Feronia Inc. Reports Second Quarter 2012 Results
(firmenpresse) - TORONTO, ONTARIO -- (Marketwire) -- 08/28/12 -- Feronia Inc. ("Feronia" or the "Company") (TSX VENTURE: FRN) today released its unaudited financial results for the three and six months ended June 30, 2012. All amounts in this release are expressed in US dollars unless otherwise indicated.
Q2 2012 Highlights
Bill Dry, CEO stated: "The key value driver in our palm oil business is our new plantings. During the quarter we continued to make great progress in our replanting programme, one of the largest ever undertaken in Africa. We have also made significant progress in completion of the new palm oil mill at Yaligimba plantation. We expect to produce palm oil in the fourth quarter of this year."
"At the arable farming operation, we harvested an estimated 1.7 tonnes per ha of paddy rice, a major improvement over the nominal yields achieved in the Company's first planting, but still well below our short-term objectives. Independent agronomic consultants have completed a review of our arable operations encompassing local conditions, inputs and equipment used, and processes and procedures followed. The Company is currently reviewing a series of recommendations provided by the consultants to improve the performance of the operation," added Mr. Dry.
Operational Summary and Key Metrics by Division
Palm Oil Operations
Key Metrics:
Key Developments:
Arable Farm Operations
Key Metrics:
Key Developments:
Outlook
The Company's strategy for its oil palm plantations business continues to be to maximize returns from existing plantings while investing in new plantings and the required processing capacity. Commissioning of the new palm oil mill at Yaligimba is expected to provide the Company with immediate access to an additional 3,903 ha of mature oil palms for the production of CPO, an increase of 62.1% from the area currently accessible. Once the Yaligimba palm oil mill is completed, there are no major capital expenditures currently anticipated in the Company's oil palm plantations business for the next several years, excluding fertiliser costs associated with immature palms.
The Company's primary objective with respect to its arable farming business for the remainder of 2012 is to prove commercially viable yields at its operation in Bas Congo, DRC. The Company does not intend to expand the arable farming operation until commercially compelling yields have been achieved on a scale of up to 2,000 hectares. Once such yields have been achieved, the Company will consider expanding the scale of the planting programme. With excess processing capacity in place, such an expansion can occur relatively quickly and with minimal capital expenditure outside of costs associated with land clearing and preparation.
In summary, the key objectives of the Company in 2012 remain as follows:
(i) commissioning the palm oil mill at the Yaligimba plantation, thereby enabling the Company to harvest and process fruit grown at that location;
(ii) completing up to 5,000 ha of re-planting across its oil palm plantations; and
(iii) proving commercial yields at its arable farming division.
"Feronia's oil palm business continues to show excellent progress in its long-term value driver, new plantings, and in the critical short-term value driver of yield maximization from legacy plantings," said Ravi Sood, Executive Chairman. "The arable operations continue to make progress with improved yields and the processing facilities nearing completion. We have also received further third party validation of the long-term opportunity and advice on improving operating performance. The Company has recently raised $7.7 million on its previously announced $10 million financing initiative, strengthening our liquidity position and providing for further development of the business," concluded Mr. Sood.
As previously disclosed by the Company, on December 24, 2011, the government of the DRC promulgated a new law, "Loi Portant Principes Fondamentaux Relatifs a L'Agriculture" (the "Agriculture Law"), for the stated purposes of developing and modernizing the country's agricultural sector. Certain agribusinesses in the DRC have raised concerns that the Agriculture Law may impede existing and new foreign investment in the agricultural sector. Feronia will continue to seek clarification on the implications of this legislation from local counsel and government in the DRC. If the Agriculture Law is interpreted by the DRC government to apply to the existing concession rights held by the Company and the Agriculture Law is not amended, it could have a material and substantial adverse effect on the value of its business and its share price. In such case, Feronia may be required to sell or otherwise dispose of a sufficient interest in its operating subsidiaries so as to ensure that it meets local ownership requirements. There is no assurance that such a sale or disposition would be completed at fair market value or otherwise on acceptable terms to Feronia.
The following table provides a summary of palm fruit production and CPO:
Operating costs for the second quarter of 2012 were $2,341,000, a decrease of $301,000, or 11% compared to the second quarter of 2011 and decreased by $168,000 or 3% for the six months ended June 30, 2012 compared to the six months ended June 30, 2011. The decrease resulted from the following:
Cash Flows and Liquidity
The cash balance was $5,767,000 as at June 30, 2012, compared to $13,521,000 as at December 31, 2011. The decrease in cash balance of $7,754,000 was a result of net loss (excluding non-cash items) of $4,577,000 and capital expenditure of $5,698,000, partially offset by an increase in working capital of $2,481,000 and the issue of shares for cash of $40,000.
For the first six months of 2012, working capital movements resulted in cash inflows of $2,481,000 (cash outflows of $603,000 for the first six months of 2011), driven by increases in payables of $643,000 and decreases in inventory of $234,000, receivables of $688,000 and prepaid expenses of $916,000.
Investing activities resulted in cash outflows of $5,698,000 for the first six months of 2012 (cash outflows of $3,841,000 in the first six months of 2011).
Cash inflows from financing activities were $40,000 in the first six months of 2012 (cash inflows of $27,493,000 in the first six months of 2011).
Major outstanding anticipated cash requirements are related to:
Non-Executive Director Compensation
Due to various factors including the dilution that shareholders of the Company would suffer at current levels, the board of directors has determined for the foreseeable future to compensate non-executive directors and committee members in cash instead of stock options. The anticipated annual fees are expected to be approximately $175,000 which are in line with a relative comparator group. The Company continuously reviews its compensation policies with a view of minimizing the impact to shareholders and increasing the alignment of all parties with the share price.
Non-GAAP Financial Measures
Gross margin is not a financial measure recognized by IFRS and does not have a standardized meaning prescribed by IFRS. The Company's method of calculating gross margin may differ from other methods used. Gross margin is presented in this press release as additional information regarding the Company's financial performance. Gross margin has been calculated by deducting cost of sales from revenue.
About Feronia Inc.
Feronia operates large-scale commercial oil palm plantations and has commenced an arable farming operation in the DRC. The Company, through its subsidiaries, holds concessions on land which is owned by the DRC government and on which its oil palm plantation and farming operations take place. The Company uses modern agricultural practices to operate and develop its oil palm plantations and arable farming. Feronia believes in the immense agricultural potential of the DRC for high-quality edible oils, oil derivatives and foodstuffs given the suitability of its climate and soil and the availability of a skilled workforce. The Company's management team is comprised of experienced administrative executives and senior agriculturalists with extensive experience in managing both plantations and large-scale mechanized farming operations in emerging markets. Feronia is committed to sustainable agriculture, environmental protection and providing jobs and economic growth for local communities. For more information please see .
Cautionary Notes
Except for statements of historical fact contained herein, the information in this press release constitutes "forward-looking information" within the meaning of Canadian securities law. Such forward-looking information may be identified by words such as "anticipates", "plans", "proposes", "estimates", "intends", "expects", "believes", "may", "will" and include without limitation, statements regarding proposed capital expenditure; the Company's plan of operations and comparative advantages; plans regarding sowing rice and replanting oil palms; improvements in harvesting and collection; and positive trends regarding OERs. There can be no assurance that such statements will prove to be accurate; actual results and future events could differ materially from such statements. Factors that could cause actual results to differ materially include, among others: risks related to foreign operations (including various political, economic and other risks and uncertainties), the interpretation and implementation of the Agriculture Law, termination or non-renewal of concession rights or expropriation of property rights, political instability and bureaucracy, limited operating history, lack of profitability, lack of infrastructure in the DRC, high inflation rates, limited availability of debt financing in the DRC, fluctuations in currency exchange rates, competition from other businesses, reliance on various factors (including local labour, importation of machinery and other key items and business relationships), the Company's reliance on two refining factories and one major customer, lower productivity at the Company's plantations and arable farming operations, risks related to the agricultural industry (including adverse weather conditions, shifting weather patterns, and crop failure due to infestations), a shift in commodity trends and demands, vulnerability to fluctuations in the world market, the lack of availability of qualified management personnel and stock market volatility. Most of these factors are outside the control of the Company. Investors are cautioned not to put undue reliance on forward-looking information. Except as otherwise required by applicable securities statutes or regulation, the Company expressly disclaims any intent or obligation to update publicly forward-looking information, whether as a result of new information, future events or otherwise.
Neither the TSX Venture Exchange nor its regulation services provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.
Contacts:
Feronia Inc.
Ravi Sood
Executive Chairman
(416) 907-2026
Feronia Inc.
Bill Dry
CEO
44 (0) 7887 525 046
Themen in dieser Pressemitteilung:
Unternehmensinformation / Kurzprofil:
Datum: 28.08.2012 - 22:38 Uhr
Sprache: Deutsch
News-ID 178441
Anzahl Zeichen: 0
contact information:
Town:
TORONTO, ONTARIO
Kategorie:
Farming
Diese Pressemitteilung wurde bisher 272 mal aufgerufen.
Die Pressemitteilung mit dem Titel:
"Feronia Inc. Reports Second Quarter 2012 Results"
steht unter der journalistisch-redaktionellen Verantwortung von
Feronia Inc. (Nachricht senden)
Beachten Sie bitte die weiteren Informationen zum Haftungsauschluß (gemäß TMG - TeleMedianGesetz) und dem Datenschutz (gemäß der DSGVO).
