Interim Results

R.E.A.Hldgs PLC
25 September 2002


                              R.E.A. HOLDINGS plc 
                (Registered in England and Wales number 671099) 

                              Interim Report 2002 

Interim statement 

Following the divestments of 2001, all of the group's sales revenue for the half
year to 30 June 2002 was derived from the oil palm plantation operations of PT
REA Kaltim Plantations ('REA Kaltim') in East Kalimantan, Indonesia, 

Crops at REA Kaltim continued to increase in line with expectations and 86,400
tonnes of oil palm fresh fruit bunches were harvested in the six months to 30
June 2002 as compared with 44,700 tonnes in the same period of 2001. Crude palm
oil ('CPO') and palm kernel production in the six months to 30 June 2002
totalled 21,600 tonnes and 3,900 tonnes as compared respectively with 9,800
tonnes and 1,700 tonnes for the same period in 2001. 

CPO prices were in the range of US$ 320 to 330 per tonne in the first quarter of
2002 but improved steadily throughout the second quarter to reach some US$ 420
per tonne at the end of the period. Price levels have since been maintained at
around the US$400 level. The US dollar revenue benefits derived in the first
half of 2002 from higher sales volumes and the improving CPO prices were,
however, offset to a material extent by an increase in local operating costs as
a result of the strengthening exchange rate of the Indonesian Rupiah against the
US dollar and a 39 per cent increase, effective from 1 January 2002, in the
government directed wage rates in Indonesia. 

External finance for REA Kaltim is mainly provided in US dollars and its sale
revenue is also priced in US dollars. Accordingly, all REA Kaltim's fixed assets
are maintained by the group in US dollars rather than the local currency. The
depreciation in the US dollar against sterling in the period resulted in a
negative exchange translation difference of £2.3 million. 

The open offer of 4 per cent convertible loan stock made by the group in April
2002 raised some £3.5 million after expenses. Using these monies and existing
financial resources, the group subscribed for 11,694 new ordinary shares in
Makassar Investments Limited ('Makassar'), the holding company of REA Kaltim,
being the group's ordinary share entitlement under a rights issue made by
Makassar in June 2002. The other shareholders in Makassar did not take up any of
their entitlements pursuant to the rights issue and, as a result, the group's
holding in Makassar ordinary shares increased from 51 per cent to slightly over
79 per cent. The rights issue proceeds are being used by Makassar to secure the
finance required by REA Kaltim to fund its continuing operations and support the
rescheduling of its indebtedness. 

Negotiations for the rescheduling of REA Kaltim's indebtedness are making good
progress. A term sheet has been issued to the local Indonesian banks which
provides, inter alia, that interest payable by the company on the US$29.5
million of local loans will be reduced to SIBOR plus 2.75 per cent and capital
repayments will be deferred so as to be made over the period 2004 to 2009. The
term sheet has to date been agreed by the company and by a majority by value of
the Indonesian banks. REA Kaltim has also now secured the support of Commerzbank
for the rescheduling of its US$11 million loan to REA Kaltim. 

The dry season in 2002 has extended well into September and this has caused some
delay in the seasonal increase in crop levels normally experienced in the last
four months of each calendar year. However, following recent rainfall, weekly
crops have increased sharply and, provided that the higher levels now being
achieved are maintained through to the end of the year, it is hoped that the
group will achieve the previously announced projection for the year of a total
of 57,000 tonnes of CPO and kernels. 

The higher CPO price coupled with continuing growth in REA Kaltim crops augurs
well for improved trading in the second half. 

R M ROBINOW 
Chairman 
25 September 2002 


                                                                                                    
Consolidated balance sheet 
30 June 2002                                         
                                            30 June     30 June     31 December  
                                               2002        2001            2001         
                                               £000        £000            £000         
                    
Fixed assets                                                                    
Tangible fixed assets                        47,720         129          50,304       
Investments                                     507       3,892             507          
                                             48,227       4,021          50,811       

Current assets                                                                  
Stocks                                        1,722           -           1,143        
Debtors                                       2,415       9,703           2,892        
Cash                                          4,236       4,963           5,398        
                                              8,373      14,666           9,433        

Creditors up to one year                                                        
Borrowings                                  (28,405)       (623)        (33,652)     
Creditors                                    (6,315)     (1,167)         (5,721)      
                                            (34,720)     (1,790)        (39,373)     

Net current (liabilities)/assets            (26,347)     12,876         (29,940)     

Total assets less current liabilities        21,880      16,897          20,871       

Creditors over one year - borrowings         (5,925)          -          (1,871)      

Net assets                                   15,955      16,897          19,000       


Capital and reserves                                                            
Called up share capital                       8,887       8,812           8,812        
Share premium account                           966       1,178           1,178
Capital redemption reserve                    3,240       3,240           3,240        
Special reserve                                   -       6,888               -            
Warrants                                      1,218       1,218           1,218        
Revaluation reserve                          (3,734)       (466)         (2,316)      
Profit and loss account                       2,099      (3,973)          2,465        

Shareholders' funds*                         12,676      16,897          14,597       
Minority interests**                          3,279           -           4,403        

                                             15,955      16,897          19,000       

*  Shareholders' funds comprise equity interests of £6,971,000 (30 June 2001
   £11,192,000; 31 December 2001 £8,892,000) and non-equity interests of 
   £5,705,000 (30 June 2001 £5,705,000; 31 December 2001 £5,705,000). 

** Minority interests comprise equity interest of £563,000 (31 December 2001 
   £4,000) and non-equity interest of £2,716,000 (31 December 2001 £4,399,000). 



Consolidated profit and loss account 
for the six months ended 30 June 2002                                          

                                       6 months to   6 months to       Year to 
                                           30 June       30 June   31 December  
                                              2002          2001          2001         
                                              £000          £000          £000         

Turnover                                     
Continuing                                   5,246           203         1,326
Discontinued                                     -           105           105
                                             5,246           308         1,431

Cost of sales                               (3,923)          (26)         (403)    

Gross profit                                 1,323           282         1,028                        

Other income and expenses                     (893)            1        (1,223)             

Group operating profit/loss) (note 1)          430           283          (195)                        

Share of operating profit of associates 
- continuing                                     -           (67)          (29) 
- discontinued                                   -            52           151
                                  
Disposal of assets & investments - continuing   (3)          628           569 
Disposal of assets & investments - discontinued  -             -          (121)
Interest receivable and similar income         114             -         1,131
Interest payable - associates (note 2)           -          (424)         (807)
Interest payable - group (note 2)             (917)         (120)         (272)
                                                                                               
(Loss)/profit on ordinary activities 
before taxation                               (376)          352           427
                                                                             
Tax on (loss)/profit on ordinary activities    (20)          (13)         (147)               

(Loss)/profit on ordinary activities 
after taxation                                (396)          339           280
          
Minority interests (including non-equity                                                                                
interests)                                      30           (15)          (59)  

(Loss)/profit for the period                  (366)          324           221                          

Non-equity dividends                          (257)         (257)         (512)               

Retained (loss)/profit for the period         (623)           67          (291)
                                                                                             
Earnings per ordinary share 
- basic                                       (5.0)p         0.7p         (2.6)p
- fully diluted                               (4.3)p         0.7p         (2.6)p
                                            

Notes: 
1. Group operating profit/loss)       
   Continuing                                  430           237          (241)                                        
   Discontinued                                  -            46            46
                                                
2. Interest payable                           
   Continuing                                 (917)         (404)         (903)
   Discontinued                                  -          (140)         (176)

                                                 
 
Consolidated cash flows 
for the six months ended 30 June 2002 

                                       6 months to   6 months to       Year to 
                                           30 June       30 June   31 December  
                                              2002          2001          2001         
                                              £000          £000          £000         
          
Group operating profit/loss)                   430           283          (195)
Depreciation                                 1,255            15           137          
(Increase)/Decrease in stock                  (418)           11            42
Decrease/(Increase) in debtors                 458        (1,941)       (2,561)
(Decrease)/Increase in creditors               (83)         (330)           39      
Exchange (loss)/gain                          (845)          (13)           16           
Net cash flow from operating activities        797        (1,975)       (2,522)      

Returns on investments and servicing 
of finance                                                     
Interest received                              114             -         1,131        
Interest paid                                 (917)         (140)         (272)        
Dividends paid to preference shareholders        -          (257)         (256)        
Taxation                                       (51)           (1)          (59)         

Capital expenditure and financial investment                                                        
Purchase of tangible fixed assets           (1,049)          (47)         (664)        
Sale of tangible fixed assets                   14         2,110         2,146        
Sale of investments                              -             -           406          

Acquisitions and disposals                                                                          
Costs of acquisition of additional shares 
 in subsidiary                                (177)            -             -            
Sale of subsidiaries                             -         3,185         3,245        

Cash inflow before management of liquid                                                             
resources and financing                     (1,269)        2,875         3,155        

Management of liquid resources and 
financing                                                        
Convertible loan stock issue after expenses  3,528             -             -            
Share issue after expenses                       -         1,268         1,268        
Other                                       (3,104)       (4,029)       (3,662)      
                                              (845)          114           761          
                                                                                                              

Reconciliation of movement in net cash/(debt)                                                       
(Decrease)/increase in cash in period         (845)          115           761          
Cash flow from debt and leases                (279)        3,199         3,770        
Cash flow from management of liquid 
 resources                                    (418)          764          (108)        
                                            (1,542)        4,078         4,423        

New subsidiary undertaking and disposals         -             -       (33,833)     
New debt and leases, net                      (148)           15          (104)        
Exchange differences                         1,668             -             -            
Net (debt)/cash at beginning of period     (29,267)          247           247          
Net (debt/cash at end of period            (29,289)        4,325       (29,267)     

 

Notes to the interim statement 

                                       6 months to   6 months to       Year to 
                                           30 June       30 June   31 December  
                                              2002          2001          2001         
                                              £000          £000          £000         

Profit on ordinary activities before taxation 
(by business class) 
Merchanting                                      -            45            45 
Agriculture 
- associates                                     -          (419)         (685)
- group                                       (101)            -           137
Other activities                                 7            (7)          118
Unallocated                                   (282)          105           364
Disposal of assets and investments               -           628           448
                                              (376)          352           427 

Continuing                                    (376)          524           535
Discontinued                                     -          (172)         (108)
                                              (376)          324           427 


Reconciliation of shareholders' funds 
(Loss)/profit for financial period            (366)          324           221
Dividends (less non equity dividends in 
arrears)                                         -          (257)         (256)
Issue of shares                                135         1,268         1,268
Costs of convertible issue                    (272)            -             -
Revaluations and foreign exchange 
translation                                 (1,418)           43        (2,255)
Goodwill previously written off, reinstated      -             -           100
                                            (1,921)        1,378          (922)

Shareholders' funds at beginning of period  14,597        15,519        15,519
Shareholders' funds at end of period        12,676        16,897        14,597


Notes: 
The interim financial information has not been audited and does not constitute
statutory accounts for the purpose of Section 240 of the Companies Act 1985, but
has been prepared on the basis of the accounting policies set out in the annual
accounts as at 31 December 2001 (treating the new Makassar Investments Limited
sub group as a single entity for consolidation purposes). 

The figures for the year ended 31 December 2001 are abridged and have been
extracted from the statutory accounts filed with the Registrar of Companies on
which the auditors issued an unqualified report. 


Registered office 
Third Floor, 40-42 Osnaburgh Street 
London NW1 3ND 

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