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REA Holdings crop harvest increases

By BFN News | 04:19 PM | Tuesday 06 May, 2014


R.E.A. Holdings' harvest of oil palm fresh fruit bunches totalled 205,847 tonnes for the four-month period to the end of April, compared with 178,385 tonnes a year ago. Purchases of FFB totalled 44,635 tonnes compared with 26,366 tonnes in the corresponding period last year. Rainfall to the end of April averaged 955 mm across the group's operations, compared with 1,396 mm a year ago. Processing of the group's own FFB production and the externally purchased FFB, together totalled 250,482 tonnes (2013: 204,751 tonnes) produced 53,186 tonnes of crude palm oil (2013: 43,139 tonnes), 10,904 tonnes of palm kernels (2013: 9,319 tonnes) and 4,232 tonnes (2013: 3,403 tonnes) of crude palm kernel oil reflecting extraction rates of, respectively, 21.6% for CPO (2013: 21.1%), 4.4% for kernels (2013: 4.6%) and 38.5% for CPKO (2013: 36.0%). The company says that as noted in its annual report published on 28 April, the improved relations with local communities, as well as a steady reduction in the maintenance backlog that built up on the estates during the period of disruptions, is evidenced in the improving production and processing of crops in the first four months of 2014. With the situation on the group's estates now stable for a year, the continuing restoration of operating standards to the high levels to which the group aspires should further boost production in the coming months. Development is continuing on the land areas held by PT Putra Bongan Jaya with a view to achieving significant planting on these areas in 2014. It is also hoped during 2014 to extend the plantings on PT Cipta Davia Mandiri and to initiate development on PT Praesetia Utama following the implementation agreement reached in respect of the agreed swap of land currently held by PT Sasana Yudha Bhakti (and the subject of overlapping coal rights) for land held by PU, as reported previously. The group is also pushing ahead with the allocation of land for smallholder cooperatives and aims to increase materially the planted smallholder cooperative areas during 2014 and 2015. This, and measures put in place to improve liaison with local communities, are no doubt assisting in maintaining the much improved relations with the local communities that the group is now enjoying. And it says progress is also being made with a number of ancillary projects: the sale of electricity generated by the group's methane capture plants to the Indonesian state electricity company; the establishment of a quarry on the group's stone concession with a view to producing stone for the group's agricultural operations and for sale to third parties; and the cooperation arrangements for the mining of the group's coal concessions by third parties. Revenue from at least some of these initiatives should be received in 2014 with increasing revenues in future years. The company says the CPO price, CIF Rotterdam, currently stands at $887.5 per tonne. The average price for the period 1 January to 30 April 2014 was $905 as compared with an average for the corresponding period in 2013 of $841. Factors currently impacting the CPO price are the increased government mandated bio-diesel components of transport fuel in Indonesia, Malaysia and Argentina and some indications of an El Nino weather phenomenon. To a degree these factors are being offset by the expectations of very large 2014 soybean crops. Having been broadly in line with CPO prices for most of 2013, the CPKO price now stands at a premium of over $300 per tonne to the CPO price reflecting the impact of a cyclone on the coconut growing areas of the Philippines in November 2013 which caused prices for coconut oil and CPKO (which is similar in composition to coconut oil) to rise. At 4:19pm: (LON:RE.) R.E.A. Holdings PLC share price was +3.13p at 462.63p Story provided by StockMarketWire.com

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