20th Sep 2019 15:07
(Alliance News) - Indonesia-based palm oil producer REA Holdings PLC on Friday said it swung sharply to a loss in the first half of 2019 on higher costs and currency losses despite revenue growth.
The group reported a pretax loss of USD29.5 million for the six months to the end of June, compared to a profit of USD1.3 million, due to a foreign exchange loss of USD16.0 million, resulting from depressed crude palm oil prices as well as a stronger Indonesian rupiah compared to the US dollar.
There was also a cost of USD8.8 million, related to a stock movement, compared to a gain of USD8.4 million the prior year
Meanwhile, revenue grew 17% to USD56.6 million from USD48.2 million as a result of the sale of excess inventory carried forward at the end of 2018. The stock build up was due to logistical problems in transferring stocks from the estates downriver to Samarinda and Balikpapan.
REA said the average selling price for crude palm oil as at June 30 dropped to USD430 per tonne from USD549 the same date the year before.
Meanwhile, the company produced 96,514 tonnes of palm oil, up from 89,638 tonnes the year before, as the production of fresh fruit bunches rose to 429,857 tonnes from 405,418 tonnes.
REA said it expects crude palm oil prices to increase further as global demand for vegetable oil gradually outstrips supply, while the company itself starts to achieve same cost savings in the second half of 2019.
Shares in REA Holdings were up 1.3% at 162.00 pence on Friday in London.
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