6th May 2014 16:04
LONDON (Alliance News) - Oil palm producer REA Holdings PLC Tuesday said that production increased in the first four months of the year, and progress is being made with a number of ancillary projects.
REA Holdings said that the crop of oil palm fresh fruit bunches harvested during the four months to end of April, amounted to 205,847 tonnes, compared with 178,385 tonnes a year earlier.
The group said that purchases of fresh fruit bunches totalled 44,635 tonnes during the period, up from 26,366 tonnes the prior year.
It said that the processing of the group's own fresh fruit bunches production and the externally purchased fresh fruit bunches, together totalled 250,482 tonnes, up from 204,751 tonnes a year earlier. It said that crude palm oil and tonnes of palm kernels produced during the period increased, reflecting slightly higher extraction rates.
The group said that progress is also being made with a number of ancillary projects, including the sale of electricity generated by the group's methane capture plants to the Indonesian state electricity company. Other progressions on ancillary projects include 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.
"Improving operating results, coupled with new revenues from ancillary projects, should enable the group to continue with its plans to grow the agricultural operations to the planned level of at least 60,000 hectares," the company said in a statement.
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.
REA said that a decision was ruled in favour by the Jakarta Tax Courty, of the group's principal operating subsidiary, PT REA Kaltim Plantations, in relation to the disputed tax assessment disallowing mark to market losses incurred in 2008 on cross currency interest rates swaps. It said that at current exchange rates, the tax involved, which has been previously paid in full, amounts to some USD9 million.
However, it said that it is understood that it is the usual practice of the Indonesian tax authorities to submit judgements of the Tax Courts in favour of tax payers to judicial review by the Indonesian Supreme Court, and the decision may therefore be the subject of an appeal.
Shares in REA Holdings closed Tuesday 1.2% higher at 465.00 pence.
By Rowena Harris-Doughty; [email protected]; @rharrisdoughty
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