AEP Plantations (AEP) H1 2024 earnings summary

Executive summary

• Revenue for H1 2024 was $166.7m, down 4% year-over-year; gross profit after BA movement rose 9% to $36.3m.

• Profit before tax after BA movement increased 8.6% to $35.3m; profit after tax up 15.8% to $27.9m.

• FFB production fell 5% to 494,900mt due to lower yields from old trees and replanting activities.

• Gross profit margin improved to 21.8% from 19.2% year-over-year, mainly due to lower fertiliser costs and higher biological asset values.

• Basic EPS from continuing operations was 70.58cts, up from 50.73cts in H1 2023.

Financial highlights

• Cash and cash equivalents at 30 June 2024 were $150.8m, down from $167.1m at 31 Dec 2023 and $261.3m at 30 June 2023.

• Net assets at 30 June 2024 were $519.7m, down from $530.7m at 31 Dec 2023, mainly due to a $32.3m currency translation loss.

• Operating cash flow for H1 2024 was $34.8m; capital expenditure was $12.0m; $30.0m allocated to investments.

• No outstanding bank loans; balance sheet remains strong.

Outlook and guidance

• Palm oil production expected to increase in H2 2024, but weaker demand from India and China may pressure CPO prices.

• Higher soybean yields in the US, Brazil, and Argentina could further weigh on CPO prices.

• Indonesia's B35 and upcoming B40 biodiesel mandates expected to support domestic CPO demand and prices.

• La Niña and extreme weather could reduce palm oil output, supporting prices.

• Satisfactory performance expected for the remainder of 2024 barring unforeseen events.