REG-R.E.A. Holdings plc R.E.A. Holdings plc: Trading update
19/02/2026 07:02
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R.E.A. Holdings plc (RE)
R.E.A. Holdings plc: Trading update
19-Feb-2026 / 07:00 GMT/BST
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R.E.A. Holdings plc (“REA” or the “company”) – Trading update
REA, whose principal business is the cultivation of oil palms in the
province of East Kalimantan in Indonesia and the production and sale of
CPO and CPKO, is pleased to announce a trading update for the year ended
31 December 2025.
All terms in this announcement are listed on the group’s website at:
1 www.rea.co.uk/about/glossary.
Agricultural operations
Key agricultural statistics for the year to 31 December 2025 (with
comparative figures for 2024) were as follows:
2025 2024
Fresh Fruit Bunch (FFB) crops (tonnes)
Continuing group (excluding CDM):
Group harvested 620,508 636,826
Third party harvested 231,277 205,689
Total 851,785 842,515
CDM (2025 – 4 months)
Group harvested 6,189 40,709
Third party harvested 5,446 9,892
Total 11,635 50,601
Production (tonnes)
Total FFB processed 856,732 857,575
FFB sold 7,980 34,192
CPO 189,215 190,235
Palm kernels 43,798 44,286
CPKO 17,461 18,086
Extraction rates (percentage)
CPO 22.1 22.2
Palm kernel 5.1 5.2
CPKO* 40.1 40.6
Rainfall (mm)
Average across the estates 3,885 2,707
*Based on kernels processed
Group FFB production for 2025 reflected the reduction in mature hectarage
by some 4,800 hectares due to the continuing replanting programme as well
as the sale in the first half of the year of the outlying subsidiary
company, CDM. Additionally, cropping was affected by very high rainfall
for the year overall, some 44 per cent higher than in 2024 and some 23 per
cent above the 10 year historic average. Climatic factors delayed ripening
which meant that the typical weighting of crops to the second half of the
year did not occur and the peak crop usually experienced in the final
quarter did not materialise.
Despite these challenges, extraction rates remained consistent and oil
processing losses remained comfortably below industry standards.
Replanting and extension planting also continued on schedule during 2025
with totals approaching, respectively, 1,500 and 1,000 hectares nearing
completion by the end of the year.
Agricultural selling prices
Firmer selling prices were sustained throughout 2025 and served to offset
the impact of lower production.
CPO, CIF Rotterdam, remained consistently above $1,000 per tonne, trading
between a high of $1,365 and low of $1,060 per tonne. CPKO, CIF Rotterdam,
traded between $2,150 and $1,540 per tonne. The CIF Rotterdam prices
currently stand at $1,360 per tonne for CPO and $1,990 for CPKO.
As previously explained, the Indonesian government applies duties and
tariffs on exports of CPO and CPKO. The applicable tariffs, which are
adjusted from time to time, are published on the group’s website at:
2 www.rea.co.uk/investors/cpo-export-tariffs. The group sells CPO into
the local Indonesian market which is not subject to export levy or export
duty. However, arbitrage between the Indonesian and international CPO
markets normally results in a local price that is broadly in line with
prevailing international prices after adjustment of the latter for
delivery costs and export tariffs and restrictions.
The average price realised from sales of CPO in 2025, including premia for
oil with certified sustainability credentials but net of export levy and
duty, adjusted to FOB Samarinda, was $853 per tonne (2024: $819 per
tonne). The average selling price for the group’s CPKO, on the same basis,
was $1,629 per tonne (2024: $1,094 per tonne).
Local prices for CPO and CPKO, FOB Belawan/Dumai, currently stand at,
respectively, $837 and $1,729 per tonne.
Sustainability and climate
Each year the group participates in the SPOTT assessment by the Zoological
Society of London which assesses palm oil producers, processors and
traders on their disclosures regarding their organisation, policies and
practices with respect to ESG matters to incentivise best practices. In
the 2025 assessment, published in November, REA’s score increased to 97.1
per cent (2024: 91.5 per cent), ranking the group second out of the 100
palm oil companies assessed.
Projects to promote sustainable palm oil production, forest protection,
climate action and empowering local livelihoods continued throughout the
year. Following the sale of CDM, the group achieved 100 per cent RSPO
certification of its own plantations in 2025. Additionally, the group has
worked closely with its smallholder suppliers to increase the certified
component of the group’s supply chain.
Indonesian government compliance review and expenditure on titles
As has been widely reported, during 2025 the Indonesian government
initiated a review of regulatory compliance by the Indonesian oil palm
industry. Pursuant to this review, large Indonesian oil palm growers have
been subject to government inspections and, in cases where infringements
of regulations have been identified, fines are being levied and non
compliant plantings transferred to a new state owned oil palm company, PT
Agrinas Palma Nusantara (Persero).
From inception of its operations in East Kalimantan, REA has been
committed to acting responsibly and in compliance with Indonesian
regulatory requirements. The Indonesian government inspection of the
group’s operations, conducted as part of the above review, did not
identify any areas of non compliance within the group’s own oil palm
plantings. However, a small area of approximately 200 hectares of
plantings owned by a cooperative that is managed by the group was
identified as planted within an area zoned for forestry although earmarked
for conversion to agriculture. As a result, the group will not in future
receive fees (currently some $50,000 per annum) for managing these
plantings.
In addition, the inspection raised queries concerning some 3,200 hectares
of independent smallholder oil palm plantings in areas within the
proximity of the group’s current operations and a further 430 hectares of
oil palms developed as a smallholder cooperative (plasma) by a
neighbouring company. In both cases, these were areas over which the group
originally held provisional land allocations (izin lokasi) but had
relinquished such allocations some 30 years ago. Moreover, all the
plantings in the areas concerned have occurred subsequent to such
relinquishment and without involvement by the group. The group does not
therefore believe that it should have any liability in relation to the
areas in question.
So far as is known, there will be no further assessments of the group
pursuant to the Indonesian government's review of regulatory compliance by
oil palm growers.
In view of the obviously heightened focus on regulatory compliance in the
oil palm sector, the group concluded that it should proceed earlier than
originally planned with renewal of the land titles to some 16,332 hectares
of its land holdings which, unless renewed, are due to expire between 2028
and 2029. Concurrently, the group is also renewing or formalising other
key titles. The costs of renewal (comprising legal fees and direct renewal
charges), coupled with other titling expenditure, is expected to be in the
order of $10 million and will increase 2026 capital expenditure above the
level previously planned. Such increase will be offset to an extent by
postponement of other planned capital expenditure.
Stone and sand operations
Stone and sand operations continued to progress during 2025.
In the first half of the year scaling up of stone production at ATP was
hampered by the very high levels of rainfall which slowed development of
the necessary haul roads. With blasting having commenced in September, the
production potential steadily increased. Crushed stone production for the
year totalled some 187,000 tonnes of which some 104,000 tonnes were sold
and delivered to third parties, and the balance of 83,000 tonnes was
partially utilised in hardening ATP roads and partially sold to REA Kaltim
for road hardening.
As previously reported, the group has confirmed contracts for delivery of
in excess of 1 million tonnes of stone during 2026 and 2027 to
neighbouring coal mining companies. The Indonesian government has recently
indicated that it will significantly reduce 2026 coal production quotas
below the levels granted in 2025. The group does not expect that annual
quotas will be permanently reduced but, if the indicated reductions in
2026 quotas are confirmed, this may impact 2026 stone sales should the
group's stone customers elect to postpone part of their agreed 2026
offtake to 2027.
Following sample testing of the sand deposits at MCU, it was decided to
enhance the capabilities of the washing plant. The enhancements, which
include the addition of a magnetic separator to extract ferrite materials,
will improve the purity of the silica sand produced and thus optimise its
sales potential. The enhancement works are now expected to be completed
ahead of schedule before the end of the first quarter of 2026.
A number of parties have expressed interest in purchasing sand from MCU,
but such interest remains subject to provision of samples which can only
be provided once the enhanced washing plant is in operation. If the
expressed interest is confirmed as expected, MCU will be well placed to
move rapidly to full scale production.
The group now has direct management control of both ATP and MCU and, upon
finalisation of the requisite regulatory approvals, will hold 95 per cent
economic ownership of each company.
Finance
The semi-annual dividends arising on the preference shares in June and
December 2025 were paid on their respective due dates.
During 2025, the group successfully implemented a number of initiatives,
all of which have been previously reported, to improve its financial
position and extend the average maturity of its indebtedness. In
Indonesia, REA Kaltim's subsidiary, CDM, was sold while existing loans
from Bank Mandiri were repackaged to provided additional funding and an
extended maturity profile. In addition, the group secured a new term loan
from Bank Mandiri to fund a proportion of the costs of the extension
planting at PU.
In Europe, the outstanding £21.4 million nominal of sterling loan notes
issued by REAF were redeemed while the redemption date of the $27.0
million nominal of dollar notes was extended from June 2026 to December
2028. As respects the dollar note date extension, holders still have the
right to require the company to purchase or procure purchasers of their
notes at par on the original redemption date but noteholders holding $17.6
million nominal have agreed not to exercise that right.
These initiatives have been followed in the current year by an agreement
that Bank Mandiri will extend a further loan equivalent to some $20.5
million to assist funding of the continuing REA Kaltim replanting
programme. Subject to REA Kaltim's continued compliance with Bank Mandiri
covenants, this loan will be drawn over a three year period and repayable
by increasing instalments ending in 2040. Drawings in 2026 are projected
to amount to the equivalent of $7.0 million and will partially refund
repayments of group debt to Bank Mandiri, equivalent to $20.0 million,
falling due in 2026 as well as the possible repurchases of up to $9.4
million of dollar notes.
Outlook
The outlook for production and sales of both CPO and CPKO is positive.
Crops should steadily increase as FFB harvested from currently immature
areas begin to more than substitute for FFB lost in older areas taken out
of production for replanting. Extraction rates can be expected to improve
as an increasing proportion of the group’s crop is harvested from younger
areas where the oil content of the FFB should be higher than that of FFB
harvested from the group’s older areas. In the immediate term, prices are
expected to remain firm due to the continuing tight balance between supply
and demand witnessed in recent months.
In 2026, the group aims to continue its extension and replanting
programmes but with a slightly reduced extension planting programme of 700
hectares (scaled back from the 1,000 hectares originally planned) and a
maintained replanting programme of some 1,400 hectares. Other reductions
to previously planned 2026 capital expenditure to accommodate the
additional titling expenditure referred to earlier will be achieved by
deferring for one year purchases of capital equipment that are not time
critical and where deferral is unlikely to have any material effect on the
group's performance.
Whilst the group must continue to balance the need for significant
reductions in the group’s net debt against rewarding capital expenditure
on maintaining and enhancing the value of the group's assets, the
directors are confident that the continuing rejuvenation of the
agricultural operations, coupled with the benefits of scaling up the stone
and sand operations in 2026, will further strengthen the group's financial
position and improve shareholder value.
Publication of results
In line with the timetable adopted in previous years, the final results
for 2025 are due to be announced, and the annual report in respect of 2025
published, in the second half of April 2026.
Enquiries:
R.E.A. Holdings plc
Tel: 020 7436 7877
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Dissemination of a Regulatory Announcement that contains inside
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transmitted by 3 EQS Group.
The issuer is solely responsible for the content of this announcement.
View original content: 4 EQS News
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ISIN: GB0002349065
Category Code: TST
TIDM: RE
LEI Code: 213800YXL94R94RYG150
Sequence No.: 418530
EQS News ID: 2278298
End of Announcement EQS News Service
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