12th Jun 2014 11:35
LONDON (Alliance News) - Palm oil producer REA Holdings PLC Thursday said it is expecting improved first half results, after it harvested, processed and sold more fresh fruit bunches at higher prices in the five months to end of May.
The company said it is encouraged by trading improvements in its operations so far this year, and gave a confident outlook for the remainder of the year.
"With standards gradually being restored to the high levels to which the group aspires, potential new revenues from ancillary projects, and the continued expansion of the agricultural operations, the directors are confident that the recent improvement in the group's performance can be sustained," the company said in a statement.
REA Holdings said the crop of oil palm fresh fruit bunches harvested during the five month period was 258,000 tonnes, up from 221,000 tonnes in the same period last year. External purchases of fresh fruit bunches totalled 57,000 tonnes, up from 34,000 tonnes a year earlier, it said.
It said that the processing of the group's own fresh fruit bunches production and the externally purchased fresh fruit bunches, together totalled 315,000 tonnes, up from 255,000 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 company said that its relationship with the local communities remains calm.
It said that despite a relatively dry start to the year, it expects production levels to continue rising, supported by the steady reduction in the maintenance backlog that built up on the estates during a period of disruptions and the implementation of further measures to upgrade infrastructure and boost operating efficiencies.
"This is expected to continue into the second half of the year, subject to any impact that an El Nino or other adverse weather condition might have," the company said.
REA Holdings said the crude palm oil price remained relatively firm during the first months of the year, trading in a range between USD830 and just below USD1,000 per tonne.
It said the average selling price for the group's crude palm oil for the five-month period on an free-on-board basis at the port of Samarinda, and after payment of export duty, was USD721 per tonne, up from USD586 per tonne last year.
REA Holdings also said it has identified a number of engineering and operational deficiencies at its oil mills which it will address over the next few months.
Shares in REA Holdings were down 0.1% at 482.40 pence Thursday morning.
By Rowena Harris-Doughty; [email protected]; @rharrisdoughty
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