A replanting programme, bad weather and Chinese wage inflation put the squeeze on revenues and margins for Asian Citrus Holdings (ACHL) at the half-year mark, although a tasty special dividend would have made the news a little more palatable for shareholders.
Asian Citrus reported a 6 per cent decline in orange production, primarily due to the replanting programme at the Hepu plantation although this should facilitate a steady rise in tonnage over coming years. Turnover from orange sales fell by 6.8 per cent to ¥600m (£63.5m), while lower prices for pineapple concentrate reduced turnover at the Beihai juice business by 27 per cent to ¥290m.
Gross margins on orange sales fell by almost 10 percentage points to 35.1 per cent. This was partly due to persistent rainfall through April to August, which simply washed away costly pesticides and fertilisers that, then, had to be replaced. This increased unit costs at the Hepu and Xinfeng plantations by 31 & 12 per cent, respectively. Wage costs at the plantations increased by 29 per cent to ¥41.9m. This fed through into a 43 per cent fall in cash profits to ¥272m, while net earnings were hit by a ¥23m fair value impairment, against a gain of ¥100m gain in 2011.
Kim Eng (HK) expects flat full-year EPS of ¥0.51, rising to ¥0.61 in 2013/14.
| ASIAN CITRUS HOLDINGS (ACHL) | ||||
|---|---|---|---|---|
| ORD PRICE: | 29.5p | MARKET VALUE: | £362m | |
| TOUCH: | 29-30p | 12-MONTH HIGH: | 49p | LOW: 26p |
| DIVIDEND YIELD: | 5.7% | PE RATIO: | 6 | |
| NET ASSET VALUE: | ¥6.71* | NET CASH: | ¥1.34bn | |
| Half-year to 31 Dec | Turnover (¥bn) | Pre-tax profit (¥m) | Earnings per share (sen) | Dividend per share (sen) |
|---|---|---|---|---|
| 2011 | 1.04 | 405 | 32.7 | 3** |
| 2012 | 0.89 | 218 | 17.4 | 3** |
| % change | -14 | -46 | -47 | - |
Ex-div:14 Mar Payment:12 Apr £1 = ¥9.454 - ¥1 = 100 sen *Includes intangible assets of ¥1.23bn, or 100 sen a share **Excludes a special dividend of 2 sen | ||||
