REG-R.E.A. Holdings plc R.E.A. Holdings plc: AGM Statement

R E A HoldingsAnnouncement

09/06/2022 07:15

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   R.E.A. Holdings plc (RE.)
   R.E.A. Holdings plc: AGM Statement

   09-Jun-2022 / 07:00 GMT/BST
   Dissemination of a Regulatory Announcement that contains inside
   information according to REGULATION (EU) No 596/2014 (MAR), transmitted by
   EQS Group.
   The issuer is solely responsible for the content of this announcement.

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    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 year to 31 May 2022 (with comparative
   figures for 2021) were as follows:

                                                2022    2021
   Fresh Fruit Bunch (“FFB”) crops (tonnes):                
   Group harvested                           252,854 307,140
   Third party harvested                      98,698  91,860
   Total                                     351,552 399,000
                                                            
   Production (tonnes):                                     
   Total FFB processed                       338,964 393,902
   CPO                                        76,008  87,295
   Palm kernels                               16,211  18,565
   CPKO                                        6,015   6,876
                                                            
   Extraction rates (percentage):                           
   CPO                                          22.4    22.2
   Palm kernel                                   4.8     4.7
   CPKO*                                        39.4    38.5
                                                            
   Rainfall (mm):                                           
   Average across the estates                  1,848   1,624

    

   *Based on kernels processed

    

   As noted in the 2021 annual report, published in April 2022, production in
   the first months of 2022 was impacted by high levels of rainfall hindering
   evacuation of FFB and delaying the group’s road upkeep programme. Average
   rainfall across the group’s estates was up by some 35 per cent in the
   first quarter of 2022 compared with the historic average of the last ten
   years.

    

   In recent days, weather conditions appear to have become more favourable
   and daily crop evacuation has shown an improvement. Moreover, the group
   has accelerated investment in its transport fleet with the purchase of
   substantial numbers of new tractors and trucks. This, combined with the
   programme progressively to build stone- based all-weather roads that is
   expected to commence later in 2022, should reduce the problem of crop
   evacuation during periods of heavy rainfall. Investment in further bunding
   of flood prone areas should also assist with crop evacuation as well as
   improving yields from such areas.

    

   Prices

    

   International CPO prices have continued to trade at unprecedented levels
   due principally to tighter availability of vegetable oils exacerbated by
   the war in the Ukraine. Domestic Indonesian CPO prices have increasingly
   diverged from international prices due to the incidence of export tariffs.
   Further divergence occurred when local prices dropped as a result of a
   temporary Indonesian government ban on exports of palm oil from 28 April
   to 23 May, such ban being designed to support the local availability of
   cooking oil at an affordable price. Nevertheless, domestic prices remained
   comfortably ahead of average prices recorded over the last ten years. With
   the export ban lifted, albeit that certain restrictions remain regarding
   domestic market obligations, local prices are expected to recover.

    

   Opening the year at $1,350 per tonne, CIF Rotterdam, prices peaked at
   $1,990 per tonne in early March and are currently standing at $1,710 per
   tonne. The average price realised from sales of CPO by the group during
   the period January to May 2022, including premia for certified oil but net
   of export levy and duty, adjusted to FOB Samarinda, was $1,027 (average
   for the year 2021: $777).

    

   As previously reported, the group sells CPO to Indonesian refineries under
   long term sales contracts. These are not affected by export restrictions
   but the prices achieved are based on prevailing domestic market prices for
   CPO and as such are indirectly affected by tariffs and restrictions on
   exports.

   Stone and coal interests

    

   The coal concession holding company, PT Indo Pancadasa Agrotama (“IPA”),
   to which the group has made loans, is continuing to mine coal at a rate of
   approximately 30,000 tonnes per month and has made five shipments to date
   at selling prices averaging $290 per tonne (delivered FOB vessel). Cash
   received by IPA is now principally being applied in the repayment of loans
   from the group. Provided that coal prices remain firm, the rapid
   extraction of coal at IPA encourages an expectation of significant near
   term recovery of the group’s coal loans.

    

   The stone concession holding company, PT Aragon Tambang Pratama (“ATP”),
   to which the group has also made loans, is close to finalising agreements
   with a contractor who will operate the quarry to supply stone to the
   group’s agricultural operations and for sale to a neighbouring coal
   company and other third parties. There is a substantial deposit of stone
   for which there should be good long term demand.

    

   Dividends

    

   As previously announced, the semi-annual preference dividend of 4.5p per
   share falling due on 30 June 2022 in respect of the half year ending on
   that date will be paid on 30 June 2022.

    

   It remains the directors’ intention to pay not less than 10p of the
   cumulative arrears of preference dividend (which currently amount to 17p
   per share) on or before 31 December 2022.

    

   Outlook

    

   With current CPO and coal prices, notwithstanding some inflation in costs,
   the group is enjoying good cash flows. These should be sufficient to meet
   the directors’ objectives of a progressive reduction in group indebtedness
   and other obligations and increased investment in necessary improvements
   to the existing operations and expansion of planted areas.

    

   Enquiries:

    

   R.E.A Holdings plc

   Tel: 020 7436 7877

    

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   ISIN:          GB0002349065
   Category Code: AGM
   TIDM:          RE.
   LEI Code:      213800YXL94R94RYG150
   Sequence No.:  167034
   EQS News ID:   1371421


    
   End of Announcement EQS News Service

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