Anglo-eastern Plantations Share Discussion Threads

[34adsaddsa] 21/3/2023 11:03

£126,614.29 spent. That's huge.

Could be nothing, could be a very big deal.

[ilad60] 21/3/2023 10:30

John purchased 15,894 ordinary 25 pence shares in the Company at an average price of 797 pence per share.

great

[skanjete2] 27/1/2023 11:51

It's clear that REA will relatively profit more from higher CPO prices. For sure.

But the risk profile is from a different magnitude.

If you consider things on a longer term (5-10years) I would bet on AEP.

[nobull] 26/1/2023 18:28

"AEP is by far the better managed company. Look at their respective long term value creation."

Agreed that that has been the case in the past, but AEP is not creating value with the cash, and seems to have no plans to do so; REA should be able to reduce its net debt figure from $184m to, say, $120m over the next 18 months (it should receive a $35m coal loans repayment, which will help - yes, there is some off balance sheet 'debt' to repay too, I know, the pref arrears, but still with all that EBITDA in prospect from its oil palms business, surely getting the net debt down to $120m is do-able? $64m added to the market cap of the ords would really be some value creation. JMV.

Let's, for a laugh, come back to this after publication of the 2023 annual results of both companies(May 2024?) and see which share price has outperformed from today with REA at 101.5p and AEP at 770p. I am not saying that if REA outperforms share price wise that that is outperformance on a risk adjusted basis, just in absolute terms.

[skanjete2] 25/1/2023 17:25

Good luck on REA. You can as well buy a lottery ticket.

AEP is by far the better managed company. Look at their respective long term value creation. It's not because the share price is too low that the value isn't being created.

Besides, their stock price return is very similar as companies as MP Evans and Sipef.
The frustrating thing is that the value creation at AEP was superior to the other companies and that the share price doesn't reflect that.

[nobull] 17/1/2023 15:47

"Looked at on fundamentals AEP is in every way a superior company."

What? Ugh um... I beg to differ. AEP is being punished for its failure to use its cash profitably. The derisory dividends are fine if they use the cash mountain to grow the business, but they don't.

MPE probably has a better production volume growth profile (no, I haven't studied the AEP one, but generally markets don't get this sort of thing wrong, I wonder?). I get it that AEP are a bargain, but only if they do all the right things to out the value, but they are not. Until the BoD pull their finger out, they are fairly valued. AIMO.

BTW, I think the best are REA ords. Go figure out what their net debt will be in 18 months' time, and how the expected net debt reduction compares with the market cap of their ords. No, don't tell me the net debt reduction is all going to be added to the market cap of the prefs, or that the enterprise value is going to go through the floor due to a palm oil price crash (the latter is outside my competence to predict). I get it that REA has a terrible production volume growth profile but that's not the point. Yes, spare cash first goes to debt reduction, then maintenance capex and finally, in the far distant future, in the case of REA, to fixing the horrible production volume growth profile. REA has a better short term share price outlook, but is higher risk, so not to everyone's liking. For the self flagellaters, AEP is wonderful. Ow.

[tigerbythetail] 17/1/2023 11:58

Solid trading update out from direct peer Malaysian / Indonesian palm oil producer MPE (M.P. Evans) yesterday.
Question: has anybody ever tried writing to the senior NED of AEP to ask the company to address the extremely low rating of these shares? MPE report far more clearly and completely, they emphasise their long record of paying meaningful and increasing dividends, and they engage in share buybacks. The result is that their shares are rated, well, not highly (it's palm oil!), but at least reasonably.
Looked at on fundamentals AEP is in every way a superior company. But the share price is held back by poor reporting, derisory dividends, and no share buy-backs. Despite the company being debt free and having a huge cash pile and an EV of under £100m!
All in all, this is a crazy situation. At this share price, this company could and should pay 10%+ dividends every year...

[tigerbythetail] 03/12/2022 16:56

FWIW, I agree with Stemis. I knock 15% off the value of the cash pile because of this consideration.
Yes, that makes AEP's numbers look a little bit less absurdly attractive. But they are still highly appealing when compared to a direct peer like MP Evans (MPE).
The only real explanations for the price here are the lack of a meaningful dividend and the lack of clear communication from the board. Hopefully, that will change with the new regime, but we will see.

[stemis] 02/12/2022 19:17

I'm afraid the evidence, such as it is, would strongly suggest the contrary. On page 137 of the Report and Accounts - www.angloeastern.co.uk/~/media/Files/A/Anglo-Eastern/reports-and-documents/Annual%20report%202021.pdf - are analysed the P&Ls and Balance Sheets of subsidiaries with material non controlling interests. There you'll see that they dividend very little of their profits

PT Tasik Raja - 2021 0.6% of profit, 2020 - 0.2% of profit
PT Alno Agro - 2021 0.8% of profit, 2020 - 0.4% of profit
PT Sawit Graha Manunggal - 2021 Nil, 2020 - Nil

Page 139 sets out the balance sheet of the PLC company. It holds only $1,599,000 of the Group cash of $218,249,000, although it's possible there may be cash in wholly owned intermediate holding companies within the Group.

My belief though is that the overwhelming majority of cash is held in the operating (and not always wholly owned) subsidiaries and therefore a chunk of it, maybe 15 - 20% isn't owned by shareholders of the plc.

[gaiusgracchus] 02/12/2022 17:16

Because the cash owed to minorities would be dividended to them regularly over time while most of the balance sheet cash has been accumulated over time, over many years. So some of the cash generated this year may still be owed to minorities but it will be a small portion of it. Essentially the minorities are not going to let cash due to them just sit on AEP's balance sheet year after year. This is my conjecture. If anyone has a better idea then by all meabs speak.

[stemis] 02/12/2022 13:01

Correct me if I'm wrong but I shouldn't think the minorities have any claim to the cash on AEP's balance sheet(?). The large minority interest is a claim on a portion of the fixed assets and working capital.

Why do you believe that?

[foxfox79] 30/11/2022 15:28

is this even possible, to smoke out the small holders with a low bid?

[gaiusgracchus] 29/11/2022 08:18

Correct me if I'm wrong but I shouldn't think the minorities have any claim to the cash on AEP's balance sheet(?). The large minority interest is a claim on a portion of the fixed assets and working capital. I hope so...And if that's the case by the end of the year they will be trading on a trailing EV/EBIT multiple of 1x. Sure, palm oil prices have come off their highs but still, this is super cheap.Which begs the question, are we as minority shareholders going to get screwed? Is asking the question also answering it?

[skanjete2] 12/11/2022 08:20

4,75% on 250mUS$ produces 12mUS$ intrest a year, or 26p/share

[34adsaddsa] 11/11/2022 10:56

Indonesian base rate up to 4.75%.

[tigerbythetail] 03/11/2022 10:05

Looking at the book, I have the impression we have a sizeable seller willing to accept 780p to 800p for their shares. Given volume is low on this share, and the company do not seem to care about the share price much, this process could last for some time.
As always with such shares, once the seller is done, the price will magically rise 30% or more. Patience, or good timing, is all.

[tigerbythetail] 02/11/2022 13:19

I'm hoping that this excessive caution is the legacy of major shareholder the late Mrs. Lim, and that we will now get a more modern approach to running the business.
The stress test that the company imposed on itself was absurd - they hold enough cash to withstand five years of a 50% drop in average production combined with a 50% drop in average prices! Hopefully, we now get a more sensible approach to paying dividends and general financial management and corporate communication.
We will see...

[foxfox79] 02/11/2022 12:27

It almost as if they do this on purpose.. to accumulate themselves cheaply in preparation of buyout?

[tigerbythetail] 02/11/2022 11:35

Cash increase affected by dollar / rupiah exchange rate - the cash is held in Indonesian rupiah, but the rupiah has devalued against the rampant US dollar (just as much most other currencies). Assuming the dollar falls back towards long term averages in due course, then the USD value of the cash pile will increase accordingly.
As Visitor noted on the other board, the "stockpile adjusted EV" for this company is something like £70m. Which is deeply crazy when compared to the more "normal" valuation that the market places on rival palm oil producer MPE.
I agree that the Trading Update is written poorly. This company badly needs to pay a reasonable dividend, perhaps to introduce share buybacks as well, and to improve its PR. But I guess its failings in those departments are what has led to the current misprice.

[foxfox79] 02/11/2022 11:20

Cash increase seems minimal, further increase stocks? as usual , the TU is rather pessimistic...

[tigerbythetail] 02/11/2022 11:05

Trading statement out. Confirms that AEP is simply an amazing bargain at these prices. If the BoD were to announce even a "normal" dividend (let alone the "special" that they could pay out given the huge and growing cash pile) then I believe the share price would double or even triple.

[ilad60] 02/11/2022 09:36

Trading update Q3

[skanjete2] 28/9/2022 11:53

CPO is quoted on the world market in USD and then translated into local Rupiah.
So sales are USD, costs are mainly Rupiah. The USDIDR evolution is indeed positive.

Cash is held in Rupiah, but in relation to the share price, you have to consider GBPIDR, not USDIDR :

[ilad60] 28/9/2022 11:21

AEP is selling in Indonesian Rupee, not in USD



Short-term investments are Rupiah fixed deposits with more than 3 months tenure
Cash and cash equivalents are also in Rupiah

[foxfox79] 26/9/2022 09:08

Amazing value here, usd/gbp now at 0.94 ..... so we're almost trading at EV of 0