Dow Jones received a payment from EQS/DGAP to publish this press release.
R.E.A. Holdings plc (RE.)
R.E.A. Holdings plc: change to board of directors and trading update
21-Feb-2017 / 07:00 GMT/BST
Dissemination of a Regulatory Announcement that contains inside information
according to REGULATION (EU) No 596/2014 (MAR), transmitted by EQS Group.
The issuer is solely responsible for the content of this announcement.
*R.E.A. Holdings plc ('REA' or the 'company')*
*Change to board of directors and trading update *
*Management*
The directors of REA announce that on 20 February 2017 they accepted the
resignation of Mark Parry as managing director of the company and his
resignation as president director of PT REA Kaltim Plantations ('*REAK*'),
REA's principal operating subsidiary in Indonesia, with immediate effect.
Mark has also resigned from all other directorships and employment he holds
with REA's subsidiaries. Whilst Mark's board appointments ended with effect
from 20 February 2017, his employment with REA's Singapore subsidiary will
continue until 20 May 2017.
Mark decided to offer his resignation following concerns expressed by the
authorities in East Kalimantan, Indonesia, that Mark, in his position as
president director of REAK, might have undertaken various tasks that were
outside the scope of his work permits. The tasks in question involved
matters relating to human resources and personnel management (which are
reserved by Indonesian law to Indonesian nationals) and conducting business
at group locations not specifically covered by the work permits.
The directors of both REA and REAK would like to thank Mark for his work
over the past five years and his many achievements, particularly in the
areas of new planting and developing good working relations with local
villages. The directors would also like to take this opportunity to wish
Mark well in his future endeavours.
As a result of Mark's decision, the directors of REA have appointed Carol
Gysin as managing director of REA, based in London. Carol has worked for REA
for the last eight years as group company secretary and is a Fellow of the
Institute of Chartered Secretaries and Administrators.
In addition, the shareholders of REAK intend to appoint George Kapitan as
president director of REAK. George, who is an Indonesian citizen, is
currently chairman of the board of commissioners of REAK but will relinquish
that position on his appointment as president director of REAK. It is
intended that David Blackett, chairman of REA, be appointed as chairman of
REAK's board of commissioners in his place.
The directors of REA are confident that the group management team already in
place will be able to continue the operations and planned development of the
group without loss of momentum.
*Agricultural operations*
Key agricultural statistics for the year to 31 December 2016 (with restated
comparative figures for the corresponding period of 2015) were as follows:
+------------------------------+-------+-------+
| |2016 |2015* |
+------------------------------+-------+-------+
|FFB?crops (tonnes): | | |
+------------------------------+-------+-------+
|Group harvested |468,371|600,741|
+------------------------------+-------+-------+
|Third party harvested |98,052 |138,657|
+------------------------------+-------+-------+
|Total |566,423|739,398|
+------------------------------+-------+-------+
| | | |
+------------------------------+-------+-------+
|Production (tonnes): | | |
+------------------------------+-------+-------+
|Total FFB processed |560,957|728,871|
+------------------------------+-------+-------+
|CPO |127,697|161,844|
+------------------------------+-------+-------+
|Palm kernels |26,371 |33,877 |
+------------------------------+-------+-------+
|CPKO |9,840 |12,557 |
+------------------------------+-------+-------+
| | | |
+------------------------------+-------+-------+
|Extraction rates (percentage):| | |
+------------------------------+-------+-------+
|CPO |22.8 |22.2 |
+------------------------------+-------+-------+
|Palm kernel |4.7 |4.7 |
+------------------------------+-------+-------+
|CPKO |34.7 |35.0 |
+------------------------------+-------+-------+
| | | |
+------------------------------+-------+-------+
|Rainfall (mm): | | |
+------------------------------+-------+-------+
|Average across the estates |3,449 |2,141 |
+------------------------------+-------+-------+
* The 2015 comparative figures have been restated as the new information
system that was implemented in 2015 allows for data collection in real time
so that operational statistics can be reported on an actual month basis
As previously reported, the severe dry periods experienced in both 2014 and
2015 had a significant negative impact on the group's crop production in
2016, alongside that of other oil palm plantations in East Kalimantan and a
number of other areas of South East Asia. Cropping rates started to recover
from September onwards, but unusually heavy rainfall in November and
December disrupted collection, which meant that production in the final
months of the year fell short of crop availability as not all crop could be
harvested.
With promising bunch formation in the field, the appointment of a new
agronomy consultant at the beginning of 2017 and work now underway to
strengthen the group's road infrastructure, the directors are optimistic
that monthly production will start to accelerate.
The CPO price, CIF Rotterdam, edged steadily upwards through 2016 from an
opening price of $570 per tonne to close at $801 per tonne and has traded in
a range between $770 and $860 per tonne since the beginning of 2017. It is
widely expected that prices will remain around current levels at least for
the first half of 2017. Beyond that much depends upon soya crops but with
CPO stocks depleted as a result of the poor 2016 harvest, there is a
reasonable expectation that prices will continue at remunerative levels
through the second half of 2017.
Good progress was made with the group's extension planting programme in
2016.
Cumulative development for the year is detailed below:
+------------------------------------------+-------+
|Hectares |2016 |
+------------------------------------------+-------+
|Cleared, not yet planted at 1 January 2016|2,700 |
+------------------------------------------+-------+
|Cleared during the period |4,600 |
+------------------------------------------+-------+
|Cleared, not yet planted at end of period |(1,600)|
+------------------------------------------+-------+
|Planted during the period |5,700 |
+------------------------------------------+-------+
Clearing and planting are continuing at a good rate.
*Stone and coal operations*
The group is moving towards implementation of its previously announced plans
to purchase crushed stone from a third party contractor who would extract
the stone from a limestone quarry located near the PT Putra Bongan Jaya
(*'PBJ'*) property and then crush the stone on a site within the PBJ
property. The resultant crushed stone will be utilised for hardening roads
on PBJ and for sale to third parties as well as potentially to other group
companies.
Arrangements for the resumption of coal mining at the group's PT Indo
Pancadasa Agrotama (*'IPA'*) concession near Kota Bangun are well advanced
and a new contractor will be selected from a short list in the near future.
Following a limited period for rehabilitation of the mine, it is intended
that coal production will resume. The agreement that is already in place
will provide for a steady cash inflow to the group based upon prevailing
coal prices but with an agreed floor.
*Outlook and publication of results*
Production and the group's expansion programme are expected to make steady
progress in 2017, with the benefit of improvements to operational
infrastructure and efficiencies as well as stable CPO prices.
In line with the timetable adopted in previous years, it is expected that
the final results for 2016 will be announced, and the annual report in
respect of 2016 published, at the end of April 2017.
Enquiries:
R.E.A Holdings plc
Tel: 020 7436 7877
Language: English
ISIN: GB0002349065
Category Code: STR - Change to board of directors and trading update
TIDM: RE.
LEI Code: 213800YXL94R94RYG150
Sequence No.: 3867
End of Announcement EQS News Service
545831 21-Feb-2017
(END) Dow Jones Newswires
February 21, 2017 02:01 ET (07:01 GMT)
