REA sees higher annual crop output being offset by lower prices, FX

Writer, Stock Market Wire
Monday, February 11, 2019 - 09:51

Agribusiness REA Holdings said it produced 50% more crops in calendar 2018, though it warned lower prices and foreign exchange movements would weigh on its performance.

The company produced 991,278 tonnes of crop in the year through December, up from 644,570 tonnes in 2017.

Crude palm oil produced during the peak cropping months of July to October had to be sold when the market was at its weakest.

'Also, financing charges in the second half will be significantly higher than in the first half because the Indonesian rupiah rallied in November and December,' the company said.

REA also said it expected to book a loss of some $8m on the sale of its shareholding in PT Putra Bongan Jaya.

'The increased production seen in 2018 is continuing into 2019 with a crop for January 2019 of some 60,000 tonnes, comfortably ahead of the January 2018 crop of 44,000 tonnes,' REA said.

'There remains much to be done this year to ensure that the group realises its full potential.'

'It will be particularly important to maximise fresh fruit bunch collection and optimise evacuation and processing.'

'To this end, capital expenditure will be focused on works that will ensure resilience and availability of sufficient capacity in the group's mills, including the expansion of the newest mill to 90 tonnes per hour.'

At 9:51am: (LON:RE.) R E A Holdings PLC share price was +2p at 235p

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