REG-R.E.A. Holdings plc R.E.A. Holdings plc: AGM Statement <Origin Href="QuoteRef">REAH.L</Origin>

R E A HoldingsAnnouncement

13/06/2017 10:15

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

   13-Jun-2017 / 10:15 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

   Agricultural operations

   Crops, production statistics and rainfall for the period from January to
   the end of May 2017 (with comparative figures for 2016) are set out below:

   ┌───────────────────────────────────────┬─────────────┬─────────────┐
   │                                       │ 5 months to │ 5 months to │
   ├───────────────────────────────────────┼─────────────┼─────────────┤
   │                                       │   May-17    │   May-16    │
   ├───────────────────────────────────────┼─────────────┼─────────────┤
   │ Crop (tonnes)                         │             │             │
   ├───────────────────────────────────────┼─────────────┼─────────────┤
   │ Fresh Fruit Bunches (FFB) - Jan / Apr │     160,000 │     160,000 │
   ├───────────────────────────────────────┼─────────────┼─────────────┤
   │ FFB - May                             │      43,000 │      32,000 │
   ├───────────────────────────────────────┼─────────────┼─────────────┤
   │                                       │     203,000 │     192,000 │
   ├───────────────────────────────────────┼─────────────┼─────────────┤
   │ FFB external                          │      44,000 │      42,000 │
   ├───────────────────────────────────────┼─────────────┼─────────────┤
   │                                       │     247,000 │     234,000 │
   ├───────────────────────────────────────┼─────────────┼─────────────┤
   │ Production (tonnes)                   │             │             │
   ├───────────────────────────────────────┼─────────────┼─────────────┤
   │ Crude palm oil (CPO)                  │      53,400 │      55,600 │
   ├───────────────────────────────────────┼─────────────┼─────────────┤
   │ Palm kernels                          │      10,700 │      11,000 │
   ├───────────────────────────────────────┼─────────────┼─────────────┤
   │ Crude palm kernel oil (CPKO)          │       3,400 │      4,100* │
   ├───────────────────────────────────────┼─────────────┼─────────────┤
   │                                       │             │             │
   ├───────────────────────────────────────┼─────────────┼─────────────┤
   │ Extraction rates (%)                  │             │             │
   ├───────────────────────────────────────┼─────────────┼─────────────┤
   │ CPO - Jan / Apr                       │        21.8 │        23.9 │
   ├───────────────────────────────────────┼─────────────┼─────────────┤
   │ CPO - May                             │        22.9 │        23.7 │
   ├───────────────────────────────────────┼─────────────┼─────────────┤
   │ Palm kernels - Jan / Apr              │         4.4 │         4.8 │
   ├───────────────────────────────────────┼─────────────┼─────────────┤
   │ Palm kernels - May                    │         4.4 │         4.6 │
   ├───────────────────────────────────────┼─────────────┼─────────────┤
   │ CPKO - Jan / Apr                      │        38.2 │        30.4 │
   ├───────────────────────────────────────┼─────────────┼─────────────┤
   │ CPKO - May                            │        38.0 │        36.7 │
   ├───────────────────────────────────────┼─────────────┼─────────────┤
   │                                       │             │             │
   ├───────────────────────────────────────┼─────────────┼─────────────┤
   │ Rainfall (mm)                         │             │             │
   ├───────────────────────────────────────┼─────────────┼─────────────┤
   │ Jan / Apr                             │       1,412 │       1,174 │
   ├───────────────────────────────────────┼─────────────┼─────────────┤
   │ May                                   │         314 │         240 │
   ├───────────────────────────────────────┼─────────────┼─────────────┤
   │                                       │       1,726 │       1,414 │
   └───────────────────────────────────────┴─────────────┴─────────────┘

    

   * 2016 CPKO production includes CPKO from prior year kernel production.

   The heavy rains in the final months of 2016 persisted into the initial
   months of 2017 but started to ease off in May. As a result, harvesting and
   transportation difficulties experienced at the end of 2016 continued into
   2017 but the operating situation gradually improved over the period and
   there was a marked upturn in crop in May.

   Moving into the traditionally dryer period of the year, the programme to
   strengthen the group's road infrastructure can be accelerated. This will
   facilitate more efficient access to mature areas and evacuation of
   harvested crop to the group's mills, supporting the improving trend in
   production and extraction rates.

   Mill extraction rates for 2017 to date reflect the harvesting and
   transportation difficulties but these are now on an improving trend as
   evidenced by the rates for May. To some degree, oil extraction rates in
   the first eight months of 2016 will have been inflated by the drought
   conditions as these result in an abnormally low moisture content in FFB
   harvested.

   Whilst it is still too early to assess the impact of the increased
   fertiliser programmes introduced into the mature areas in 2016, the
   benefit of these programmes and other measures to optimise field
   disciplines with advice and support from the recently engaged agronomy
   adviser, should start to become progressively more evident in the second
   half of 2017 and 2018.

   Works to expand the capacity of the group's newest mill at Satria and to
   refurbish the last of four boilers in the older mills are on target for
   completion in 2017. When the programme of major works is finished, the
   group will have adequate capacity for its own processing requirements and
   to process expected crops from smallholders at least until 2019.

   The CPO price, CIF Rotterdam, started the year in strong fashion rising
   from $790 per tonne at the beginning of January to $857 per tonne by the
   middle of the month on the back of generally lower production. Thereafter,
   the price drifted gently downward reaching a low point of $662.50 in late
   April as stock levels started to increase. Since then, the price has seen
   some recovery, now standing at $712.5 per tonne and is expected to remain
   relatively stable around the $700 level for the remainder of the year,
   supported to a degree by keen demand in the major growth economies. CPKO
   prices in January maintained the exceptionally high premia over CPO
   experienced in the last quarter of 2016 but then declined sharply in
   February to reflect premia in line with historic norms.

   The average selling price for the group's CPO for the five months to the
   end of May 2017, on an FOB basis at the port of Samarinda, net of export
   levy and duty, was $623 per tonne (2016: $518 per tonne). The average
   selling price for the group's CPKO, on the same basis, was $1,356 per
   tonne (2016: $941 per tonne). The group continued to sell all of its ISCC
   certified CPO at a premium throughout the period.

   Development work in PBJ and CDM has progressed in the first months of
   2017, but planting at both estates has been delayed until the weather
   becomes dryer and bunding to control flooding has been completed.
   Thereafter, planting out the 4,000 hectares planned for 2017 across both
   estates should be completed rapidly. The bunding now under construction at
   PBJ is on the northern section and is using the same techniques as the
   existing bunding that has proved effective throughout the recent months of
   heavy rains.

   Sales of renewable energy to PLN, the Indonesian national electricity
   company, for distribution to local villages amounted to over $250,000 in
   the five month period to the end of May 2017 (2016: $228,000) with
   household take-up continuing to grow each month.

   Stone and coal operations

   The limestone quarry adjacent to the group's PBJ property remains on track
   to start production during this month. The group is also working actively
   on the reopening of its Kota Bangun coal concession following the recent
   agreement with a new third party to resume mining of this concession. The
   group is in discussions to obtain access to an existing loading point on
   the Mahakam River to be used to evacuate production.

   Finance

   As previously reported, the group's financial position has been much
   improved over the last two years by the subscription of some $28 million
   for additional ordinary and preference capital, the issue of replacement
   sterling and dollar notes, maturing in, respectively, 2020 and 2022,
   totalling $65 million, the loan and equity investment by the group's new
   Indonesian partners, DSN, of $43 million, a new Indonesian term bank loan
   of $18 million and extensions to the maturity of other Indonesian bank
   borrowings. Discussions are continuing on limited further measures to
   improve the maturity profile of the group's indebtedness and the group's
   liquidity.

   Outlook

   Crop levels are now starting to improve. Bunch censuses are encouraging
   and, with improved disciplines in the field, yields gradually benefitting
   from a more intensive fertiliser regime and improved transport conditions,
   the directors are optimistic of increasing crops and, in due course, a
   full recovery in financial performance.

   Company enquiries:
   R.E.A. Holdings plc
   Tel: 020 7436 7877

   Media enquiries:
   Jennifer Renwick
   jennifer.renwick@camarco.co.uk
   Tel: 020 3757 4994

   ══════════════════════════════════════════════════════════════════════════

   Language:      English
   ISIN:          GB0002349065
   Category Code: AGM
   TIDM:          RE.
   LEI Code:      213800YXL94R94RYG150
   Sequence No.:  4291


    
   End of Announcement EQS News Service


   582519  13-Jun-2017 

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