Feronia Inc. Reports 2014 Results
(firmenpresse) - TORONTO, ONTARIO -- (Marketwired) -- 04/27/15 -- Feronia Inc. ("Feronia" or the "Company") (TSX VENTURE: FRN) today released its audited financial results for the year ended December 31, 2014. All amounts in this release are expressed in US dollars unless otherwise indicated.
2014 Highlights
Subsequent Events
Gross loss for the year ended December 31, 2014 was $4,780,000, an increase of $1,885,000 or 65%, compared to the prior year (2013: $2,895,000). This is largely due to a one-off adjustment relating to the impairment of arable land fair value of $497,000, additional fertiliser costs of $606,000 and additional costs relating to the use of heavy fuel in the boiler at Yaligimba of $500,000.
Net loss for the year ended December 31, 2014 of $20,267,000 was $7,402,000 higher than in 2013 (2013, $12,865,000). Of this, $5,202,000 was due to the movement on the gain/loss on the biological assets, which in turn was largely driven by the fall in the three year average price of CPO used in the valuation model. The remainder was mainly due to an increased cost of sale of $6,027,000 offset by a $4,142,000 increase in revenues, both driven by a 59% increase in amount of CPO sold in the year, and the arable land impairment of $497,000.
The higher production levels in 2014 were largely due to the commissioning of the Yaligimba mill and resumption of production at Yaligimba plantation.
Since 2010 the Company has replanted 16,707 ha of new trees, of which 1,027 ha, or 6%, were producing in 2014. As a result of the high percentage of immature and young palms in the Company's plantation, the average yield per hectare is low. This impacts all key operating metrics including cost of goods sold and gross margin. The portfolio of immature and young palms is the Company's core asset. Young plants have a negative contribution to operating results and are a key factor in current gross losses. These losses, which are in line with Company expectations, are expected to reverse as the trees mature and more hectares come into production.
FFB yield per hectare for the year ended December 31, 2014 was 7.4 tonnes/ha compared to 7.1 tonnes/ha in 2013. Rehabilitation work undertaken at Yaligimba, which included extensive weeding of mature hectares, began to be reflected in an improvement in operational performance in Q4 2014. FFB yields per hectare at Yaligimba are now broadly in line with those at Lokutu.
The following three factors currently have an impact on overall performance of the plantations:
The Company realized an OER for the year ended December 31, 2014 of 18.4% (year ended December 31, 2013: 18.4%) but believes that the installation of the new boiler at Lokutu in 2015 and ongoing improvements in its operational practices will be reflected in an increase in OER over the next few years. The Company remains confident that an OER similar to those achieved in Southeast Asia is realistic in the medium term.
Over time the Company's cost of production on a per tonne basis is expected to decline substantially. This remains a key objective of the Company.
Ravi Sood, Chairman of Feronia Inc. commented: "2014 was another year of great progress across all key metrics. Although we continue to experience normal course challenges typical of our industry and some challenges unique to the rehabilitation of a 104 year old business in the Democratic Republic of the Congo, we are increasingly seeing the substantial investment in the rehabilitation of our palm oil business reflected in increased production, efficiencies, and economies-of-scale. We expect this trend to continue in the coming years as our large portfolio of young palms matures and increasingly contributes to improving volumes and reducing production costs per tonne.
"In addition to the operational progress we have made this year, the progressive implementation of our Environmental and Social Action Plan ("ESAP") represents considerable achievement for the Company. The ESAP is a roadmap for Feronia to implement environmental and social best practice, improve its social infrastructure, and reach and maintain the highest standards in sustainability and community inclusion. We continue to invest the substantial time, capital, and management attention required to elevate our business to the highest global standards and the results achieved to-date are tangible and will benefit all stakeholders in the long-term."
Xavier de Carniere, Chief Executive Officer of Feronia Inc. added: "Since the beginning of 2014, global palm oil prices have dropped by more than 20%. This situation is having a material impact on all producers, Feronia included. However, having assessed the state of the business in my first 100 days as Chief Executive Officer and seen what has been achieved since Feronia acquired the business in 2009, I am confident that these low prices will not prevent us from achieving our goals in a measured and pragmatic fashion.
"Despite the low global palm oil prices, the DRC has seen several new commercial palm oil processors commence operations during the last year. We believe this is a result of the large and growing demand for CPO products in the DRC and represents a positive development which is now being reflected in stronger pricing; this is a trend we expect to continue."
About Feronia Inc.
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 "Loi Portant Principes Fondamentaux Relatifs A L'Agriculture", 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. Details of the risk factors relating to Feronia and its business are discussed under the heading "Risks and Uncertainties" in Feronia's annual Management discussion and analysis for the year ended December 31, 2014, a copy of which is available on the Company's SEDAR profile at . 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
(647) 987-7663
Feronia Inc.
Paul Dulieu
Investor Relations Manager
44 (0)7554 521421
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Datum: 27.04.2015 - 13:00 Uhr
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News-ID 388644
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