FERONIA INC. REPORTS THIRD QUARTER 2010 RESULTS
TORONTO, ONTARIO – May 2, 2011: Feronia Inc. (“Feronia” or the “Company”) (TSX-V: FRN) today released its audited annual financial results for the year ended December 31, 2010. All amounts in this release are expressed in US dollars unless otherwise indicated.
James Siggs, CEO of Feronia, commented: “We are pleased to report that Feronia continued to track according to plan in 2010. As expected, palm oil production was down on a quarter-over-quarter basis in the last quarter of 2010 due to the normal seasonality of production. However on a year-over-year basis, production was up and we have met our key operational targets.”
Fourth Quarter and 2010 Financial Highlights:
- Crude palm oil production increased by 31% compared to 2009.
- EBITDA was negative $244,580 for the quarter and negative $6,160,009 for the year, an improvement from negative $10,828,544 for the year 2009.
- Net loss was $139,508 for the quarter and $6,529,254 for the year compared to a loss of $10,872,281 for the year 2009.
- RTO costs of $1,343,940 were fully expensed in the year.
- Basic and diluted EPS for the year was negative $0.09 compared to negative $0.70 for 2009.
- Cash balance as at December 31, 2010 was $8,907,686 compared to $477,617 as at December 31, 2009.
Achievement of Milestones in 2010:
During the year we completed the listing of our shares on the TSX Venture Exchange and an equity financing of $16,825,706 to fund the rehabilitation of our oil palm plantations. Excluding the costs associated with completing the listing, our yearly operating loss was down substantially compared to 2009. “Following the completion of the financings in September 2010 and March 2011, Feronia’s current business plan is well funded. In the fourth quarter of 2010 and the first quarter of 2011, the Company has made several key investments in its oil palm plantations and arable farming operations as part of its aggressive growth program,” said Mr. Siggs.
During the fourth quarter, Feronia’s revenue was $877,939, a decrease of 32% from $1,290,793 in the third quarter.
During the year, Feronia produced approximately 30,420 tonnes of palm fruit which were processed to produce 4,952 tonnes of Crude Palm Oil (“CPO”), representing an increase of approximately 31% on a year-over-year basis. As at December 31, 2010, Feronia had 16,868 hectares of oil palm planted including 1,027 hectares of replanting in the year.
Selling, General and Administration Expenses
SG&A expenses decreased to $7,919,058 in 2010 compared to $11,137,465 2009 which included a write down of $10,569,288 on the fair value of the assets on the acquisition of PHC.
Net Loss for the Year
The net loss for the fourth quarter of 2010 was $139,508 compared to a loss of $2,989,901 in the third quarter of 2010. The net loss for 2010 was $6,529,254 compared to $10,872,281 in 2009. However, the results for 2009 include only four months post acquisition of Feronia’s subsidiary Plantations et Huileries Du Congo S.C.A.R.L, whereas the 2010 results include a complete year and also include the costs associated with the reverse takeover transaction.
Capital expenditures in the fourth quarter increased by $1,544,290, totalling $5,426,933 for the year. The major items were as follows:
- Rehabilitation of the palm oil mills to increase oil extraction rates and operating efficiencies.
- Replanting programme of 1,027 hectares on the oil palm estates.
- Development of the arable farm, reclaiming 600 hectares.
Recent Developments by Business Segment
Palm Oil Operations:
- Global spot CPO prices have remained firmly over $1000 per tonne having reached a high of $1,335 in the first quarter of 2011.
- An order has been received from a West African operator for 756,000 oil palm seeds for delivery in 2011.
- The Company planted 1,027 hectares in the year, over its annual target of 1,000 hectares.
Arable Farm Operations:
- Land preparation is well advanced, with 1,396 hectares of abandoned farmland reclaimed and ready for cultivation at the end of March 2011.
- Key capital equipment such as tractors, combines, sowing equipment and a grain drying installation have been purchased and delivered to site in Q1 2011 in time for the first commercial sowing of edible beans.
- 111 hectares of rice were planted in March 2011 in order to provide seed for the major sowing in September 2011.
“Feronia continues to expand its operations according to plan,” said Ravi Sood, Chairman of Feronia. “Having completed a substantial equity issue in the first quarter of 2011, the Company is now able to accelerate the expansion of its oil palm plantations by increasing its planting activities and building a new high throughput palm oil mill earlier than previously budgeted. We anticipate that this will improve overall efficiencies and help reduce production costs. The Company is also progressing the expansion of its arable farming operations and evaluating other related opportunities including the local production of various fertilizers. With the price of food and vegetable oils reaching new highs around the world the commercial opportunity for Feronia and its strategic importance globally continues to grow."
About Feronia Inc.
Feronia Inc. is a large-scale commercial farmland and plantation operator in the Democratic Republic of the Congo (“DRC”). The Company uses modern agricultural practices to operate and develop its oil palm plantations and arable farming business division. Feronia believes in the immense agricultural potential of the DRC for high-quality foodstuffs and edible oils given its ideal climate, excellent soil and highly skilled and experienced workforce. Feronia’s management team is comprised of 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 support for local communities. 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 “plans”, “proposes”, “estimates”, “intends”, “expects”, “believes”, “may”, “will” and include without limitation, statements regarding the stated use of proceeds; plan of operations and comparative advantages; and benefits of this investment. 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, regulatory risks, risks inherent in foreign operations, commodity prices, competition, and investments having no history of operations. 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.