October 2005, after which the original $8.0million bank loan raised to fund the Bengkulu project will be completely repaid.Capital expenditure will continue at a high level but the net cash position isexpected to improve in the second half of 2005. Production and Sales 2005 2004 2004 6 months 6 months year to to 30 June to 30 June 31 Dec (unaudited) (unaudited) (audited) mt mt mt Oil palm production 195,917 184,260 428,657FFB- all estates- bought in or processed for thirdparties 143,807 120,763 241,359Saleable crude palm oil (CPO) 67,327 54,258 118,197Saleable palm kernel 16,014 13,025 28,526Oil palm salesCPO 66,908 55,953 119,250Kernel 16,070 12,545 28,315FFB sold outside 24,567 43,406 107,844Other crops productionRubber 396 729 1,370Cocoa 73 80 208 All FFB production at the North Sumatra estates, with the exception of Tasik,increased from last year. FFB production at Tasik was down 17%. This may be areaction to the high yields in the previous two years. FFB production atBengkulu was 19% ahead of the same period last year. FFB production at theCenderung estates in Malaysia recorded a 20% increase over the same period lastyear. The group's total bought in crop was 23,044 mt higher than the first half of2004. Again, the growth was not evenly spread between our three mills - the newBlankahan mill began purchasing outside crop for the first time in February 2005and the Bengkulu mill enjoyed the benefit of the increase in mill capacity from40 mt/hour to 60 mt/hour in October 2004. Bought in crop at our Tasik mill fell30% compared to the first half of 2004 in the face of stiff local competition. Produce Prices The CPO price fluctuated in a fairly narrow range between $395/mt and $440/mtduring the first half of 2005, averaging $417/mt. This compared less favourablyto the average price of $502/mt for the first half of 2004 and of $460/mt for2004 as a whole. The average for the three months to September 2005 has been$412/mt and the spot price has recently improved to $430/mt. The rubber price, which was already high, strengthened steadily throughout thefirst half of the year, from $1,183/mt to $1,554/mt. Cocoa prices were also veryfavourable. Development The group's planted areas at 30 June 2005 were as follows: Mature Immature Total Ha ha HaNorth Sumatra 9,914 418 10,332Bengkulu 9,739 3,094 12,833Riau 3,992 57 4,049 --------- -------- -------Indonesia 23,645 3,569 27,214Malaysia 3,478 285 3,763 --------- -------- -------Total: 30 June 2005 27,123 3,854 30,977 --------- -------- -------Total: 31 December 2004 26,263 4,510 30,773 --------- -------- -------Total: 30 June 2004 25,857 3,797 29,654 --------- -------- ------- New planting at Bengkulu amounted only to only 306 hectares. The progress wasslowed by protracted negotiations with local villagers for compensation. Therate of planting has improved in recent weeks and it remains our aim to completethe remaining 1,700 hectares in Bengkulu by the end of 2006. From our initial application for 2,000 ha, we have obtained a formal right ofuse over a further 760 hectares of land in Bina Pitri. This area has beenprepared ready for planting over the second half of 2005 and will bring BinaPitri to a total area of almost 5,000 ha. It is unlikely we shall be granted anyfurther rights in the neighbourhood of Bina Pitri in the near future. Site preparation for a 40 mt/hr mill expandable to 60 mt/hr at Bina Pitri hascommenced. Completion is expected in mid 2007. An oil palm seedling nursery has been established at Labuhan Bilik, the area inNorth Sumatra acquired in December 2004. Following a survey, this area is nowestimated at 5,150 ha. We continue to look for further opportunities in Indonesia. International Accounting Standards As mentioned above, the financial statements for the six months to 30 June 2005have been prepared under IFRS and the comparative figures for 2004, which wereoriginally prepared under UK general accounting principles (UKGAAP), have beenre-stated accordingly. In summary, the results on the two bases are: 2005 2004 2004 6 months to 30 6 months to 30 Year to June June 31 Dec $'000 $'000 $'000 Profit before tax - UKGAAP 7,174 12,031 24,808 - IFRS 7,640 12,528 27,098 EPS - basic - UKGAAP 5.3p 9.6p 18.8p - IFRS 5.7p 10.0p 20.6p 30 Jun 30 Jun 31 Dec 2004 2005 2004Net asset value per share - UKGAAP 152p 134p 135p - IFRS 134p 116p 120p Reconciliation between the results based on UKGAAP and IFRS are set out in Note6 to the interim financial statements. There are five adjustments of which themost significant are: - a credit to profit and loss account for changes in value of biological assets- provision for deferred tax on the difference between the valuation of fixed assets in the group balance sheet and the value of those assets for local taxation purposes Outlook Crop output at the Indonesian estates, particularly Tasik, has shown improvementin recent weeks. In the absence of any adverse circumstances, the group's FFBand CPO output for 2005 (which is normally biased towards the second half of theyear) will set another record. If CPO prices stay at the same average pricewitnessed in the first half, the second half results are expected to showmaterial improvement over the first half. While it is unlikely that the recordturnover and profit of the 2004 can be exceeded, and while recent increases infuel prices will have an adverse effect on operating costs, nevertheless Iexpect the group to achieve a satisfactory result for the year. Chan Teik HuatChairman and Chief Executive 28 September 2005 CONSOLIDATED INCOME STATEMENT US DOLLARS STERLING 2005 2004 2004 2005 2004 2004 6 months 6 months year to 6 months 6 months year to to 30 June to 30 June 31 Dec to 30 June to 30 June 31 Dec (unaudited) restated restated (unaudited) restated restated (unaudited) (unaudited) (unaudited) (audited) Note $'000 $'000 $'000 £'000 £'000 £'000Revenue 24,272 33,296 65,618 12,980 18,294 35,662Cost of sales (15,266) (19,760) (38,499) (8,164) (10,857) (20,923) -------- -------- -------- --------- --------- --------Gross profit 9,006 13,536 27,119 4,816 7,437 14,739Biologicalassetrevaluationmovement 3 473 504 2,304 253 277 1,252Administrationand otherexpenses (1,595) (1,433) (2,185) (853) (787) (1,188)Exchangeprofits/(losses) 2 (121) 15 147 (65) 8 80 -------- -------- -------- --------- --------- --------Operatingprofit 7,763 12,622 27,385 4,151 6,935 14,883Interest - receivable 149 108 251 80 59 136 - payable (332) (243) (612) (178) (134) (332) - capitalised 60 41 74 32 23 40 -------- -------- -------- --------- --------- --------Profit beforetaxation 7,640 12,528 27,098 4,085 6,883 14,727 Foreigncorporationtax (2,559) (3,040) (7,003) (1,368) (1,670) (3,806)Foreignwithholdingtax (519) (171) (866) (278) (94) (471)Deferred taxadjustment 194 (787) (1,271) 103 (432) (691) -------- -------- -------- --------- --------- --------Profit for theyear 4,756 8,530 17,958 2,542 4,687 9,759Minorityinterests (allequityinterests) (538) (1,334) (2,941) (288) (733) (1,598) -------- -------- -------- --------- --------- -------- 4,218 7,196 15,017 2,254 3,954 8,161 ======== ======== ======== ========= ========= ========Earnings pershare 10.7cts 18.2cts 37.9cts 5.7p 10.0p 20.6p- basic- diluted 10.6cts 18.1cts 37.8cts 5.6p 9.9p 20.5p CONSOLIDATED BALANCE SHEET US DOLLARS STERLING Notes 2005 2004 2004 2005 2004 2004 30 June 30 June 31 Dec 30 June 30 June 31 Dec (unaudited) restated restated (unaudited) restated restated (unaudited) (unaudited) (unaudited) (unaudited) $'000 $'000 $'000 £'000 £'000 £'000Non currentassetsBiologicalassets 3 24,485 22,313 24,012 13,678 12,328 12,506Property,plant andequipment 106,885 94,962 103,290 59,713 52,465 53,797 -------- --------- -------- --------- --------- -------- 131,370 117,275 127,302 73,391 64,793 66,303 -------- --------- -------- --------- --------- --------CurrentassetsInventories 2,334 2,230 1,535 1,304 1,233 800Trade andotherreceivables 2,639 4,171 3,778 1,474 2,304 1,968Retirementbenefit 706 595 616 394 329 321assetsInvestments 397 355 405 222 196 211Cash and cashequivalents 9,333 6,127 14,933 5,214 3,385 7,778 -------- --------- -------- --------- --------- -------- 15,409 13,478 21,267 8,608 7,447 11,078 -------- --------- -------- --------- --------- --------CurrentliabilitiesOverdrafts (69) (20) (23) (39) (12) (12)Otherborrowings (3,778) (3,621) (5,553) (2,110) (2,000) (2,892)Trade andother (4,594) (7,089) (9,123) (2,559) (3,917) (4,753)payables -------- --------- -------- --------- --------- -------- (8,441) (10,730) (14,699) (4,708) (5,929) (7,657) -------- --------- -------- --------- --------- --------Net currentassets 6,968 2,748 6,568 3,900 1,518 3,421 -------- --------- -------- --------- --------- -------- Non-currentliabilitiesBorrowings (4,713) (3,450) (5,558) (2,633) (1,906) (2,895)Deferredtaxation (18,456) (14,507) (17,561) (10,311) (8,015) (9,147)Retirementbenefitliabilities (1,642) (1,326) (1,552) (917) (733) (808) -------- --------- -------- --------- --------- --------Net assets 113,527 100,740 109,199 63,430 55,657 56,874 ======== ========= ======== ========= ========= ========EquityCalled-upshare capital 15,481 15,319 15,424 9,984 9,895 9,952Treasuryshares (1,387) - (1,387) (722) - (722)Share premiumaccount 23,868 23,679 23,825 15,498 15,395 15,474Share capitalredemptionreserve 1,087 1,087 1,087 663 663 663Revaluationand exchangereserve (7,255) (7,739) (7,286) (6,897) (8,082) (8,876)Retainedearnings 62,937 50,898 58,719 34,404 28,120 30,583 -------- --------- -------- --------- --------- --------Shareholders'funds - allequityinterests 94,731 83,244 90,382 52,930 45,991 47,074Minorityinterests -all equityinterests 18,796 17,496 18,817 10,500 9,666 9,800 -------- --------- -------- --------- --------- --------Total capitalemployed 113,527 100,740 109,199 63,430 55,657 56,874 ======== ========= ======== ========= ========= ======== CONSOLIDATED CASH FLOW STATEMENT US DOLLARS STERLING 2005 2004 2004 2005 2004 2004 6 months 6 months year to 6months 6 months year to to 30 June to 30 June 31 Dec to 30 June to 30 June 31 Dec (unaudited) restated restated (unaudited) restated restated $'000 (unaudited) (unaudited) £'000 (unaudited) (unaudited) $'000 $'000 £'000 £'000Profit beforetax 7,640 12,528 27,098 4,085 6,883 14,727Adjustmentsfor;Interestreceivable (149) (108) (251) (80) (59) (136)Interestpayable 272 202 538 146 111 292Depreciation 1,926 1,475 2,917 1,030 810 1,585Profit on saleof fixedassets (35) (6) (17) (19) (3) (9)Movement invalue ofbiologicalassets (473) (504) (2,304) (253) (277) (1,252)Movement inmarket valueof investments 7 (41) (91) 4 (23) (49)Foreignexchange (254) (508) 163 292 (428) (476) -------- --------- -------- --------- --------- --------Operating cashflow beforechanges inworkingcapital 8,934 13,038 28,053 5,205 7,014 14,682(Increase)/decrease ininventories (798) (517) 178 (427) (284) 97Decrease/(increase) in tradeand otherreceivables 177 (1,610) 57 95 (855) 31Increase intrade andother payables 218 2,671 810 117 1,468 440 -------- --------- -------- --------- --------- --------Cash inflowfrom operatingactivities 8,531 13,582 29,098 4,990 7,343 15,250Interest (332) (243) (612) (178) (134) (334)paidOverseas taxpaid (6,587) (4,373) (6,928) (3,522) (2,403) (3,766) -------- --------- -------- --------- --------- --------Net cash flowfrom operatingactivities 1,612 8,966 21,558 1,290 4,806 11,150 -------- --------- -------- --------- --------- --------InvestingactivitiesProperty,plant andequipment- purchase (4,073) (4,475) (11,247) (2,178) (2,459) (6,111)- sale 68 7 112 36 4 61Purchase ofsubsidiary - (9,575) (4,777) - (5,261) (2,596)Interest 149 108 251 80 59 136paid -------- --------- -------- --------- --------- --------Net cash usedin investingactivities (3,856) (13,935) (15,661) (2,062) (7,657) (8,510) -------- --------- -------- --------- --------- --------FinancingactivitiesDividends paidby parentcompany - (2,375) (2,375) - (1,305) (1,291)Share optionsexercised 100 - 251 53 - 136Purchase ofown shares - (1,387) - - (754)Repayment ofexisting longterm loans (2,585) (1,011) (2,023) (1,382) (555) (1,100)Repayment ofloans in newlyacquiredsubsidiary - (4,154) - - (2,258)Drawdown ofnew long termloan - 5,000 - - 2,717Finance lease(repayment) /drawdown (35) (9) (15) (19) (5) (8)Dividends paidto minorityshareholders (2,028) (637) (699) (1,084) (350) (379)Repaymentby/(advance)to minorityshareholders 693 - (693) 371 - (377)Subscriptionsto subsidiaryshare capitalby minorityshareholders 453 - - 242 - - -------- --------- -------- --------- --------- --------Net cash usedin financingactivities (3,402) (4,032) (6,095) (1,819) (2,215) (3,314) -------- --------- -------- --------- --------- --------(Decrease) incash and cashequivalents (5,646) (9,001) (198) (2,591) (5,066) (674)Cash and cashequivalentslessoverdraftsAt beginningof period 14,910 15,108 15,108 7,766 8,439 8,439 -------- --------- -------- --------- --------- --------At end ofperiod 9,264 6,107 14,910 5,175 3,373 7,765 ======== ========= ======== ========= ========= ========Analysis ofnet cash/(debt)Cash 9,333 6,127 14,933 5,214 3,385 7,778Overdrafts (69) (20) (23) (39) (12) (13) -------- --------- -------- --------- --------- -------- 9,264 6,107 14,910 5,175 3,373 7,765Borrowings duewithin oneyear (3,761) (3,621) (5,535) (2,101) (2,000) (2,891)Borrowings dueafter one year (4,713) (3,380) (5,524) (2,633) (1,867) (2,868)Finance leases (18) (70) (52) (10) (39) (27) -------- --------- -------- --------- --------- -------- 772 (964) 3,799 431 (533) 1,979 ======== ========= ======== ========= ========= ======== STATEMENT OF CHANGES IN EQUITY FOR THE YEAR ENDED 31 DECEMBER 2004 AND FOR THE SIX MONTHS ENDED 30 JUNE 2005 (restated and unaudited) Attributable to equity holders of the parent Share Revaluation capital and Share Treasury Share redemption exchange Retained Total capital shares premium reserve reserve earnings $'000 $'000 $'000 $'000 $'000 $'000 $'000Balance at 31December 2003 15,319 - 23,679 1,087 5,375 43,702 89,162Changes inaccountingpolicy - - - - (11,419) 2,375 (9,044) ------- ------ ------- -------- -------- -------- -------Restatedbalance 15,319 - 23,679 1,087 (6,044) 46,077 80,118Changes in equityfor 2004Surplus/(deficit) onrevaluation ofestates - - - - 8,280 - 8,280Deferred taxon revaluation - - - - (3,498) - (3,498)(Loss)/profiton exchangetranslation - - - - (6,024) - (6,024) ------- ------ ------- -------- -------- -------- -------Net incomerecogniseddirectly inequity 15,319 - 23,679 1,087 (7,286) 46,077 78,876Profit forperiod - - - - - 15,017 15,017 ------- ------ ------- -------- -------- -------- -------Totalrecognisedincome andexpense forthe period 15,319 - 23,679 1,087 (7,286) 61,094 93,893Dividends paid - - - - - (2,375) (2,375)Share capitalsubscription 105 - 146 - - - 251Purchase oftreasuryshares - (1,387) - - - - (1,387)Purchase of - - - - - - -interest in asubsidiary ------- ------ ------- -------- -------- -------- -------Balance at 31December 2004 15,424 (1,387) 23,825 1,087 (7,286) 58,719 90,382Changes in equityfor six months to30 June 2005Surplus/(deficit) onrevaluation ofestates - - - - 4,491 - 4,491Deferred taxon revaluation - - - - (1,039) - (1,039)Loss)/profiton exchangetranslation - - - - (3,421) - (3,421) ------- ------ ------- -------- -------- -------- -------Net incomerecogniseddirectly inequity 15,424 (1,387) 23,825 1,087 (7,255) 58,719 90,413Profit forperiod - - - - - 4,218 4,218 ------- ------ ------- -------- -------- -------- -------Totalrecognisedincome andexpense forthe period 15,424 (1,387) 23,825 1,087 (7,255) 62,937 94,631Dividends paid - - - - - - -Share capitalsubscription 57 - 43 - - - 100 ------- ------ ------- -------- -------- -------- -------Balance at 31June 2005 15,481 (1,387) 23,868 1,087 (7,255) 62,937 94,731 ------- ------ ------- -------- -------- -------- ------- STATEMENT OF CHANGES IN EQUITY FOR THE YEAR ENDED 31 DECEMBER 2004 AND FOR THE SIX MONTHS ENDED 30 JUNE 2005 (restated and unaudited) (continued) Minority Total interests equity $'000 $'000Balance at 31 December 2003 19,229 108,391Changes in accounting policy (2,323) (11,367) -------- ---------Restated balance 16,906 97,024Changes in equity for 2004Surplus/(deficit) on revaluation ofestates 1,894 10,174Deferred tax on revaluation (680) (4,178)(Loss)/profit on exchange translation (1,491) (7,515) -------- ---------Net income recognised directly in equity 16,629 95,505Profit for period 2,694 17,711 -------- ---------Total recognised income and expense forthe period 19,323 113,216Dividends paid (1,622) (3,997)Share capital subscription - 251Purchase of treasury shares - (1,387)Purchase of interest in a subsidiary 1,116 1,116 -------- ---------Balance at 31 December 2004 18,817 109,199Changes in equity for six months to 30 June2005Surplus/(deficit) on revaluation ofestates 1,039 5,530Deferred tax on revaluation (166) (1,205)Loss)/profit on exchange translation (810) (4,231) -------- ---------Net income recognised directly in equity 18,880 109,293Profit for period 522 4,740 -------- ---------Total recognised income and expense forthe period 19,402 114,033Dividends paid (1,059) (1,059)Share capital subscription 453 553 -------- ---------Balance at 31 June 2005 18,796 113,527 -------- --------- STATEMENT OF CHANGES IN EQUITY FOR THE SIX MONTHS ENDED 30 JUNE 2004 (restated and unaudited) Attributable to equity holders of the parent Share Revaluation capital and Share Treasury Share redemption exchange Retained Total capital shares premium reserve reserve earnings $'000 $'000 $'000 $'000 $'000 $'000 $'000Balance at 31December 2003 15,319 - 23,679 1,087 5,375 43,702 89,162Changes inaccountingpolicy - - - - (11,419) 2,375 (9,044) ------- ------- ------- -------- -------- ------- ------Restatedbalance 15,319 - 23,679 1,087 (6,044) 46,077 80,118Changes in equityfor six months to30 June 2004Surplus/(deficit) on revaluation ofestates - - - - 6,087 - 6,087Deferred taxon revaluation - - - - (998) - (998)(loss)/profiton exchangetranslation - - - - (6,784) - (6,784) ------- ------- ------- -------- -------- ------- ------Net incomerecogniseddirectly inequity 15,319 - 23,679 1,087 (7,739) 46,077 78,423Profit forperiod - - - - - 7,196 7,196 ------- ------- ------- -------- -------- ------- ------Totalrecognisedincome andexpense forthe period 15,319 - 23,679 1,087 (7,739) 53,273 85,619Dividend paid - - - - - (2,375) (2,375) ------- ------- ------- -------- -------- ------- ------Balance at 30June 2004 15,319 - 23,679 1,087 (7,739) 50,898 83,244 ------- ------- ------- -------- -------- ------- ------ Minority Total interests equity $'000 $'000Balance at 31 December 2003 19,229 108,391Changes in accounting policy (2,323) (11,367) -------- ---------Restated balance 16,906 97,024Changes in equity for six months to 30 June2004Surplus/(deficit) on revaluation ofestates 1,110 7,197Deferred tax on revaluation (83) (1,081)(loss)/profit on exchange translation (1,743) (8,527) -------- ---------Net income recognised directly in equity 16,190 94,613Profit for period 1,306 8,502 -------- ---------Total recognised income and expense forthe period 17,496 103,115Dividend paid - (2,375) -------- ---------Balance at 30 June 2004 17,496 100,740 -------- --------- NOTES TO THE INTERIM STATEMENTS 1. Basis of preparation of interim financial statements and adoption ofInternational Financial Reporting Standards The financial information in this statement does not constitute full statutoryaccounts within the meaning of Section 240 of the Companies Act 1985. Fullstatutory accounts for the year ended 31 December 2004 incorporating anunqualified auditors' report have been delivered to the Registrar of Companies. The interim statements for the six months ended 30 June 2005 and 30 June 2004are unaudited. Those for the six months ended 30 June 2005 were approved by theboard on 28 September 2005. The results are prepared in accordance with thoseInternational Financial Reporting Standards (IRFS) which are expected to beendorsed by the European Union and to apply to the 2005 full year results. Thefinancial statements for the year ended 31 December 2004 and for the six monthsended 30 June 2004 were originally prepared under generally accepted UKaccounting policies (UKGAAP). The comparative figures for the year ended 31December 2004 are an extract from the financial statements for the year and,together with the financial statements for the six months ended 30 June 2004,have been restated to comply with IFRS. These adjustments, which have not beenaudited, are set out in Note 6 of this statement and comprise: a) Biological assets: IAS41 requires separate balance sheet disclosure of thevalue biological assets and requires a charge or credit to profit and lossaccount for changes in value of those biological assets. This adjustment isreferred to as" BA adjustment" in Note 6. Under UKGAAP biological assets werenot separately identified and no charge or credit was made in respect ofmovement in their value. The effect of the restatements relating to biologicalassets is stated in Note 3. b) Deferred tax: IAS 12 requires tax to be provided on the surplus of the fixedasset valuations over local tax carrying values of those assets. While inprevious periods this figure has been included only as a note in the financialstatements, its inclusion in the balance sheet at 30 June 2005 results in areduction in reported net asses of $19,125,000. At 31 December 2004 and 30 June2004 the respective reductions were $17,920,000 and $14,823,000. c) Share options: IFRS 2 requires the fair value of employee share optionsissued since November 2002 and outstanding at the relevant balance sheet date tobe expensed over the vesting period of those options. No such charge was madeunder UKGAAP. The effect of these adjustments is not significant. d) Employee retirement liabilities: The group has always provided in full forthe unfunded liabilities under its various pension and retirement benefitsschemes. Contrary to practice under UKGAAP, IAS19 requires the assets of anyseparately funded scheme to be included in the balance sheet. The assets of thedefined benefit scheme for labour in Indonesia have therefore been included inthe balance sheet. This has no effect on net asset value. e) Dividends: IAS 10, which deals with post balance sheet events, requiresdividends not declared by the year end be excluded from the results. Previously,proposed dividends not declared by the year end were included as a deductionfrom profit in the year prior to being declared at the subsequent annual generalmeeting. Where dividends have risen in consecutive years, as is the caserecently for the group, the effect of replacing a provision for a proposeddividend with actual dividends paid is to increase slightly the reported netasset value of the group. 2. Exchange profits/(losses) 2005 2004 2004 6 months 6 months year to to 30 June to 30 June 31 Dec (unaudited) (unaudited) (audited) $'000 $'000 $'000Average exchange ratesRp:$ 9,444 8,793 9,001$:£ 1.87 1.65 1.84RM:$ 3.80 3.80 3.80Closing exchange ratesRp:$ 9,713 9,415 9,290$:£ 1.79 1.79 1.92RM:£ 3.80 3.80 3.80 At 30 June 2005, there was an exchange translation deficit of $182,000 (30 June2004: (deficit) $(130,000)) arising on net third party US dollar borrowings bytwo Indonesian subsidiaries; in view of the unpredictability of the rupiah/dollar exchange rate, this was held in exchange reserves at 30 June 2005 pendingdetermination of the final profit or loss at 31 December 2005. 3. Biological assetsGroup fixed assets continued to be valued in total on the same "value in use"basis as in previous years. Within this total, the value of biological assetshas been estimated separately and, as required by IAS 41, the movement in valueof biological assets has been, credited in the periods in question, to profitand loss account. In the half years ended 30 June 2005 and 2004 the creditsbefore tax were $473,000 and $504,000 respectively. In the year to 30 December2004 the credit was considerably larger, at $2,304,000, reflecting therelatively large increase in valuation of fixed assets in 2004 as a whole. 4. DividendThe final and only dividend in respect of 2004, amounting to 8.0cts per share,or $3,147,000, was paid on 6 July 2005. (2003: 6cts per share $2,375,000 8 June2004). 5. Shares in issue US DOLLARS 2005 2004 2004 6 months 6 months year to to 30 June to 30 June 31 Dec (unaudited) (unaudited) (audited) $'000 $'000 $'000Average for purposes of calculatingEPS 39,359 39,581 39,609At period end 39,460 39,581 39,336 468,000 shares held in Treasury from December 2004 excluded from abovefigures. 6. Restatement adjustments arising from introduction of IFRS (unaudited) Figures in brackets = (credit)Reference letters refer to the description of the adjustments set out in Note 1 INCOME STATEMENT 6mths to 30 Jun 2005 ----------------------- UKGAAP Ref IFRS adjustments IFRS $'000 $'000Profit before tax and BA adjustment (7,174) c 7 (7,167)BA adjustment - a (473) (473) -------- --------- -------Profit before tax (7,174) (466) (7,640)Taxation -------- --------- -------Corporation tax 3,078 - 3,078Deferred tax (336) a 142 (194) -------- --------- ------- 2,742 142 2,884 -------- --------- -------Profit after tax (4,432) (324) (4,756)Minority interests 522 a 16 538 -------- --------- -------Distributable profit (3,910) (308) (4,218)Dividends - - - -------- --------- -------Retained (3,910) (308) (4,218) ======== ========= ======= 6. Restatement adjustments arising from introduction of IFRS (unaudited)(Continued) BALANCE SHEET 30 June 2005 ----------------------- UKGAAP Ref IFRS $'000 $'000Non current assetsBiological assets - a 24,485 24,485Property, plant and equipment 131,370 a (24,485) 106,885 -------- --------- ------- 131,370 - 131,370 -------- --------- -------Inventories 2,334 - 2,334Trade and other receivables 2,639 - 2,639Retirement benefit assets - d 706 706Investments 397 - 397Cash and cash equivalents 9,333 - 9,333 -------- --------- ------- 14,703 706 15,409 -------- --------- -------Current assetsOverdrafts (69) - (69)Other borrowings (3,778) - (3,778)Trade and other payables (8,656) c (21) (4,594) d 936 e 3,147 -------- --------- -------Current liabilities (12,503) 4,062 (8,441) -------- --------- ------- Net current assets 2,200 4,768 6,968Long term borrowings (4,713) - (4,713)Deferred tax 669 b (19,125) (18,456)Employee retirement benefit liabilities - d (1,642) (1,642) -------- --------- -------Net assets 129,526 (15,999) 113,527 ======== ========= ======= Share capital (15,481) (15,481)Treasury shares 1,387 1,387Share premium (23,868) (23,868)Capital redemption reserve (1,087) (1,087)Revaluation and exchange reserve (10,383) a 1,681 7,254 15,956Profit and loss account - b/f (54,219) a (1,367) (58,719) c 14 e (3,147)- year (3,910) (308) (4,218) -------- --------- ------- (107,561) 12,830 (94,731)Minority interest (21,965) 3,169 (18,796) -------- --------- ------- (129,526) 15,999 (113,527) ======== ========= ======= 6. Restatement adjustments arising from introduction of IFRS (unaudited)(Continued) INCOME STATEMENT 6mths to 30 Jun 2004 ----------------------- UKGAAP Ref IFRS adjustments IFRS $'000 $'000Profit before tax and BA adjustment (12,031) c 7 (12,024)BA adjustment - a (504) (504) -------- --------- -------Profit before tax (12,031) (497) (12,528)Taxation -------- --------- -------Corporation tax 3,211 - 3,211Deferred tax 636 a 151 787 -------- --------- ------- 3,847 151 3,998 -------- --------- -------Profit after tax (8,184) (346) (8,530)Minority interests 1,306 a 27 1,333 -------- --------- -------Distributable profit (6,878) (318) (7,196)Dividends - 2,375 2,375 -------- --------- -------Retained (6,878) 2,057 (4,821) ======== ========= ======= BALANCE SHEET 30 June 2004 ----------------------- UKGAAP Ref IFRS $'000 $'000Non current assetsBiological assets - a 22,313 22,313Property, plant and equipment 117,275 a (22,313) 94,962 -------- --------- ------- 117,275 - 117,275 -------- --------- -------Inventories 2,230 2,230Trade and other receivables 4,171 - 4,171Retirement benefit assets - d 595 595Investments 355 - 355Cash and cash equivalents 6,127 - 6,127 -------- --------- ------- 12,883 595 13,478 -------- --------- -------Current assetsOverdrafts (20) - (20)Other borrowings (3,621) - (3,621)Trade and other payables (7,813) c (7) (7,089) d 731 - -------- --------- -------Current liabilities (11,454) 724 (10,730) -------- --------- ------- Net current assets 1,429 1,319 2,748Long term borrowings (3,450) - (3,450)Deferred tax 316 b (14,823) (14,507)Employee retirement benefit liabilities - d (1,326) (1,326) -------- --------- -------Net assets 115,570 (14,830) 100,740 ======== ========= ======= 6. Restatement adjustments arising from introduction of IFRS (unaudited)(Continued) Share capital (15,319) (15,319)Treasury shares 0 0Share premium (23,679) (23,679)Capital redemption reserve (1,087) (1,087)Revaluation and exchange reserve (5,003) a 325 7,739 b 12,417Profit and loss account - b/f (43,702) e (2,375) (46,077) - year (6,878) 2,057 (4,821) -------- --------- ------- (95,668) 12,424 (83,244)Minority interest (19,902) 2,406 (17,496) -------- --------- ------- (115,570) 14,830 (100,740) ======== ========= ======= INCOME STATEMENT Year to 31 December 2004 ----------------------- UKGAAP Ref IFRS adjustments IFRS $'000 $'000Profit before tax and BA adjustment (24,808) c 14 (24,794)BA adjustment - a (2,304) (2,304) -------- --------- -------Profit before tax (24,808) (2,290) (27,098)Taxation -------- --------- -------Corporation tax 7,869 - 7,869Deferred tax 581 a 691 1,272 -------- --------- ------- 8,450 691 9,141 -------- --------- -------Profit after tax (16,358) (1,599) (17,957)Minority interests 2,694 a 247 2,941 -------- --------- -------Distributable profit (13,664) (1,352) (15,017)Dividends 3,147 e (773) 2,375 -------- --------- -------Retained (10,517) (2,125) (12,642) ======== ========= ======= 6. Restatement adjustments arising from introduction of IFRS (unaudited)(Continued) BALANCE SHEET 31 December 2004 ----------------------- UKGAAP Ref IFRS $'000 $'000Non current assetsBiological assets - a 24,012 24,012Property, plant and equipment 127,302 a (24,012) 103,290 -------- --------- ------- 127,302 - 127,302 -------- --------- -------Inventories 1,535 - 1,535Trade and other receivables 3,778 - 3,778Retirement benefit assets - d 616 616Investments 405 - 405Cash and cash equivalents 14,933 - 14,933 -------- --------- ------- 20,651 616 21,267 -------- --------- -------Current assetsOverdrafts (23) - (23)Other borrowings (5,553) - (5,553)Trade and other payables (13,192) c (14) (9,123) d 936 e 3,147 -------- --------- -------Current liabilities (18,768) 4,069 (14,699) -------- --------- ------- Net current assets 1,883 4,685 6,568Long term borrowings (5,558) - (5,558)Deferred tax 359 b (17,920) (17,561)Employee retirement benefit liabilities - d (1,552) (1,552) -------- --------- -------Net assets 123,986 (14,787) 109,199 ======== ========= ======= Share capital (15,424) (15,424)Treasury shares 1,387 1,387Share premium (23,825) (23,825)Capital redemption reserve (1,087) (1,087)Revaluation and exchange reserve (8,998) a 1,367 7,286 b 14,917Profit and loss account - b/f (43,702) e (2,375) (46,077) - year (10,517) (2,125) (12,642) -------- --------- ------- (102,166) 11,784 (90,382)Minority interest (21,820) 3,003 (18,817) -------- --------- ------- (123,986) 14,787 (109,199) ======== ========= ======= This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
Anglo-Eastern Plantations