R.E.A. Holdings plc (RE.) R.E.A. Holdings plc: AGM Statement
08-Jun-2023 / 07:00 GMT/BST
-----------------------------------------------------------------------------------------------------------------------
R.E.A. Holdings plc ("REA" or the "company")
AGM statement
The company will hold its AGM at 10 a.m. today when the chairman
will give the following statement to shareholders.
Agricultural operations
Key agricultural statistics for the period 1 January to 31 May
2023 (with comparative figures for 2022) were as follows:
2023 2022
Fresh Fruit Bunch ("FFB") crops (tonnes):
Group harvested 282,930 252,854
Third party harvested 77,579 98,698
Total 360,509 351,552
Production (tonnes):
Total FFB processed 331,348 338,964
FFB sold 29,169 10,424
CPO 72,792 76,008
Palm kernels 16,313 16,211
CPKO 6,777 6,015
Extraction rates (percentage):
CPO 22.0 22.4
Palm kernel 4.9 4.8
CPKO* 39.8 39.4
Rainfall (mm):
Average across the estates 1,630 1,848
*Based on kernels processed
Group FFB for the period was slightly ahead of budget and some
12 per cent higher than the corresponding period in 2022.
Competition from other mills offering enhanced payment terms for
externally sourced FFB resulted in some reduction in purchases of
third-party fruit during the initial months of the year but,
following an adjustment to the group's purchase prices, purchase
levels have returned to normal.
The above average number of declared rain days (being days on
which normal harvesting had to be cancelled) impacted harvesting
efficiency, upkeep and evacuation during much of the period and
contributed to the slight fall in the CPO extraction rate as
compared with 2022.
Work continues on improving operational infrastructure and
harvesting efficiencies.
Replanting and extension planting are proceeding in line with
previously announced programmes.
Prices
Opening the year at USD1,090 per tonne, CIF Rotterdam, prices
have since weakened, but may well rebound as production growth is
expected to remain slow and consumption continues to increase. The
price currently stands at USD865 per tonne.
The average price realised from sales of CPO by the group during
the period January to May 2023, including premia for certified oil
but net of export levy and duty, adjusted to FOB Samarinda, was
USD766 (average for the year 2022: USD821).
As has been noted previously, the group understands that the
premia it receives for selling CPO that is sustainable can be
increased by selling segregated sustainable oil. The group is
exploring opportunities for reorganising the processing of its
fruit so as to process only sustainable FFB in one mill and then to
segregate the delivery of CPO from this mill allowing for sales at
enhanced premia.
Stone and coal interests
The rate of mining at the coal concession holding company, PT
Indo Pancadasa Agrotama ("IPA"), to which the group has made loans,
slowed to an average of 22,000 tonnes per month for the first five
months of 2023, as IPA switched its main mining focus to its
northern pit. By blending northern and southern pit coal, IPA has
been able to arrange that all of its coal production continues to
fall within the specifications for semi-soft coking coal. Drilling
has confirmed the availability of a further area within the IPA
concession of economically minable coal similar in quality to the
southern pit coal. It is planned to open a third pit to mine this
additional coal as the southern pit becomes fully mined out.
Arrangements to permit exploitation of the quartz sand in the
overburden overlaying IPA's coal are being progressed. Agreement in
principle has been reached with IPA's coal mining contractor to
extend the latter's current coal mining contract with IPA to cover
the mining of quartz sand on terms similar to those applicable to
the contractor's mining of IPA coal. Commencement of sand recovery
operations remains dependent upon the issue of the necessary
environmental licence by the Indonesian authorities.
Wet weather has delayed mobilisation in preparation for opening
the quarry at the andesite stone concession held by PT Aragon
Tambang Pratama ("ATP"), to which the group has also made loans. Of
the two crushers that have been purchased by ATP, one is now in
situ but deep mud on the road into the quarry (following weeks of
rain) has delayed delivery of the second, although recent drier
weather should shortly bring an end to the delay. Quarrying is now
expected to commence during the second half of the year, with stone
production initially being used to upgrade access to the
quarry.
Prices for both thermal and coking coal have weakened
considerably in recent weeks. IPA aims to offset the impact of this
by gradually increasing production over the remainder of the year.
Nevertheless, it is likely that the lower prices, coupled with the
need to fund the opening of the ATP quarry and the commencement of
tax payments following full utilisation of brought forward tax
losses, will mean that net loan repayments to the group by IPA and
ATP will be much lower in 2023 than they were in 2022.
Finance
Good progress is being made in the group's negotiations with its
Indonesian banker, PT Bank Mandiri Tbk ("Bank Mandiri") for a
development loan to fund a proportion of the extension planting
costs at the group's newest estate, PT Praesetia Utama ("PU").
Negotiations have been assisted by the recent renewal for a further
25 years of two of the group's HGU land titles which form part of
the security for the bank's existing loans to the group.
In addition, IPA and ATP are exploring options for refinancing a
portion of their existing loans from the group.
Results and dividends
Results for the group for the first half of 2023 will reflect
the lower selling price for CPO by comparison with 2022. In
addition, it is likely that the results will include a significant
exchange loss arising from the strengthening of the Indonesian
rupiah against the US dollar with the rupiah currently standing at
Rp14,888=USD1 against Rp15,731=USD1 at the beginning of the
year.
As previously announced, the semi-annual preference dividend of
4.5p per share falling due on 30 June 2023 in respect of the half
year ending on that date will be paid on 30 June 2023. The
directors continue to expect that the semi-annual dividends on the
preference shares arising on 31 December 2023 and in 2024 will be
paid as they fall due.
The directors stated in the annual report published on 19 April
2023 that, provided that operational performance and cash flows
continued at satisfactory levels, they would aim to eliminate the
arrears of preference dividend (7p per share) by the end of 2023.
The recent fall in CPO and coal prices, if sustained, will mean
that results and cash flows are likely to be lower than was
expected on 19 April 2023. Nevertheless, provided that there is no
further deterioration and the financing initiatives noted above
provide the additional funding that the directors anticipate, the
directors still expect that payment of the arrears of preference
dividend can be made in conjunction with the semi-annual dividend
arising on 31 December 2023.
Outlook
Looking towards the second half of the year, agricultural
production should, as is normal, be higher than in the first half
and should see further benefits from ongoing investments to improve
operating efficiencies in field operations. Whilst the results for
the year will be dependent upon CPO prices achieved over the rest
of the year, falling levels of fertiliser prices will assist the
group in offsetting other inflationary impacts on costs.
Looking forward to 2024 and beyond, mining of the remaining coal
reserves at IPA can be expected to augment group cash flow for two
more years while commencement of quartz sand production at IPA and
stone production at ATP have the potential to provide material and
stable additional cash flows to the group for many years to
come.
Enquiries: R.E.A Holdings plc Tel: 020 7436 7877
-----------------------------------------------------------------------------------------------------------------------
Dissemination of a Regulatory Announcement that contains inside
information in accordance with the Market Abuse Regulation (MAR),
transmitted by EQS Group. The issuer is solely responsible for the
content of this announcement.
-----------------------------------------------------------------------------------------------------------------------
ISIN: GB0002349065
Category Code: AGM
TIDM: RE.
LEI Code: 213800YXL94R94RYG150
Sequence No.: 249325
EQS News ID: 1652051
End of Announcement EQS News Service
=------------------------------------------------------------------------------------
Image link:
https://eqs-cockpit.com/cgi-bin/fncls.ssp?fn=show_t_gif&application_id=1652051&application_name=news
(END) Dow Jones Newswires
June 08, 2023 02:00 ET (06:00 GMT)
Grafico Azioni R.e.a (LSE:RE.)
Storico
Da Apr 2024 a Mag 2024
Grafico Azioni R.e.a (LSE:RE.)
Storico
Da Mag 2023 a Mag 2024