Feronia Inc. Reports Q3 2013 Results
(firmenpresse) - TORONTO, ONTARIO -- (Marketwired) -- 11/27/13 -- Feronia Inc. ("Feronia" or the "Company") (TSX VENTURE: FRN) today released its unaudited financial results for the three and nine months ended September 30, 2013. All amounts in this release are expressed in US dollars unless otherwise indicated.
Q3 2013 Highlights and Developments
Subsequent Events
Bill Dry, CEO of Feronia commented: "We continue to make considerable progress in our oil palm operation with FFB and CPO production levels in the quarter dramatically improved over Q3 2012. The new Yaligimba mill coming into operation in October and recent surpassing of our 2013 replanting target of 5,000 hectare are both fantastic achievements which were only possible because of our skilled and dedicated workforce in the DRC. Feronia now has over 21,000 hectares of oil palm in the ground and a working CPO mill at each of its plantations. These represent great strides in the rehabilitation of our business.
"We have also made progress in developing our arable business and are encouraged by the growing number of high quality local customers and the considerable amount of interest being shown in our produce."
About Feronia Inc.
Operational Summary and Key Metrics by Division
Palm Oil Operations
The following table shows key data relating to operations at Plantations et Huileries du Congo S.c.A.R.L ("PHC") as at and for the nine months ending September 30, 2013:
The following tables show key data relating to PHC's assets and infrastructure as at September 30, 2013.
Key Developments
Arable Farming 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 whilst investing in new plantings and the required processing capacity. Having met and surpassed its annual 5,000 hectare replanting target for 2013 in October 2013, the Company is confident that it can continue to meet its replanting objectives. The new Yaligimba palm oil mill commenced production of CPO in October 2013 and now provides the Company with access to an additional 3,757 hectares of mature oil palms for the production of CPO, an increase of 62.1% on the area previously available for commercial production. The Yaligimba mill allows the Company to maximise production from legacy plantings and provides substantial excess processing capacity and expansion potential to accommodate anticipated production from its current aggressive replanting programme.
The Company has also made progress in establishing commercially viable rice yields at its arable operation, has established a pricing formula, is making sales to a growing number of high quality local counterparties and is experiencing considerable interest in its produce. The Company continues to evaluate how to prudently expand its arable farming operations and is also engaged with a number of parties who are developing strategies to advance arable farming in the region including smallholder engagement programmes.
In summary, the key objectives of the Company for the remainder of 2013 are as follows:
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. Feronia continues 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. Please refer to the Company's Management Discussion and Analysis for the three months ended September 30, 2013 available on for a full discussion on the Agriculture Law.
Financial Discussion - Three and nine months ended September 30, 2013
Revenue and Gross Margin
Total revenues for Q3 2013 were $2,282,000, a 7% increase on Q3 2012 revenues of $2,143,000 and arose because of:
Total revenue for the nine months ended September 30, 2013 was $5,676,000 a 7% reduction from the same period in 2012 (nine months to September 30, 2012: $6,101,000) and arose because of:
The following table provides a summary of palm fruit production and CPO:
Selling, General and Administrative Costs
Selling, general and administrative costs for Q3 2013 of $2,388,000 were $173,000 lower than in Q3 2012 (Q3 2012: $2,561,000), a decrease of 7%. The decrease was predominantly a result of professional fees in Q3 2013 being $173,000 lower than in Q3 2012.
Selling, general and administrative costs for the nine months ended September 30, 2013 of $7,433,000 were $169,000 higher than in the same period in 2012, a 2% increase (nine months to September 30, 2012: $7,264,000). The increase was predominantly a result of an increase of salary and other general and operating expenses of $920,000, offset by a reduction in consultancy, professional fees and share based payment of $751,000.
CASHFLOWS AND LIQUIDITY
The cash balance at September 30, 2013 was $463,000 compared to $1,260,000 as at December 31, 2012. The reduction in the cash balance of $797,000 was a result of a net cash loss from operations of $8,163,000, capital expenditure of $5,933,000 and an increase in working capital of $1,008,000 offset by the issue of shares for cash of $14,393,000.
The cash outflow attributable to the increase in working capital during the nine months to September 30, 2013 of $1,008,000 (nine months to September 30, 2012: Cash inflow of $2,491,000) comprised of an increase in accounts receivable of $727,000, a decrease in inventory of $677,000, a decrease in accounts payable of $1,399,000 and a decrease in prepayments of $442,000.
Cash inflows from financing activities during Q3 2013 were $Nil (Q3 2012: $6,846,000). Financing activities for the nine months to September 30, 2013 totaled $14,393,000 (nine months to September 30, 2012: $6,886,000).
Investing activities resulted in cash outflows of $5,933,000 for the nine months ended September 30, 2013 (nine months to September 30, 2012: $9,216,000).
Cash Used in Operating Activities
LIQUIDITY AND CAPITAL RESOURCES
As at September 30, 2013, the Company had cash totalling $463,000.
The Company recorded net cash outflows in operations and investing activities for the 2012 calendar year and it is probable that this will continue for an additional few years as the Company continues to make significant investments in equipment and infrastructure activities necessary to commercialize its products. Feronia's actual funding requirements will vary based on the factors noted above and its relationships with lead customers and strategic partners.
On November 8, 2013 and November 15, 2013, the Company completed the first and second tranches, respectively, of a private placement financing of Common Shares for aggregate gross proceeds of $25 million. Pursuant to the financing, the Company issued an aggregate of 261,195,050 Common Shares at a price of CDN$0.10 per share.
On November 8, 2013, the Company also entered into a convertible loan facility with CDC Group plc ("CDC"), pursuant to which CDC will make available an unsecured non-revolving term loan (the "ESG Facility") in the maximum amount of $3.6 million at an annual interest rate of 12% for a term of five years. The funds available under the ESG Facility are required to be used by the Company to support the implementation of an Environmental and Social Action Plan developed jointly with CDC. The principal under the ESG Facility will be convertible into Common Shares on the maturity date and in certain other circumstances at a rate of CDN$0.24 per common share (subject to customary adjustment provisions). Subject to the approval of the TSX Venture Exchange (the "TSXV"), the interest payable under the ESG Facility will be convertible into Common Shares at a rate equal to the greater of CDN$0.24 and the Discounted Market Price (as defined in TSXV policy) at the time of conversion.
The proceeds are being used by the Company for working capital and capital expenditure purposes.
Continuing operations of Feronia are dependent upon its ability to continue to raise adequate financing and to commence profitable operations in the future. There can be no assurance that the Company will be able to continue raising adequate financing or commence profitable operations in the future. See "Risks and Uncertainties" below.
Major outstanding anticipated capital expenditure cash requirements (other than expenditures for oil palm rehabilitation and planting and the implementation of the Company's ESAP) as at the date of this press release relate to work completed on the new oil palm mill at Yaligimba (estimated to be $450,000) but not yet paid.
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.
RISKS AND UNCERTAINTIES
The Company is subject to various business, financial and operational risks that could materially adversely affect the Company's future business, operations and financial condition and could cause such future business, operations and financial condition to differ materially from the forward-looking statements and information contained in this press release. For a more comprehensive discussion of the risks faced by the Company, please refer to the Company's annual management's discussion and analysis for the year ended December 31, 2012, available at .
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" and "will". 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 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
852 9829 8376
Feronia Inc.
Bill Dry
CEO
44 (0) 7887 525 046
Feronia Inc.
Paul Dulieu
Investor Relations
44 (0) 7554 521421
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Datum: 27.11.2013 - 13:00 Uhr
Sprache: Deutsch
News-ID 320749
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contact information:
Town:
TORONTO, ONTARIO
Kategorie:
Farming
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