M.P. EVANS GROUP PLC — Interim / Quarterly Report 2021

Sep 13, 2021

National Storage Mechanism | Additional information

RNS Number : 4773L

M. P. Evans Group PLC

13 September 2021

M.P. EVANS GROUP PLC

M.P. Evans Group PLC ("M.P. Evans" or "the Group"), a producer of sustainable Indonesian palm oil, announces its unaudited interim results for the six months ended 30 June 2021.

highlights

Operations

·    Group's operations relatively unaffected by Covid-19

·    24% increase in Group crop to 413,200 tonnes

·    Total crop processed up by 28% to 702,300 tonnes

·    29% increase in total CPO production 161,400 tonnes

·    Cost of palm product down by US$50 per tonne to US$335

Financial

·    34% increase in ex-mill-gate CPO price to US$724 per tonne

·    111% increase in sustainability premia to US$1.9 million

·    Operating profit up by 588% to US$41.3 million (2020 US$6.0 million)

·    21% decrease in net debt to US$67.7 million (2020 US$85.6 million)

·    572% increase in earnings per share to 38.3p (2020 - 5.7p per share)

·    Interim dividend doubled to 10p per share (2020 - 5p per share)

Post-period end

·    Palm-oil price remains strong; 8-month average ex-mill-gate price for 2021 up to US$738

·    Group's fifth palm-oil mill opened at Bumi Mas

·    Planting restarted at Musi Rawas

·    Updated strategic approach highlighted with focus on four pillars: Responsibility, Excellence, Growth and Yield

·    Intention to pay dividend of at least 30p per share for 2021 (2020 - 22p per share)

M.P. Evans executive chairman, Peter Hadsley-Chaplin, commented: "Earnings for the period are very substantially higher than last year following the anticipated continued upward trajectory of crops and the strong palm-oil market. Both these trends have continued into the second half and are likely to form the basis for an excellent result for the year. We are delighted to propose an interim dividend of 10p per share."

13 September 2021

Enquiries:

M.P. Evans Group PLC	Telephone: 01892 516333
Peter Hadsley-Chaplin - Executive chairman
Matthew Coulson - Finance director
Peel Hunt LLP (Nomad and joint broker)	Telephone: 020 7418 8900
Dan Webster
Andrew Clark
finnCap (Joint broker)	Telephone: 020 7220 0500
Tim Redfern
Chris Raggett Sunila de Silva
Hudson Sandler (Communications consultants)	Telephone:  020 7796 4133
Charlie Jack
Elfie Kent

An analysts' meeting will be held remotely at 9:30am and those wishing to participate should contact mpevans@hudsonsandler.com for further details.

Overview

The Group achieved a dramatic increase in profitability in the first half of 2021, as a result of significant increases in both prices and production. Gross profit was US$42.7 million in the period compared to US$8.9 million in the first half of 2020, whilst operating profit for the first half of the year was US$41.3 million compared to US$6.0 million in the same period in 2020. The total crop processed by the Group rose by 28% to 702,300 tonnes, with increases in total crop observed at all the Group's estates. Particularly notable were the doubling of crop at Musi Rawas as the palms mature at that developing estate, and the 72% increase at Bangka as crops recovered from a period of low rainfall that had affected production in 2020. Crude palm oil ("CPO") production rose overall by 29% to 161,400 tonnes in the period, whilst CPO production in Group mills increased by 30% to 125,900 tonnes, as a result of both rising crop and having the Group's Rahayu mill in operation throughout the first six months of 2021.

CPO prices had increased significantly in the latter part of 2020 and remained at high levels throughout the first half of this year. As previously reported by the Group, the Indonesian government introduced a change to the CPO export levy structure from December 2020, the result of which was that the Group did not receive the full benefit of increased prices. However, mill-gate prices were still significantly higher, up by 34% on the first half of 2020. In addition, rising crops helped the Group to continue to keep tight control over its costs, and the cost of production fell by US$50 per tonne in the first half of the year to US$335 for CPO produced from Group-controlled areas.

The Group continued to be highly cash generative, recording an operating cash inflow before tax and interest payments of US$33.0 million compared to US$11.2 million in 2020. The Group remains focused on completing the development of its existing estate portfolio, and invested US$15.1 million in capital expenditure during the period. Its most significant project was its fifth oil-palm mill, a 60-tonne-per-hour processing facility at the Bumi Mas project in East Kalimantan, which began processing after the end of the period, in August 2021. The Group was able, even after capital investment and an increased dividend payment to shareholders, to reduce net debt in the period by US$10.4 million, both as some of the Group's scheme smallholders reach a point of being able to access independent finance and repay funding provided by the Group, and as a reflection of the Group's strong operating cash flows.

Covid-19 update

The Group continues to monitor carefully the global Covid-19 situation, with a particular focus on the locations in which it has operations. It remains the case that the pandemic has had relatively little effect on the Group's business. Preventative measures remain in place, and the Group adjusts its response based on latest guidance, including the use of travel restrictions, access controls and remote working where possible. A significant number of the Group's workforce has received Covid-19 vaccinations, and vaccination rates continue to increase. All estates and mills operated without interruption during the period.

Dividends

The board proposes to pay an interim dividend of 10p per share (2020 - 5p per share), and considering the marked increase in crop and production both shown in these results and projected for the immediate future, and also in light of the prospects for the palm-oil market, the board intends to recommend a total dividend of at least 30p per share in respect of 2021.

The board believes that the developing maturity of the Group's estates combined with increasing milling capacity form a basis for strong cash flows, and hence the opportunity for further significant increases in shareholder returns. The board intends to continue its long-standing policy of at least maintaining, and where possible increasing, the dividend.

Strategy update

Responsibility, excellence, growth and yield represent the four pillars of the Group's strategic approach. Acting responsibly is at the heart of what the Group does. The Group is an active member of the RSPO, it does not deforest, and is a good steward of the land it cultivates. The Group provides housing along with medical, educational and leisure facilities for workers and their families. Excellence comes from investing for the long term, not only in plantation assets but also in people, including in their training and development. In this way, the Group is consistently able to deliver both high yields and high oil extraction rates from its estates and mills. The Group seeks to grow and develop from the increasing maturity of its young estates, from the ongoing focus on improving yields, and from the planned acquisition and sustainable development of new areas of land. The Group's investment strategy has already led to a significant improvement in shareholder returns. In line with its growth programme, the Group plans to deliver ever-increasing returns to shareholders.

Results for the period

Crops and production

Details of the Group's crops, production, extraction rates and average selling prices for the first half of 2021 are shown in the following table:

	6 months ended			6 months ended	Year ended
		30 June	Increase/	30 June	31 December
---	---	---	---	---	---
		2021	(decrease)	2020	2020
---	---	---	---	---	---
		Tonnes	%	Tonnes	Tonnes
---	---	---	---	---	---
Crop Fresh fruit bunches
Own crops
Kota Bangun		104,200	21	86,300	186,400
Bangka		89,200	72	52,000	127,500
Pangkatan group		83,500	6	79,000	170,300
Bumi Mas		80,700	2	78,900	154,300
Musi Rawas		31,800	101	15,800	44,500
Simpang Kiri		23,800	8	22,100	41,300
		413,200	24	334,100	724,300
Scheme-smallholder crops
Kota Bangun		45,500	17	38,900	81,500
Bangka		45,900	84	24,900	64,400
Bumi Mas		14,300	4	13,800	26,900
Musi Rawas		15,200	117	7,000	20,200
		120,900	43	84,600	193,000
Independent-smallholder crop
processed
Kota Bangun		107,300	100	53,600	142,500
Bangka		41,700	(29)	58,900	112,800
Pangkatan group		19,200	4	18,400	34,400
		168,200	28	130,900	289,700
		702,300	28	549,600	1,207,000
Production
Crude palm oil
Kota Bangun		59,900	37	43,600	96,500
Bangka		42,800	36	31,400	69,600
Pangkatan group		23,200	5	22,000	46,100
		125,900	30	97,000	212,200
Bumi Mas		20,600	12	18,400	37,400
Musi Rawas		9,600	109	4,600	13,200
Simpang Kiri		5,300	10	4,800	8,900
		35,500	28	27,800	59,500
		161,400	29	124,800	271,700
Palm kernels
Kota Bangun		11,400	33	8,600	19,300
Bangka		10,100	31	7,700	16,900
Pangkatan group		5,400	6	5,100	10,800
		26,900	26	21,400	47,000
Bumi Mas		4,500	2	4,400	8,600
Musi Rawas		2,200	120	1,000	2,900
Simpang Kiri		1,100	10	1,000	1,900
		7,800	22	6,400	13,400
		34,700	25	27,800	60,400

Extraction rate			%
Crude palm oil
Kota Bangun - Bumi Permai	23.9	(2)	24.4	23.8
Kota Bangun - Rahayu	22.4			21.6
Bangka	24.2	5	23.1	22.9
Pangkatan group	22.6	-	22.6	22.5
	23.5	-	23.5	23.1
Bumi Mas	21.7	9	19.9	20.7
Musi Rawas	20.5	1	20.3	20.4
Simpang Kiri	22.5	5	21.5	21.5
Palm kernels
Kota Bangun - Bumi Permai	4.7	(2)	4.8	4.9
Kota Bangun - Rahayu	4.1			4.0
Bangka	5.7	-	5.7	5.5
Pangkatan group	5.3	2	5.2	5.3
	5.0	(4)	5.2	5.1
Bumi Mas	4.7	(2)	4.8	4.7
Musi Rawas	4.6	-	4.6	4.6
Simpang Kiri	4.5	-	4.5	4.5
Average selling prices	US$		US$	US$
CPO (cif Rotterdam)	1,115		648	716
CPO - Group ex mill gate	724		541	591
Palm-kernel oil	1,275		718	796
Palm kernels - Group ex mill gate	491		298	316

Sales prices

CPO prices began to rise sharply in the latter part of 2020, and remained at high levels throughout the first half of 2021, with an average cif Rotterdam price of US$1,115, 72% higher than the same period in 2020. The increase did not translate fully into a rise in the mill-gate price following an increase in the export levy applied to CPO announced in December 2020 by the Indonesian government. Where previously applied at a flat rate of US$55 per tonne, the government introduced an increasing charge up to a maximum of US$255 per tonne at CPO prices over US$1,000. As a result of the higher export levy, along with the existing export tax which also increases at higher prices, the average mill-gate price in the first half of the year was US$724. However, this was still a significant 34% increase on the same period in 2020. As part of this price, the Group received an average of US$10 per tonne sustainability premium on sale of CPO, up by US$2 on the previous year.

For palm kernels, the Group received US$491 per tonne in the first half of the year, a significant 65% recovery in the price compared to the US$298 received in the same period in 2020, consistent with the increase in Rotterdam CPO prices. Within this, the Group received an average of US$26 per tonne sustainability premium on palm kernels, compared to US$9 in 2020. Premia were significantly higher, partly in line with palm-kernel prices, but also as demand for products containing sustainably sourced palm-kernel oil, including cosmetics, continued to increase.

Production costs

The cost per tonne of palm product (CPO and palm kernels) produced from the Group's own areas was US$335 in the first half of the year, US$50 lower than in the first half of 2020. The decrease can primarily be attributed to the effect of processing higher volumes of crop compared to the previous year, but the Group also benefitted from a one-off non-cash credit of US$2.1 million in the first half of the year due to a change in Indonesian pension legislation, further reducing costs. The effect of this on cost per tonne will be diluted in the 2021 full year results.

The cost of purchasing ffb from both scheme smallholders and independent smallholders increased significantly in the first half of 2021 compared to 2020 as purchase costs are linked to CPO prices. As a result, the Group's total cost per tonne at its mills in the first half of 2021, including ffb from all sources, was US$437 (2020 US$410) compared to an average ex-mill-gate price in the same period of US$724 (2020 US$541). Total gross profit was US$37.3million (2020 US$10.7 million) from those locations where the Group has its own milling facilities.

Performance at the Group locations which do not yet have their own mills continues to improve as a result of higher prices, better extraction rates agreed with outside mills, and improving yields and efficiency. For the first half of 2021, those locations achieved a gross profit of US$5.5 million compared to a gross loss of US$1.8 million in the first half of 2020.

Planting

Following the announcement of changes to RSPO rules, the Group paused planting at its Musi Rawas estate in late 2019, and subsequently provided all necessary documentary evidence to demonstrate compliance with the updated requirements. The Group received clearance from the RSPO at the end of July 2021 that planting could restart. There are 8,000 planted hectares at Musi Rawas and, based on the clearance now received, the Group remains confident of being able to reach a total of at least 10,000 hectares. Elsewhere in the first half of 2021, the Group undertook a small amount of new planting and replanting totalling 126 hectares.

New land

In line with the Group's strategy, it is continuing to look for opportunities to acquire additional land close to its existing estates. It is currently pursuing potential acquisitions near both Kota Bangun and Simpang Kiri. Land acquisition close to Simpang Kiri may subsequently justify developing a mill to process the Group's ffb, further increasing returns to shareholders. In North Sumatra, the Group is supporting the formation of independent smallholder co-operatives which will add another source of ffb to the Pangkatan mill. At the end of June 2021, independent smallholder co-operatives covering 883 hectares had been formed.

Sustainability

Of the Group's production, 54% is certified sustainable palm oil. Certification is awarded to mills rather than for the crop, and even after new mills are opened there is a necessary process of demonstrating compliance with RSPO requirements for a period of time, followed by an independent audit, before certification is received. The Group remains committed to significantly increasing its milling capacity, processing ffb in its own mills, and achieving certification for each one. In the meantime, all the Group's crop and that of its associated scheme smallholders is produced in full accordance with RSPO standards.

Malaysia: sale of Bertam Estate

As reported previously, the Group reached an agreement in 2020 to sell the wholly owned 70-hectare Malaysian estate to Bertam Properties Sdn. Berhad ("Bertam Properties"), the Group's 40%-held Malaysian property joint venture. All sale conditions were met before 30 June 2021, other than the finalisation of bank finance by Bertam Properties, which was delayed by Covid-19 restrictions in Malaysia, but is expected to occur before the end of October. Total sale consideration is RM99.9 million (US$24.1 million), and the transaction will be taxed at the 10% Real Property Gains Tax rate in Malaysia.

Malaysian associate: Bertam Properties

Bertam Properties achieved a profit in the first half of the year, of which the Group's share was US$0.2 million, compared to breaking even in the first half of 2020. Whilst conditions in the Malaysian property market remain challenging, Bertam Properties continues to show resilience, and to perform well within its location and market.

Result

The Group recorded revenue of US$128.0 million in the first six months of 2021, up by 69% on the same period in 2020 as both  prices and production increased significantly. Gross profit increased by a factor of almost five to US$42.7 million whilst operating profit increased more than sixfold to US$41.3 million as costs were well controlled and margins increased. Whilst slightly lower, finance costs were similar to the same period last year at US$1.4 million. After interest, tax, and recognising its share of the profits of associated companies, the Group recorded a profit of US$30.4 million in the first six months of the year, US$26.1 million higher than in the previous period. Earnings per share were 38.3 pence.

CURRENT TRADING AND PROSPECTS

Group crops continued to follow a similar pattern in the two months to August 2021 to that observed in the first half of the year, although during these two months there was a significant increase in crop at the Group's Kota Bangun estates, reflecting the relative timings of high and low cropping periods. The total crop processed in the two months was 227,500 tonnes, bringing the total for the year to date to 929,800 tonnes as shown in the following table:

	8 months ended			8 months ended
		31 August		31 August
---	---	---	---	---
		2021	Increase	2020
---	---	---	---	---
		Tonnes	%	Tonnes
---	---	---	---	---
Own crops		555,900	24	449,300
Scheme-smallholder crops		158,500	43	110,800
Independent-smallholder crop processed		215,400	30	165,800
		929,800	28	725,900

The Group's fifth palm-oil mill began operation at Bumi Mas in August, and CPO is now being transferred to the recently completed bulking facility on the estate, ready for the first Group dispatch from that location. Having completed construction, the Bumi Mas mill is being monitored by mill and engineering management to ensure that efficiency and extraction rates can be maximised. In addition, the Group's engineering team have completed the majority of the tendering for the Group's new palm-oil mill at Musi Rawas. Groundworks are already well advanced, and construction is expected to start during the final quarter of 2021.

At the start of July, the cif Rotterdam palm-oil price was US$1,060 per tonne, and increased during the two months to the end of August, ending the period at US$1,235. Furthermore, the Indonesian government announced a reduction in the export levy applied to CPO, taking effect from 2 July 2021, which reduced the highest levy from US$255 per tonne to US$175. A combination of increasing prices and the levy reduction helped to increase ex-mill-gate prices in the two months to August, resulting in an increase in the Group's average mill-gate price from the US$724 in the first six months of the year to US$738 for the first eight months of the year.

The rollout of the Covid-9 vaccination programme is continuing in Indonesia and gathering momentum. By the end of August, over 40% of the Group's workforce had received at least one vaccination, and this percentage is expected to increase significantly by the year end. All the Group's mills and estates are continuing to operate without interruption.

As indicated above, CPO prices remained strong in the first two months of the second half of 2021, and given the continued strength evident in the forward markets, the full-year average cif Rotterdam price is likely to be at a multi-year high. Looking into 2022, much depends on the extent to which production in Malaysia recovers if and when foreign labour restrictions are relaxed as Covid-19 is brought under control. Palm oil is also dependent on developments in the wider vegetable-oil market, in particular the soya-oil market which is likely to continue to be influenced by weather patterns in the Americas. In addition, with regard to input costs, there may be some upward pressure arising from increases in fertiliser and other costs. However, production increases will help to mitigate against any increases in unit costs.

Irrespective of developments in the wider market, the board is of the view that a combination of rising yields, increasing milling capacity and a focus on controlling costs puts the Group in a strong position to generate rising cash flows and returns for shareholders, and that the outlook remains positive.

UNAUDITED CONSOLIDATED INCOME STATEMENT

For the six months ended 30 June 2021

		6 months	6 months
		ended	ended	Year ended
---	---	---	---	---
		30 June	30 June	31 December
---	---	---	---	---
		2021	2020	2020
---	---	---	---	---
	Note	US$'000	US$'000	US$'000
---	---	---	---	---
Continuing operations
Revenue	3	128,033	75,894	174,510
Cost of sales*		(85,302)	(67,023)	(139,755)
Gross profit	3	42,731	8,871	34,755
Gain on biological assets		762	(647)	682
Foreign-exchange losses		(570)	(799)	(1,068)
Other administrative expenses		(2,350)	(2,207)	(4,587)
Other income		718	824	1,539
Operating profit		41,291	6,042	31,321
Finance income		244	308	527
Finance costs		(1,445)	(1,928)	(3,408)
Profit before taxation		40,090	4,422	28,440
Tax on profit on ordinary activities		(9,656)	(749)	(7,692)
Profit after tax		30,434	3,673	20,748
Share of associated companies' profit after tax	3	774	635	1,421
Profit for the period		31,208	4,308	22,169
Attributable to:
Owners of M.P.Evans Group PLC		28,857	3,896	20,371
Non-controlling interests		2,351	412	1,798
		31,208	4,308	22,169
		US cents	US cents	US cents
Continuing operations
Basic earnings per 10p share		53.0	7.2	37.4
Diluted earnings per 10p share		52.8	7.1	37.3
		Pence	Pence	Pence
Basic earnings per 10p share
Continuing operations		38.3	5.7	29.2

*includes a US$2.1 million past service credit in 2021 relating to past service liabilities in Indonesia

UNAUDITED CONSOLIDATED BALANCE SHEET

As at 30 June 2021

		30 June	30 June	31 December
		2021	2020	2020
---	---	---	---	---
	Note	US$'000	US$'000	US$'000
---	---	---	---	---
Non-current assets
Goodwill		11,767	11,767	11,767
Other intangible assets		1,298	1,453	1,381
Property, plant and equipment		394,981	376,199	390,642
Investments in associates		21,123	21,272	22,154
Investments		65	63	67
Deferred-tax asset		4,129	4,985	5,046
Trade and other receivables		11,743	11,555	10,917
		445,106	427,294	441,974
Current assets
Biological assets		3,511	1,419	2,749
Inventories		14,846	12,359	11,617
Trade and other receivables		45,093	44,970	48,620
Current-tax asset		3,600	3,430	3,968
Current-asset investments		324	329	334
Cash and cash equivalents		29,737	11,822	27,222
		97,111	74,329	94,510
Total assets		542,217	501,623	536,484
Current liabilities
Borrowings		39,743	37,426	39,605
Trade and other payables		22,119	21,374	26,039
Current-tax liabilities		6,946	715	6,003
		68,808	59,515	71,647
Net current assets		28,303	14,814	22,863
Non-current liabilities
Borrowings		58,007	60,296	66,079
Trade and other payables		-	151	38
Deferred-tax liability		11,371	10,173	10,529
Retirement-benefit obligations		12,086	10,091	14,051
		81,464	80,711	90,697
Total liabilities		150,272	140,226	162,344
Net assets		391,945	361,397	374,140
Equity
Share capital	5	9,204	9,204	9,204
Other reserves		54,297	55,514	55,090
Retained earnings		316,343	287,305	300,117
Equity attributable to the
owners of M.P.Evans Group PLC		379,844	352,023	364,411
Non-controlling interests		12,101	9,374	9,729
Total equity		391,945	361,397	374,140

UNAUDITED STATEMENT OF CHANGES IN CONSOLIDATED TOTAL EQUITY

For the six months ended 30 June 2021

			6 months	6 months	Year
---	---	---	---	---	---
			ended	ended	ended
---	---	---	---	---	---
			30 June	30 June	31 December
---	---	---	---	---	---
			2021	2020	2020
---	---	---	---	---	---
	Note		US$'000	US$'000	US$'000
---	---	---	---	---	---
Profit for the period			31,208	4,308	22,169
Other comprehensive expense for the period			(356)	(979)	(2,189)
Total comprehensive income for the period			30,852	3,329	19,980
Issue of share capital			-	23	-
Share buy-backs			-	(1,155)	(1,155)
Dividends paid	4		(13,150)	(8,594)	(12,980)
Credit to equity for equity-settled share-based payments			103	108	609
Transactions with owners			(13,047)	(9,618)	(13,526)
At 1 January			374,140	367,686	367,686
Balance at period end			391,945	361,397	374,140

UNAUDITED CONSOLIDATED CASH-FLOW STATEMENT

For the six months ended 30 June 2021

			6 months	6 months	Year
			ended	ended	ended
---	---	---	---	---	---
			30 June	30 June	31 December
---	---	---	---	---	---
			2021	2020	2020
---	---	---	---	---	---
	Note		US$'000	US$'000	US$'000
---	---	---	---	---	---
Net cash generated by operating activities	6		24,954	4,514	39,598
Investing activities
Purchase of property, plant and equipment			(15,084)	(16,459)	(41,409)
Purchase of intangible assets			-	(102)	(113)
Interest received			244	308	108
Decrease in bank deposits treated as
current asset investments			10	831	826
Decrease in receivables from smallholder
co-operatives			13,013	3,172	3,886
Proceeds on disposal of property, plant and equipment			516	206	732
Net cash used by investing activities			(1,301)	(12,044)	(35,970)
Financing activities
New borrowings			-	10,000	24,581
Repayment of borrowings			(7,934)	(6,752)	(13,307)
Lease liability payments			(108)	(104)	(209)
Dividends paid to Company shareholders			(13,150)	(8,594)	(12,105)
Purchase of non-controlling interests			-	-	(89)
Buy-back of Company shares			-	(1,155)	(1,155)
Net cash used by financing activities			(21,192)	(6,605)	(2,284)
Net increase/(decrease) in cash and cash equivalents			2,461	(14,135)	1,344
Cash and cash equivalents at 1 January			27,222	25,947	25,947
Effect of foreign-exchange rates on cash and cash equivalents			54	10	(69)
Net cash and cash equivalents at period end			29,737	11,822	27,222

NOTES TO THE INTERIM STATEMENTS

For the six months ended 30 June 2021

Note 1             General information

The financial information for the six-month periods ended 30 June 2021 and 2020 has been neither audited nor reviewed by the Group's auditors and does not constitute statutory accounts within the meaning of section 434 of the Companies Act 2006.  The financial information for the year ended 31 December 2020 is abridged from the statutory accounts.  The 31 December 2020 statutory accounts have been reported on by the Group's auditors for that year, BDO LLP, and have been filed with the Registrar of Companies.  The report of the auditors thereon was unqualified and did not contain a statement under section 498(2) or (3) of the Companies Act 2006, nor did it contain any matters to which the auditors drew attention without qualifying their audit report.

Note 2             Accounting policies

The consolidated financial results have been prepared in accordance with International Financial Reporting Standards (IFRS and IFRIC interpretations) issued by the International Accounting Standards Board (IASB), and with those parts of the Companies Act 2006 applicable to companies preparing accounts under IFRS.

The accounting policies of the Group follow those set out in the annual financial statements at 31 December 2020. The Group has made a number of critical accounting judgements and key estimates in the preparation of this interim report, and they remain consistent with those set out in note 3(r) to the 2020 annual financial statements.

Note 3             Segment information

The Group's reportable segments are distinguished by location and product: Indonesian oil-palm plantation products in Indonesia and Malaysian property development.

	Plantation		Property
	Indonesia		Malaysia	Other	Total
---	---	---	---	---	---
	US$'000		US$'000	US$'000	US$'000
---	---	---	---	---	---
6 months ended 30 June 2021
Revenue	127,984		-	49	128,033
Gross profit/(loss)	42,753		-	(22)	42,731
Share of associated companies' profit after tax	565		209	-	774
6 months ended 30 June 2020
Revenue	75,863		-	31	75,894
Gross profit/(loss)	8,915		-	(44)	8,871
Share of associated companies' profit after tax		592	43	-	635
Year ended 31 December 2020
Revenue	174,458		-	52	174,510
Gross profit/(loss)	34,851		-	(96)	34,755
Share of associated companies' profit after tax	1,070		351	-	1,421

Note 4             Dividends

	6 months ended	6 months ended	Year ended
	30 June	30 June	31 December
---	---	---	---
	2021	2020	2020
---	---	---	---
	US$'000	US$'000	US$'000
---	---	---	---
2019 final dividend - 12.75p per 10p share	-	8,594	8,594
2020 interim dividend - 5.00p per 10p share	-	-	3,511
2020 final dividend - 17.00p per 10p share	13,150	-	-
	13,150	8,594	12,105

Subsequent to 30 June 2021, the board has declared an interim dividend of 10p per 10p share. The dividend will be paid on or after 5 November 2021 to those shareholders on the register at the close of business on 15 October 2021.

Note 5                         Share capital

	30 June	30 June	31 December	30 June	30 June	31 December
	2021	2020	2020	2021	2020	2020
	Number	Number	Number	US$'000	US$'000	US$'000
Shares of 10p each
At 1 January	54,490,253	54,461,220	54,461,220	9,204	9,200	9,200
Issued	-	182,320	182,320	-	23	23
Redeemed	-	(153,287)	(153,287)	-	(19)	(19)
At period end	54,490,253	54,490,253	54,490,253	9,204	9,204	9,204

Note 6             Analysis of movements in cash flow

	6 months ended		6 months ended	Year ended
	30 June		30 June	31 December
---	---	---	---	---
	2021		2020	2020
---	---	---	---	---
	US$'000		US$'000	US$'000
---	---	---	---	---
Operating profit	41,291		6,042	31,321
Biological (gain)/loss	(762)		647	(682)
Disposal of property, plant and equipment	96		194	1,008
Release of deferred profit	(23)		(21)	(58)
Depreciation of property, plant and equipment	10,077		8,580	17,776
Amortisation of intangible assets	83		82	165
Retirement-benefit obligation	(1,862)		690	2,148
Share-based payments	241		108	609
Dividends from associated companies	1,216		-	1,646
Operating cash flows before movements
in working capital	50,357		16,322	53,933
Increase in inventories	(3,229)		(1,287)	(545)
Increase in receivables	(10,312)		(3,025)	(7,574)
(Decrease)/increase in payables	(3,832)		(851)	3,806
Cash generated by operating activities	32,984		11,159	49,620
Income tax paid	(6,585)		(4,717)	(6,614)
Interest paid	(1,445)		(1,928)	(3,408)
Net cash generated by operating activities		24,954	4,514	39,598

Note 7             Exchange rates

		30 June	30 June	31 December
		2021	2020	2020
---	---	---	---	---
US$1=Indonesian Rupiah	-     average	14,273	14,579	14,541
	-     period end	14,500	14,285	14,050
US$1=Malaysian Ringgit	-     average	4.10	4.25	4.20
	-     period end	4.15	4.29	4.02
£1=US Dollar	-     average	1.38	1.26	1.28
	-     period end	1.38	1.24	1.37

This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact rns@lseg.com or visit www.rns.com.

RNS may use your IP address to confirm compliance with the terms and conditions, to analyse how you engage with the information contained in this communication, and to share such analysis on an anonymised basis with others as part of our commercial services. For further information about how RNS and the London Stock Exchange use the personal data you provide us, please see our Privacy Policy.

END

IR SFAFWSEFSESU