R.E.A. Holdings plc: change to board of directors and trading update

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 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: [phone] 
 
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)