Committed To Sustainability



TORONTO, ONTARIO – April ●, 2015: Feronia Inc. (“Feronia” or the “Company”) (TSX-V: 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

Produced 70,887 tonnes of fruit (2013: 45,015 tonnes), a year-over-year increase of 57%.
Produced 13,010 tonnes of Crude Palm Oil (“CPO”) (2013: 8,269 tonnes), a year-over-year increase of 57%
Increase in revenue of 61% to $10.8 million (2013: $6.7 million) including from the sale of:

  • 11,535 tonnes of CPO at an average price of $799 per tonne (2013: 7,404 tonnes at $844 per tonne)
  • PKO sales of $870,000 (2013: $274,000)

Fresh fruit bunch (“FFB”) yield of 7.4 tonnes per hectare (“ha”) (2013: 7.1 tonnes per ha)
Oil extraction rate (“OER”) of 18.4% (2013: 18.4%)
Environmental and Social Assessment of palm oil operations commenced
Signed new Collective Agreement with the six unions which represent the Company’s 3,600+ employees
Replanted 4,639 ha (2013: 5,007 ha)
Appointed new Chief Executive Officer, Xavier de Carnière
Net loss for the year excluding the gain/loss on biological assets of $18.6 million, an increase of $2.2 million, or 13%, compared to $16.4 million in 2013
Net loss attributable to Feronia including the gain/loss on biological assets was $15.6 million or $0.28 per share, compared to a loss of $10.1 million or $0.33 per share in 2013

Subsequent Events

Entered into subscription agreements for private placement of up to US$16.325 million of secured convertible debentures led by CDC Group plc, the UK Government's Development Finance Institution and including Ravi Sood, Executive Chairman of Feronia Inc. On January 22, 2015, a first tranche of US$7.15 million has closed and subsequent tranches of the offering will close at the option of the majority holders of the Debentures and upon the meeting of certain conditions.

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:

Young age profile of plantation.

The large percentage of immature palms in our plantations will continue to negatively impact our average yield for the next several years. Normal course maturation of our plantations will result in substantially improving yields over time.  

Processing capacity limitations at the Lokutu mill.

The installation of a new boiler at Lokutu in 2015 will facilitate greater throughput at the mill due to higher steam pressure reducing sterilisation times.

Nutrient deficiencies at Boteka Plantation

Fertilizer, ground limestone, and guano have been applied to correct the deficiencies which, combined with a normal course fertilizer and soil maintenance regime, we anticipate will result in yield improvements in 2016.

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 Carnière, 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.

  • 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 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 8,000+ people we directly and indirectly 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

Contact Information:
Feronia Inc.
Ravi Sood
(647) 987-7663

Feronia Inc.
Paul Dulieu
Investor Relations Manager
44 (0)7554 521421