AEP Plantations (LSE:AEP), which owns and develops palm oil plantations across Indonesia and Malaysia, reported revenue up 8.3% to $249.7 million for the six months to 30 June, against $230.5 million a year earlier.
Profit before tax rose 5.1% to $65.8 million, including a $9.1 million non-recurring gain from the Pinago acquisition; stripping that out, underlying profit before tax fell 9%, reflecting a delayed cropping cycle in North Sumatra and replanting activity in Riau.
It completed the $158.3 million acquisition of Pinago in South Sumatra on 4 May, adding 14,300 hectares of mature plantation and lifting total planted area to 87,392 hectares.
Pinago contributed $18.3 million in revenue and $3.5 million in profit before tax over its two months of consolidation.
The average ex-mill crude palm oil price fell 1.2% to $853 per tonne, while palm kernel prices rose 7.4% to $793 per tonne.
Cash and cash equivalents stood at $109.5 million at period end, down from $244.7 million a year earlier, after the Pinago outlay, $14.6 million in capital expenditure and $9.1 million in share buybacks; bank borrowings reached $13.2 million following consolidation of Pinago's debt.
The company returned $25.9 million to shareholders through dividends and buybacks during the period and intends to declare an interim dividend by the end of the third quarter.
"We expect the production trend to improve in the second half of the year, and with CPO prices likely to remain elevated in the coming months, the Board is optimistic that the Group will deliver a robust performance," said Chairman Jonathan Law.
Construction of the company's ninth mill at KAP Estate remains on track for commissioning in December.
News Intelligence what this means for the company
AEP Plantations reported H1 2026 revenue up 8.3% to $249.7m and profit before tax up 5.1% to $65.8m, boosted by the $158.3m Pinago acquisition completed in May. However, stripping out a $9.1m non-recurring gain from the deal, underlying profit fell 9% due to delayed cropping in North Sumatra and replanting activity—a material headwind that the headline growth masks. The acquisition added 14,300 hectares and Pinago contributed $18.3m revenue and $3.5m profit over two months, but cash fell sharply from $244.7m to $109.5m after the outlay, leaving the group with modest liquidity relative to its $158.3m investment.
The Pinago deal expands AEP's asset base and production capacity, but underlying operational momentum is negative: stripping the acquisition gain, profit contracted 9% despite higher CPO prices, signalling operational stress in core estates. Management's optimism about H2 recovery and a ninth mill commissioning in December hinges on cropping normalisation; the interim dividend decision due by Q3 will signal confidence in cash generation post-acquisition.
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