AEP Plantations (LON: AEP) said crude palm oil output rose 17.9% in the nine months to the 30th of September. The grower, which runs oil palm plantations in Indonesia and Malaysia, set out the figures in a trading statement at 7am today.
Production of its own fresh fruit bunches (FFB, the harvested palm fruit) rose 13.3% to 924.5k tonnes from 816.2k a year earlier, helped by stronger output in Kalimantan and at newly acquired Pinago in South Sumatra. Crude palm oil reached 379.2k tonnes from 321.6k, with South Sumatra and Bengkulu also contributing.
Volume, not price, did the work. The average crude palm oil price at the mill gate was unchanged at $855 a tonne, while the oil extraction rate, the oil yield per tonne of fruit, edged up to 20.1% from 19.7%, a rise of 0.4 percentage points.
Growth was bought as well as grown. External FFB purchases rose 24.2% to 1,097.8k tonnes from 883.6k, and the company spent $160.2m acquiring Pinago.
Marcus Chan Jau Chwen, the company’s Executive Director (Corporate Affairs), attributed the growth to better operational performance and larger purchases of external fruit. He said those results and a healthy cash position underpin confidence in meeting full-year market expectations.
The acquisitions came at a cost. Net cash fell $133.3m to $99.0m from $232.3m at the 31st of December, after $168.6m of acquisition spending, including $8.4m for Admiral Potential Sdn Bhd and PT Jaya Jadi Utama, and $33.2m returned to shareholders through $16.8m of dividends and $16.4m of buybacks.
The interim dividend is held at 3.73 cents a share, matching last year’s figure adjusted for the 10-for-1 share split. It is paid on the 11th of December to holders on the register on the 6th of November.
For the fourth quarter, the company expects crude palm oil prices to stay supported by food demand, firm energy markets and Indonesia’s B50 biodiesel rollout, its 50% palm blending mandate. The ninth mill, at KAP Estate in Kalimantan, is targeted for commissioning in early January 2027.
The board said it remains confident of full-year results in line with market expectations. It also flagged that El Niño dry weather may affect FFB yields in 2027, which it said, if yields are hit, would likely support crude palm oil prices.
