FERONIA INC. REPORTS Q2 2016 RESULTS
VANCOUVER, BRITISH COLUMBIA – August 26, 2016: Feronia Inc. (“Feronia” or the“Company”) (TSX-V: FRN) today released its financial results for the three and sixmonths ended June 30, 2016. All amounts in this release are expressed in US dollarsunless otherwise indicated.
Q2 2016 Highlights
- Processed 35,560 tonnes of Fresh Fruit Bunches (“FFB”) (Q2 2015: 23,350tonnes), a year-over-year increase of 52%
- Produced 6,968 tonnes of Crude Palm Oil (“CPO”) (Q2 2015: 4,534 tonnes), ayear-over-year increase of 54%
- Average oil extraction rate of 19% (Q2 2015: 19%)
- Revenue of $3.9 million (Q2 2015: $3.5 million) primarily from the sale of 5,124 tonnes of CPO at an average price of $661 per tonne (Q2 2015: 4,004 tonnes at$787 per tonne)
- Net losses of $4.5 million (Q2 2015 net profit: $0.2 million); the differencebeing largely driven by the non-cash change in the value of convertibledebentures with an expense of $3.1 million in Q2 2016 (Q2 2015 gain: $4.6million)
- Completed first drawdown of $15 million from secured term facility agreementand, concurrent with the first drawdown, $31.33 million principal amount of Debentures and $2.7 million of accrued and unpaid interest converted into 291,693,813 common shares
Xavier de Carnière, Chief Executive Officer of Feronia Inc. commented:”Operations continued apace in the second quarter, our peak period, with impressiveand expected increases in production resulting in the Company meeting itsproduction targets.“The new boiler and turbine at Lokutu are currently being commissioned; which, oncecomplete, will have a considerable impact on production, operational capacity andefficiency at Lokutu. Such projects are important to the Company as they translateinto progressively improved performance and cost savings which will help us achieveour long term goals.
“Whilst operational improvements and performance are naturally important, thewider positive effects that the ongoing resuscitation of this business has on the areasin which we operate are equally so. The majority of our expenditures relate to thepayment of salaries, local services and taxes, all of which greatly contribute to local2development. We are seeing increased economic activity around our operations,including the opening of new shops, a growing number of houses with solar panelsand a wider availability of goods at lower prices. Improved operational performancealso helps us in our ability to deliver an ambitious and extensive environmental andsocial programme.
“It is worth noting that our operational objectives and our environmental and socialobjectives are intrinsically interwoven. We will not succeed operationally withoutensuring we deliver on our social and environmental commitments, and we will notsucceed in delivering our environmental and social programme if we do not succeedoperationally. It is not easy, nor will it be quick. We recognize and accept thescrutiny we are under and we are fully committed to achieving all of our objectivesas we continue to rebuild this business. Seeing not just our own plantations but thesurrounding regions and beyond coming back to life is our greatest reward.”
For further information please contact:
Xavier de Carniere
Chief Executive Officer, Feronia Inc.
44 (0)7468 697 658
Director of Communications & CorporateDevelopment, Feronia Inc.
44 (0)7554 521421
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 operationwhich 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 byconflict in the DRC. Our initial focus has been on rebuilding the business andresuming 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 ourproducts sold locally in the DRC, we are well placed to help decrease relianceon imports and increase food security and quality.
- Feronia prides itself on being the guardian of our 105 year-old palm oilbusiness and its employees, communities, and environment. We have a longterm commitment to improve the living and working environment of ouremployees and their communities and are committed to sustainable agriculture, environmental protection and community inclusion. Feronia has inplace an Environmental and Social Action Plan which is focused on3implementing environmental and social best practice and improving socialinfrastructure.
- Feronia is working towards certification by the Roundtable for SustainablePalm 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 ondeforestation.
- Feronia’s management team is comprised of senior agriculturalists withextensive experience in managing both plantations and farming operations inemerging markets.
- For more information please see www.feronia.com
Except for statements of historical fact contained herein, the information in this pressrelease constitutes “forward-looking information” within the meaning of Canadiansecurities 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 beaccurate; actual results and future events could differ materially from suchstatements. 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 implementationof the “Loi Portant Principes Fondamentaux Relatifs A L’Agriculture”, termination ornon-renewal of concession rights or expropriation of property rights, politicalinstability and bureaucracy, limited operating history, lack of profitability, lack ofinfrastructure in the DRC, high inflation rates, limited availability of debt financing inthe DRC, fluctuations in currency exchange rates, competition from other businesses,reliance on various factors (including local labour, importation of machinery andother key items and business relationships), the Company’s reliance on one majorcustomer, lower productivity at the Company’s plantations and arable farmingoperations, risks related to the agricultural industry (including adverse weatherconditions, shifting weather patterns, and crop failure due to infestations), a shift incommodity 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 theheading “Risks and Uncertainties” in Feronia’s Management’s discussion and Analysisfor the year ended December 31, 2015, a copy of which is available on theCompany’s SEDAR profile at www.sedar.com. Most of these factors are outside thecontrol of the Company. Investors are cautioned not to put undue reliance onforward-looking information. Except as otherwise required by applicable securitiesstatutes or regulation, the Company expressly disclaims any intent or obligation toupdate 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 termis defined in the policies of the TSX Venture Exchange) accepts responsibility for theadequacy or accuracy of this release.