Asian Plantations Limited (LSE: PALM), a palm oil plantation company with operations in Malaysia, is pleased to announce its unaudited interim results for the six month period ending 30 June 2011.

Highlights

  • Sale of 1,233 tonnes fresh fruit bunches (“FFB”) sold at an average price of RM671 (circa. US$221) per tonne.
  • Fundraise of £16 million (circa. US$25 million) on 28 February 2011, via an institutional placing at 220 pence per share, representing a premium of 193 per cent. to the Company’s admission price of 75 pence per share on 30 November 2009. 
  • Subsequent to the end of the period under review, on 17 August 2011, the Company raised an additional US$2.1 million, via the issuance of a convertible bond with an effective conversion price of 309 pence per share based on current exchange rates.
  • On 25 August 2011, the announcement of the acquisition of the partly developed 5,000 hectare Dulit estate adjacent to the Company’s existing Incosetia estate. The Dulit estate is expected to generate in excess of 22,000 tonnes of FFB in 2012. This acquisition brings the Company’s total land resource to 20,645 hectares, in line with its growth objectives stated at admission.
  • Aggressive planting programme remains on track and the Company expects its current land resource, including that of the Dulit estate, to be fully planted by early 2014.
  • The Company’s mill is currently under construction and the requisite state approvals have been secured. The mill is expected to be operational in 4Q 2012.

Tan Sri Datuk Linggi, Non-Executive Chairman of APL, commented:

“We are now into our fourth year of significant investment and land development. Based on the current planting schedule and pro forma for the closing of the recently announced Dulit acquisition, we expect to harvest approximately 50,000 tonnes of FFB in 2012, with an eventual target of over 500,000 tonnes per annum, as all four existing fields fully mature in the years ahead.

“The recently announced Dulit acquisition achieves our previously stated strategy to achieve a land resource of titled, Malaysian agricultural land in excess of 20,000 hectares by November 2011, two years following the Company’s admission to AIM.  Further, we anticipate that at the time the Dulit acquisition successfully completes, three of the Company’s four estates will be revenue producing.

“All indicators point to increased scarcity for Malaysian titled land, a relative tightness in global edible oil inventories and rising global awareness about the importance of palm oil in the global food supply chain. Coupling these trends with a healthy edible oil price environment, the board of APL (the “Board”) believes that its strategy of assembling properly titled, land parcels in Malaysia, an investment grade rated country, will generate long term substantial value for the Company’s shareholders.”

Proposed Acquisition

In addition, the Board announces that a subsidiary of the Company has recently entered into a conditional agreement for the proposed acquisition of a Malaysian company (the “Proposed Target”) for a total maximum consideration of up to US$22 million.  The Proposed Target holds a 60 per cent. equity interest in a joint venture company that will have ownership over two distinct land parcels in Sarawak, Malaysia (the “Proposed Acquisition”).  The land parcels, the size of which remains subject to a land survey but which the Board estimates to aggregate up to approximately 20,000 hectares, are to be jointly developed pursuant to a joint venture agreement between the Proposed Target and a Sarawak Government-linked entity.  In respect of the Proposed Acquisition, the completion of which remains subject to Board approval, the Company has paid a refundable deposit of RRM7.9 million (US$2.5 million) to the Proposed Target until completion of APL’s due diligence exercise, expected to be within two to three months, at which point the Board will decide whether to further pursue the opportunity.  In the event that the Board decides to pursue the Proposed Acquisition, APL will seek to secure the required funding via a combination of an equity fundraise and/or a new debt facility. A further announcement will be made in due course.