Anglo-eastern Plantations Share Discussion Threads

[ntv] 19/3/2024 09:19

Interesting to note that the following from MPE results today
As reported above, CPO prices were relatively stable during 2023, with the Group achieving an average mill-gate price of US$729 per tonne. This price stability has continued into the early part of 2024, with some price strengthening as the period continued. In early March, the Group has achieved some tender prices of a little over US$800 per tonne.

[34adsaddsa] 14/3/2024 14:34

This company doesn't trade on fundamentals because they don't distribute the cash to shareholders. They need to 3x the dividend.

I doubt there's much interest from UK investors for palm oil companies and non-UK investors aren't interested in UK stocks.

[ntv] 14/3/2024 08:39

Price of CPO has been climbing steeply recently
Not had any effect here or MPE which seems rather strange

[foxfox79] 09/3/2024 09:47

Yes, but is profitability of this company great i wonder? First 6 mobths they earned 21 M net profit, 2 half will be somewhat better maybe 25M. Considering the historically high cpo prices profitabilty doesnt seem that high.. what am i missing why would this company then be worth 3 x current marjet cap?

[skanjete2] 07/3/2024 16:24

CPO is above 1000US$/ton again, at the highest price since july last year.

And all cash flow accrues to AEP shareholders now...

[34adsaddsa] 05/3/2024 15:33

Not that it matters to the share price, but in case anyone is interested:

"(Bloomberg) -- Stagnating production and dwindling stockpiles will underpin palm oil prices relative to other edible oils in the near term, according to veteran trader Dorab Mistry.

Production in top grower Indonesia may fall by at least a million tons in 2024, while Malaysian output could remain flat, said Mistry, a director at Godrej International Ltd. The trend is likely to last at least five years, as the industry contends with aging trees, erratic weather and little improvement in farming practices, he said in an interview.

“I think you have to be reasonably bullish on all oils, but particularly palm,” due to output constraints, he said on the sidelines of the Palm & Lauric Oils Price Outlook Conference in Kuala Lumpur. While production of other oilseeds is set to climb this year, “palm is unfortunately the laggard,” he said.

Read More: Palm Oil Reserves in Malaysia Fell Almost 5% in February: Survey

These supply problems are upsetting the hefty discount palm typically has to alternative oils. The tropical oil is trading at a premium to soybean oil and sunflower oil in some markets, an unusual phenomenon that’s set to continue until around October when palm production seasonally peaks, said Mistry, who has traded vegetable oils for decades.

Benchmark palm oil futures have risen about 6% this year and traded at 3,942 ringgit ($834) a ton on Tuesday in Kuala Lumpur.

Unpredictable weather is also a major wildcard for crop markets. Benign conditions have generally favored recent harvests and helped send a gauge of grain and oilseed prices to the lowest level in more than three years. But that may not last.

“We dodged bullets in several parts of the world” last year, Mistry said. “We have got to be on our guard.”

[skanjete2] 12/2/2024 10:33

The current CPO prices around 950US$ are in my opinion optimal in the long term :
- very profitable
- don't attract windfall taxes or exagerated export taxes
- don't attract too much plantation expansion (already curbed in any case)
- don't force the vegetable oil market to consider alternatives

[skanjete2] 07/2/2024 07:50

I'm counting on a dividend of 50cents this year.

[34adsaddsa] 06/2/2024 20:19

Their cash is overwhelming in Rupiah.

I'm assuming the dividend will be flat (40 cents) until told otherwise.

I'm sure shareholders are still pressing them to increase distributions.

[beresford99] 06/2/2024 18:09

Good point,if their cash is all in US$, they should be worried. About 8T of US debt will have to be refinanced this year, as the US is effectively bankrupt,the $ could easily fall 10-15% if they have trouble rolling over.
Any idea what the dividend could be this year ?, I hope the interim is now a permanent feature, I always reinvest the dividends.

[34adsaddsa] 06/2/2024 13:51

When the market has confidence that they won't just sit on hundreds of millions of dollars in cash. They've made a good dent with the buyout of minority interests and increasing the dividend but it's not enough.

[tigerbythetail] 02/2/2024 17:35

RNS out - biogas plant completion.
When will the market notice this company and value it properly?

[34adsaddsa] 27/1/2024 14:00

If it were a company with a diversified shareholder base then I would agree with a tender offer, but it isn't.

A delisting would be a catastrophe and I'm not interested in any route which makes that a possibility.

Do you think the market value would be under £200M after the special dividend of $100M? With a doubled ordinary dividend the yield would be getting on for 13%. The shares simply wouldn't be at that valuation.

[skanjete2] 27/1/2024 12:38

Dividends are terribly tax inefficient and don't solve the valuation problem... bad idea

[34adsaddsa] 27/1/2024 09:22

No. Almost everyone would try to participate in the tender so people wouldn't get that much of their shares accepted and ownership would be further concentrated in the hands of the heirs of Madam Kim.

People pushing for buybacks/tenders are making a mistake. A big special dividend and a doubled ordinary dividend hugely reduces the excess cash problem, leaves us less at the mercy of the share price valuation and doesn't cause delisting risk.

[skanjete2] 27/1/2024 08:25

Or better yet : they should organise a tender offer for $100m at say 14£/share.

This would be a win-win for every one.

In one swoop they would :
- have a reasonable valuation in line with the other plantations
- a liquidity event for shareholders willing to sell
- at an attractive valuation for shareholders willing to stay
- a more efficient balance sheet

[34adsaddsa] 27/1/2024 04:04

In the last six months, they've spent $85M on buying out minority interests. That's a lot of cash. They should pay a $100M special dividend and double the current dividend to 80 cents. That would instantly fix the share price problem.

[beresford99] 24/1/2024 21:14

I’m not really surprised at Anglo’s lacklustre performance, most of the Indo planters have performed poorly compared to their Malaysian counterparts.The CPO price has started 2024 quite positively and I’m sure the Indo planters will play catch up over the next few months. I know the Indonesian Govt interference is detrimental but on the other hand labour costs are less than in Malaysia, which is positive.
It’s extraordinary how just a few thousand share traded can move the price by 1-2%, this share along with MPE should seek a listing in Singapore(London is not the place)
Think what would happen if daily turnover was 70-80,000+ a day. The huge cash pile should be put to work, why not diversify geographically and buy some land in Malaysia.
Many Malaysian plantations have holdings in Indonesia, it can work both ways and also spread the risk.

[skanjete2] 09/1/2024 07:36

I'm confident that this situation will sort itself out in de the coming 24 months.

This company seems asleep, but a lot is going on behind the curtains :
- loss making plantations in South Sumatera sold
- intercompany loans between subsidiaries sorted out
- minorities bought out
- differentiation of cash pile to more dollar exposure
- shareholder orientation improved : attractive dividend, set to increase
- management succession plans initiated
- buy back for future management incentives

Only disappointment last year was a major expansion investment that failed to materialise.

Things to be realised this year :
- sale of Malaysia plantation
- management succession formalisation
- higher dividend
- rationalisation of cash pile
- replacement investments
- expansion investment?

But the main reason for an investment in this company is that cash will keep flowing in at a high rate.
In the last 10 years, expansion of plantation acreage in Indonesia is very tough and almost non existant. In Malaysia, production has topped and is falling back.

Demand for oil will keep rising at 3% a year, but production can't follow.
So we're in for an extended period of high palm oil prices, even taking into account the Indonesian export taxes.

At this low share price, this seems to me a low risk/high potential situation. In the meantime we're being nicely paid for waiting by the attractive dividend.

[wjccghcc] 08/1/2024 23:34

51% overseas shareholder with chequered history and passing of the baton to the younger generation who may not respect minority shareholder rights as much as Madame Lin. Given the record of delistings of other companies with an overseas majority shareholder it is not surprising it gets a low rating. You're depending on the Nokia Bell Pension Fund to stand up for you.

[e43] 08/1/2024 23:19

Tiger,agree,a backwater within a backwater.
I would never have believed after 40+ years investing ,how the London market has gone so quiet ,really v little reason to have a listing on the LSE for businesses like AEP.
Holding the faith but not my breath that value will out in the end.

[tigerbythetail] 08/1/2024 13:24

Can anybody offer a compelling explanation for the seemingly absurdly low valuation of this company?

Mcap - £271m. No debts. Cash of $226m at last trading update = £177m. EV: £94m.

6 month profits at interims of £32m. Annualised = £64m.

Price of palm oil more or less stable at MYR 3,700/t. This is well below the Ukraine war influenced peaks of 2022 but well above long run averages.

I get there can be some quibbles about some of the cash pile being held in subsidiaries where there are (or were) minority interests, so we should perhaps make an adjustment for that. And, also, some more cash recently went out to buy out these minorities (an excellent investment, IMO). But, big picture, the current price makes no sense to me. especially when sector peer and fellow London-listed palm oil producer MPE is valued completely differently.

Yes, in the days of Madame Lin, things were a bit eccentric here. But times have changed. The company now pays a reasonable dividend - 40p this year = a yield of 6% or so. And it has a small share buyback in operation.

I've never believed in the efficient markets hypothesis. IMO, markets are irrational and bipolar - prone to fits of black depression and rushes of euphoria. But, even given that, WHAT THE HECK IS GOING ON HERE?!?

[skanjete2] 05/12/2023 07:58

TBTT, that's indeed a more realistic scenario...

[tigerbythetail] 04/12/2023 16:48

I suspect something quite different - that the company is being "cleaned up" ahead of a sale. Hence the buy-outs of the minorities in the profitable plantations, the improvements in dividends, and the disposal of unprofitable plantations.
Given the majority shareholder will want a good price for their prize asset as much as we all want a good price that's OK with me.