REG-R.E.A. Holdings plc R.E.A. Holdings plc: Trading update

R E A HoldingsAnnouncement

02/08/2023 07:15

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   R.E.A. Holdings plc (RE.)
   R.E.A. Holdings plc: Trading update

   02-Aug-2023 / 07:00 GMT/BST

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   R.E.A. Holdings plc (“REA” or the “company”) - Trading update

    

   In advance of publication in September of the company’s half yearly report
   to 30 June 2023, REA announces the following trading update for the 6
   months to 30 June 2023 (with comparative figures for 2022):

    

                                                2023    2022
   Fresh Fruit Bunch (“FFB”) crops (tonnes):                
   Group harvested                           346,216 321,993
   Third party harvested                      98,413 126,893
   Total                                     444,629 448,886
                                                            
   Production (tonnes):                                     
   Total FFB processed                       411,255 428,608
   FFB sold                                   32,345  14,445
   CPO                                        90,167  96,299
   Palm kernels                               20,300  20,578
   CPKO                                        8,331   7,970
                                                            
   Extraction rates (percentage):                           
   CPO                                          21.9    22.5
   Palm kernel                                   4.9     4.8
   CPKO*                                        39.6    39.5
                                                            
   Rainfall (mm):                                           
   Average across the estates                  1,924   2,012

    

   *Based on kernels processed

    

   Opening the year at $1,090 per tonne, CIF Rotterdam, CPO prices weakened
   progressively through the first 6 months of the year to a low of $855 per
   tonne in early June 2023. With growth in global production of CPO expected
   to remain generally slower than in the past, dry crops in North America
   affecting soybean and canola crops and the Russian / Ukrainian situation
   likely to constrain sunflower seed exports, the immediate outlook for CPO
   prices appears positive. Since the low point in June, the CPO price has
   rallied and currently stands at $960 per tonne.

    

   The average selling price for the group’s CPO for the six months to the
   end of June 2023, including premia for certified oil, net of export duty
   and levy, adjusted to FOB Samarinda, was $746 per tonne (2022: $971 per
   tonne). The average selling price for the group’s CPKO, on the same basis,
   was $875 per tonne (2022: $1,712 per tonne).

    

   The combination of static production volumes in the first half of 2023 and
   lower selling prices compared with 2022 will mean that revenues for the
   six months to 30 June 2023 will be significantly lower than in the
   comparable period of 2022.

    

   The outlook for the second half of 2023 is more positive. The average net
   selling price for the group’s CPO for the second half of 2022 was $703 per
   tonne as compared with a current net local market price of $740 per tonne.
   Accordingly, if the current price is maintained, revenue for the second
   half of 2023 may reasonably be expected to exceed that of the second half
   of 2022. It is likely that, as is normal, FFB crops will be weighted to
   the second half.

    

   The recent weakness of coal prices and the necessary costs incurred to
   commence production of stone and sand has delayed the expected recovery of
   loans made by the company to the group’s stone and coal interests. The
   logistical problems related to the opening of the stone quarry have,
   however, been resolved and progress is again being made towards initiating
   stone production and sales.

    

   The fall in coal prices, if sustained, may make more difficult the planned
   refinancing of loans to the stone and coal interests which, when combined
   with the expected delay to normal recoveries of those loans, will reduce
   the cash available to the group. Accordingly, the directors will keep
   under review their intention to pay in December 2023 the remaining arrears
   of preference dividend (currently amounting to 7p per share) when the
   semi-annual dividend arising on 31 December 2023 is paid.

    

   In line with the timetable adopted in previous years, the company’s half
   yearly report for 2023 will be published in late September 2023.

    

   Enquiries:

   R.E.A Holdings plc

   Tel: 020 7436 7877

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   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.

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   ISIN:          GB0002349065
   Category Code: TST
   TIDM:          RE.
   LEI Code:      213800YXL94R94RYG150
   Sequence No.:  261677
   EQS News ID:   1693553


    
   End of Announcement EQS News Service

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