Camellia Plc - AGM Trading Statement
AGM Trading Statement
Camellia Plc has today issued the following update on trading in the year to date.
As stated in our annual results for the year ended 31 December 2018, tea volumes nationally in Kenya were very high at the end of 2018 and in the early part of 2019, resulting in poor prices at auction for both Kenyan and Malawian teas. This situation has now reversed with a dry spell in Kenya reducing volumes and a consequent improvement in prices. However, our average prices in Kenya and Malawi for the year to date remain significantly below those of 2018 and our Kenya production volumes are circa 30% lower than last year. In India and Bangladesh, good rains have resulted in substantially higher early season production volumes, but our average selling prices have been below those for 2018 due to an oversupply of last season's teas. However, prices for new season teas in India and Bangladesh have firmed slightly on last year. The majority of tea production and sales take place in the second half of the year.
Early harvesting of macadamia has seen crops slightly better than last year; the majority of the crop has still to be harvested and processed. Early indications are that prices will be better than those of 2018.
Our 2019 Hass avocado season has yet to start, but should the lack of rainfall continue we would expect a drop in volumes against 2018's record volumes.
In Food Service, ACS&T is trading as expected and Jing Tea continues to grow strongly in line with its development plan.
Abbey Metal Finishing and Atfin have been impacted by a marked slow-down in orders from aerospace customers at the end of the first quarter. AJT Engineering continues to see an increase in its order book.
Since the start of 2019, we have completed the acquisition of the two tea estates in Assam. In addition, we have also agreed contracts to purchase additional land close to our macadamia operations in South Africa which will be developed to macadamia and avocados.
The impacts of climate change on our Group are significant and something that the Board is focused upon. I am therefore pleased to announce that we have recently issued our first ever Group ESG report which is available on our website (www.camellia.plc.uk). In addition, the Board has established a 'Fund' of an initial £2m, an initiative to use some of our centrally held resources to make a step change in our sustainability programmes.
As always, our financial results remain largely dependent on Agriculture where the majority of harvesting, and hence sales, takes place in the second half of the year. It is therefore too early to give an indication of the likely results for 2019.