CPO price is now over $1200 |
The trading statement is out a month earlier than on the calendar.
Production weaker due to felling and lower Indonesian output. Slightly weaker than I expected but nothing that really matters. Felling is part of the business and lower yields are good news.
The way to big profits in a commodity business is contrained output. |
Even if they only pay the minimum 25% dividend (the policy is at least 25%), the dividend should be meaningfully higher than last year.
Looks to me like it could be 45-50 cents if palm oil prices hold up until the end of the year. |
Finally is a bit.
Is the seller done? |
So why is the share not going up ? |
Yes. That's also true of today's announcement.
I think anything which indicates they aren't just sitting around accruing cash is bullish. |
The loss making Malaysian operation contributed $2m sales and $11m assets out of totals of $371m and $575m respectively. I imagine they are seeking to dispose but it's immaterial. |
There's still Malaysia left, they only own 55% of it.
The trees there are very old and it's loss making.
This company can get stuff done when the will is there. |
So we are the next minority to be tidied up! |
Some more good news :
We can't say that nothing is happening here...
Anglo-Eastern Plantations Plc, which owns, operates and develops plantations in Indonesia and Malaysia, is pleased to announce the completion of the acquisition of the remaining minority interests in the following Indonesian subsidiaries from PT Malindo Plantation Management Services for a total consideration of US$400,000.
· 5% of the issued share capital of PT Bangka Malindo Lestari ("BML")
· 0.5% of the issued share capital of PT Kahayan Agro Plantation ("KAP")
Following these transactions, the Company owns 100% of the issued share capital of all its subsidiaries in Indonesia and has fulfilled the Group's objective of consolidating AEP's holding in its Indonesian subsidiaries with the Group's cash resources. |
CPO CIF Rotterdam at US$1300 now.
Money spigots are open.
The market eventually will notice this fact.
The share price starts to reflect it a bit... |
INDONESIAN GOVERNMENT ANNOUNCES REDUCTION IN EXPORT LEVY
M.P. Evans Group PLC, a producer of sustainable Indonesian palm oil, notes the recent announcement by the Indonesian government regarding changes to its export levy for crude palm oil ("CPO"), which are effective immediately. Previously, the levy was charged at graduated amounts, increasing in US$50 per tonne bands. This approach is being replaced with a lower 7.5% export levy. As before, the levy is set monthly based on a reference price connected to the global CPO commodity price. There is no change to the separate export tax which continues to be charged in increasing amounts at each US$50 per tonne price band. |
Let's hope things start moving a bit now.
Meanwhile, we're at the highest CPO price in 2 years.
And this in seasonal peak production period. |
Change at the top. Probably not a bad thing! |
"MPE's market cap now 2x AEP"
Because MPE's capital allocation policy is smart; AEP's is not. A fight is surely coming here on who gets what of the locked up value, locked up value to be extracted by an improvement in the policy of just piling up idle cash, however the change in that policy comes.
My family is in all three. The share price driver for REA could be the redemption of the 2025 sterling loan note out of cash profits, a loan note that comes with costly admin. MPE is a paragon of excellence but may face headwinds from a change in the Budget, and AEP just requires patience. All IMO. DYOR. |
MPE's market cap now 2x AEP. |
And CPO price is at the highest level since July 2022... |
The $ value of the cash + investments + receivables etc. will be ramping as the Rupiah strengthens.
Not that it matters. |
The thing is, I don't think MPE is overvalued, by any means. But the "valuation gap" between how the market values MPE and how it values AEP is just crazy, esp. if you take the cash position of AEP into account.
Oh well, time will tell here... |
Yes, excellent management over there.
By the way, it was also the Nokia Bell fund that blocked the takeover of MPE a few years ago... |
MPE interims out. Excellent results over there. |
Not that it matters, but there's bullish news for the sector:
1. Indonesia to reach B40 in January and aiming for B50 afterwards.
2. Indonesia is mulling reducing export taxes on palm oil.
3. Indonesian palm oil production in 2024 may be as much as 5% lower than in 2023 and global palm oil reserves may hit the lowest in three years. |
Hi Skanjete!
I realise that no "major minority" shareholder is going to sell out at 600p / share!
But the current share price will work to dampen expectations, so it's not meaningless.
And the fact is the company has enough cash / near cash inside it for Genton to be able to offer 800p+ per share to the other shareholders without having to dig in their own pockets. All they would need to do is to arrange some kind of bridging loan to effect the buy-out!
I think the giveaway as to future intentions was the slow-walking and then the cancellation of the share buyback.
To be honest, I can't work out if I should be outraged or if I should buy more at this artificially suppressed share price! |
Theoretically, that's correct.
But in practice, it will depend on the price minorities like Nokia Bell will accept. And that price won't be based on the current share price of AEP. More likely, it could be based on the valuation of companies like MP Evans or Sipef. |
Or, in other words, the major shareholder could likely engineer a buy-out of the minorities just by using the company's own cash-pile - no new money required!
I figure nothing will happen until the law-suits over Madame Lim's will are settled. And then we'll see.
Compared to sector peer MPE this is as cheap as chips. And MPE isn't overvalued. But perhaps there are good reasons for AEP being so cheap... |
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