AEP Plantations production and sales rise; maintains dividend
AEP Plantations PLC on Monday said it expects to meet full-year market expectations after reporting higher production for the first nine months of 2026, supported by stronger output and its recent acquisition of Pinago Plantations.
The London-based owner, operator and developer of sustainable oil palm plantations in Indonesia and Malaysia said own fresh fruit bunch production rose 13% to 924,500 tonnes in the nine months to September 30, from 816,200 tonnes a year earlier.
Crude palm oil production increased 18% to 379,200 tonnes from 321,600 tonnes, while palm kernel production rose 17% to 93,100 tonnes from 79,600 tonnes.
AEP Plantations said the increases were driven by higher output in South Sumatra, following the acquisition of Pinago, and Bengkulu.
Net cash after borrowings stood at USD99.0 million at September 30, down from USD232.3 million at the end of 2025. The decrease primarily reflected acquisition expenditure of USD160.2 million for Pinago and USD8.4 million for Admiral Potential Sdn Bhd and PT Jaya Jadi Utama. The group also returned USD33.2 million to shareholders through dividends and share buybacks.
The company declared an interim dividend of 3.73 US cents per share, unchanged from a year earlier on a comparable basis.
Looking ahead, AEP Plantations said El Nino conditions and prolonged dry weather could affect fresh fruit bunch yields in 2027. However, it expects crude palm oil prices to remain supported in the fourth quarter of 2026 by food demand, firm energy markets and Indonesia's B50 biodiesel rollout.
The company expects continued production recovery and contributions from Pinago to support full-year performance, adding that the board remains confident of meeting market expectations.
Executive Director Marcus Chan Jau Chwen said: "The group delivered strong production growth for the first nine months of 2026, driven by improved operational performance and higher volumes of external FFB purchased. These results, together with a healthy cash position, underpins the group's confidence in meeting full-year market expectations while continuing to deliver long-term shareholder value."
Shares in AEP Plantations were down 6.8% at 183.00 pence each in London on Monday morning. They are up 33% over the past year, however.
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