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REA Holdings 2022 production up; encouraged by operational improvement

1st Feb 2023 14:35

(Alliance News) - REA Holdings PLC on Wednesday said production levels had increased in 2022 in its palm oil operations, despite setbacks caused by heavy rainfall.

REA shares were up 16% trading at 114.95 pence per share on Wednesday afternoon in London.

The London-based crude palm oil producer focused on Indonesia said total fresh fruit bunch output for 2022 was 1.0 million tonnes, rising 6.9% from 949,002 tonnes the year prior, while group harvested FFB was 765,682 tonnes, up 3.7% from 738,024 tonnes in 2021.

The company said the output increase came despite periods of prolonged rainfall and a loss of crop from the oldest areas, where replanting began during the second half of the year.

REA said 2022 rainfall was 23% higher that the ten year average, as was the number of rain days that harvesting had to be cancelled. Average rainfall across all of the company's estates was 3,837 millimetres, up 5.1% from 3,650 a year ago.

The company reported crude palm oil output of 218,275 tonnes, up 4.4% from 209,006 tonnes a year ago. The average adjusted CPO selling price was USD821 per tonne, up 5.6% from USD777.

Crude palm kernel oil production was 18,206 tonnes, rising 4.9% from 17,361 tonnes a year ago. The average adjusted CPKO selling price was USD1,185 per tonne, up 2.4% from USD1,157.

The company said its operational and financial position is "steadily improving", with further progress hoped for in 2023.

Chair David Blackett said: "The group’s improving operational and financial performance is encouraging. Generally, firm CPO prices have largely offset inflationary pressures on costs albeit that prices have been restricted by the Indonesian government’s efforts to constrain the local price of cooking oil from rising above an affordable level."

By Harvey Dorset, Alliance News reporter

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