Feronia Inc. Reports Q3 2015 Results
TORONTO, ONTARIO--(Marketwired - Nov. 30, 2015) - Feronia Inc. ("Feronia" or the "Company") (TSX VENTURE:FRN) today released its financial results for the three and nine months ended September 30, 2015. All amounts in this release are expressed in US dollars unless otherwise indicated.
Q3 2015 Highlights
- Produced 24,020 tonnes of fruit (Q3 2014: 16,725 tonnes), a year-over-year increase of 43.6%
- Produced 4,496 tonnes of Crude Palm Oil ("CPO") (Q3 2014: 3,071 tonnes), a year-over-year increase of 46.4%
- Fresh fruit bunch ("FFB") yield of 2.20 tonnes per mature hectare ("ha") (Q3 2014: 1.74 tonnes per mature ha)
- Oil extraction rate ("OER") of 18.7% (Q3 2014: 18.4%)
- Revenue of $0.8 million (Q3 2014: $2.9 million) primarily from the sale of:
- 1,057 tonnes of CPO at an average price of $661 per tonne (Q3 2014: 3,040 tonnes at $768 per tonne)
- Net loss of $10.8 million or $0.20 per share (Q3 2014: net loss of $7.3 million or ($0.13) per share)
- Agreement signed for the purchase, installation & commissioning of a BioCube1 biodiesel generator at Yaligimba
- Closed financing of $983,000 principal amount of debentures issued to the African Agriculture Fund through its subsidiary Golden Oil Holdings Limited ("GOHL")
- Entered in to a contract in September 2015 with a new refining customer for the supply of 6,393 tonnes of CPO with $3.0 million deposit paid in advance. Sales will be recognised as the CPO is delivered in Q4 2015
- On November 5, 2015, the board of directors resolved to issue up to $17.5 million of secured convertible debentures ("Debentures") and entered into subscription agreements for private placement of Debentures with CDC Group plc, the UK Government's Development Finance Institution and GOHL. Closed a first tranche in the principal amount of US$10 million with CDC and a second tranche in the principal amount of $1.8 million with GOHL
- BioCube1 biodiesel generator is now at Yaligimba and due to be operational by the end of the December 2015. The biofuel it will produce will be used by the Company in its vehicles and electricity generators
As indicated previously the Company has been seeking financing to meet its long term funding requirements, which it is currently in the process of finalising. While this process continues, it is the Board's belief that the 2015 debenture holders will not call for repayment of the debentures in the event they have not been converted to equity by the January 22, 2016 maturity date.
Xavier de Carnière, Chief Executive Officer of Feronia Inc., commented:
"In Q3 2015 we continued to demonstrate excellent operational progress and we remain in line with our targets. Signing a substantial contract with a new major customer is a huge step forward for the Company and an important development towards achieving our operational goals, reducing risk and helping improve operational efficiency.
"World CPO prices and the 'grey import' of finished products in to the DRC from Asia have impacted our average selling prices this year but we believe both of these trends are reversing and that there are a number of indicators which, together, suggest that global CPO prices will soon begin to rise.
"The downward global price trend of CPO has been in place for more than three years. During this time, the capability of many operators to invest in fertilizers has been greatly reduced and there is a high likelihood that new planting and re-planting activities are considerably lower than previous years' averages. Both of these factors are likely to impact future global CPO production levels. While the effect of this year's El Niño remains uncertain at this stage, it is likely to further reduce global CPO production, which we believe will result in an upturn in palm oil prices in the medium term.
"However, the global CPO price rising is not something we are wholly reliant on, nor something on which we are willing to speculate. Instead, we remain focused on patiently working towards our goals, including delivering on our social and environmental targets and commitments, with the loyal and undeterred support of our two largest shareholders, so as to rebuild this business into the great business we all believe it will become, regardless of prevailing global CPO prices."
About Feronia Inc.
- Feronia is an agribusiness operating in the Democratic Republic of the Congo (DRC).
- At the heart of Feronia lies a long established palm oil business, Plantations et Huileries du Congo (PHC), which has three remotely located plantations; Lokutu, Yaligimba and Boteka. We also have an arable farming operation which grows and processes rice.
- When Feronia acquired its palm oil business from Unilever in 2009, it had suffered from years of underinvestment and considerable disruption caused by conflict in the DRC. Our initial focus has been on rebuilding the business and resuming production to secure its future and the livelihoods of the 3,800+ people we directly employ.
- Feronia's plantations produce crude palm oil (CPO) and palm kernel oil (PKO). CPO is part of the staple and traditional diet of the Congolese and, with our products sold locally in the DRC, we are well placed to help decrease reliance on imports and increase food security and quality.
- Feronia prides itself on being the guardian of our 104 year-old palm oil business and its employees, communities, and environment. We have a long term commitment to improve the living and working environment of our employees and their communities and are committed to sustainable agriculture, environmental protection and community inclusion. Feronia has in place an Environmental and Social Action Plan which is focused on implementing environmental and social best practice and improving social infrastructure.
- Feronia is working towards certification by the Roundtable for Sustainable Palm Oil (RSPO) and is implementing IFC/World Bank standards for environmental and social sustainability. Our oil palm replanting programme is brownfield in nature - replacing old palms with new - and it has no reliance on deforestation.
- Feronia's management team is comprised of senior agriculturalists with extensive experience in managing both plantations and farming operations in emerging markets.
- For more information please see www.feronia.com.
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 Management's discussion and Analysis for the year ended December 31, 2014, a copy of which is available on the Company's SEDAR profile at www.sedar.com. 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.
(November 30, 2015 - 8:50 AM EST)
News by QuoteMedia