R.E.A. HOLDINGS PLC (the “company”)
HALF YEARLY REPORT 2021
HIGHLIGHTS
Overview
- Performance turned around and group returned to profit
- Stronger CPO and CPKO prices holding firm
- Direct impacts of Covid remain limited
Financial
- Revenue up 41 per cent to $87.7 million (2020: $62.4 million), benefitting from higher average selling prices, including premia for certified oil, for CPO and CPKO of, respectively, $696 (2020: $551) and $1,029 (2020: $625)
- Cost of sales, excluding FFB purchases, increased 7 per cent to $46.5 million (2020: $43.5 million); cost of FFB purchases increased in line with higher CPO prices and volume
- EBITDA increased 147 per cent to $27.7 million (2020: $11.2 million)
- New Indonesian banking arrangements for the group's principal operating subsidiary successfully concluded, with extended repayment period and reduced interest rate significantly improving group cash flow
- Net indebtedness decreased by $14.0 million to $175.4 million (31 December 2020: $189.4 million)
- Further initiatives to improve financial resilience progressing
- Payment of preference dividends resumed
Agricultural operations
- FFB production increased to 361,167 tonnes (2020: 342,653 tonnes)
- Third party FFB purchases increased to 114,924 tonnes (2020: 98,297 tonnes)
- CPO extraction rates averaged 22.3 per cent (2020: 22.9 per cent)
Stone and coal interests
- MoU signed by stone concession holding company ATP to supply andesite to a neighbouring coal company and negotiations with quarrying contractor progressing
- Coal contractor preparing to resume mining at IPA's concession and deliveries from neighbouring coal company to IPA's port facilities recently commenced
- Group intends to recover coal loans and to withdraw from coal interests as soon as practicable
Sustainability
- Recertification audits successfully completed and licences renewed pending conclusion of outstanding onsite audit work when travel restrictions permit
- Pilot project underway with an international body to establish financing mechanism in support of local smallholders with objective of improved traceability of the FFB supply chain
- Gold certificate awarded by the Ministry of Manpower for the group's Covid prevention and control programme
Outlook
- More favourable trading environment and new banking arrangements in place afford opportunity to strengthen the group's finances
- With CPO and CPKO prices expected to remain at remunerative levels, the group looks forward to a period of prosperity