Sliding palm oil prices forced earnings to slide at Anglo-Eastern Plantations (AEP) - even though the Indonesian producer sold more palm oil in the period than during last year's first half. Add that price attrition to currency headwinds, as well as to the rising cost of maintaining the group's estates, and near-term catalysts for a re-rating look hard to spot.
After reaching a peak in April, the average palm oil price fell by over $100 (£64) per metric tonne (mt) to $1,095/mt by end-June - as the eurozone debt crisis and a slowing Chinese economy raised concerns over potentially falling demand. That offset the rise in production that AEP achieved from its mature estate, which grew 4 per cent to 595,736mt - comprising fresh fruit production of 340,350mt, an 8 per cent rise, and bought in crops, which fell slightly to 255,386mt. Meanwhile, sales of crude palm oil grew 3 per cent year on year 116,534mt.
Management say the El Niño weather phenomenon is generally expected to lower palm oil output in southeast asia, which, combined with Indian purchases and a poor soybean harvest in North America, should lead to higher prices.
ANGLO EASTERN PLANTATIONS (AEP) | ||||
|---|---|---|---|---|
| ORD PRICE: | 731p | MARKET VALUE: | £289m | |
| TOUCH: | 730-750p | 12-MONTH HIGH: | 842p | LOW: 591p |
| DIVIDEND YIELD: | 0.5% | PE RATIO: | 7 | |
| NET ASSET VALUE: | 1,027¢ | NET CASH: | $69.9m | |
| Half-year to 30 Jun | Turnover ($m) | Pre-tax profit ($m) | Earnings per share (¢) | Dividend per share (¢) |
|---|---|---|---|---|
| 2011 | 129 | 54.1 | 90.0 | nil |
| 2012 | 116 | 38.5 | 51.2 | nil |
| % change | -10 | -29 | -43 | - |
Ex-div: - Payment: - £1=$1.57 | ||||
