TORONTO, ONTARIO – May 27, 2019: Feronia Inc. (“Feronia” or the “Company”) (TSX-V: FRN) today released its unaudited financial results for the three months ended March 31, 2019 (“Q1 2019”). All amounts in this release are expressed in US dollars unless otherwise indicated.
Q1 2019 Highlights
Produced 38,203 tonnes of fruit (Q1 2018: 32,405 tonnes), a year-over-year increase of 18%
Produced 8,261 tonnes of Crude Palm Oil (“CPO”) (Q1 2018: 6,549 tonnes), a year-over-year increase of 26%
Revenue of $7.3 million (Q1 2018: $5.4 million), a year-over-year increase of 35%, primarily from the sale of 9,272 tonnes of CPO at an average price of $710 per tonne (Q1 2018: 6,571 tonnes at $776 per tonne)
Net loss for Q1 2019 of $1.4 million (Q1 2018 net profit: $0.6 million)
EBITDA for Q1 2019 of $1,087,000 (Q1 2018 EBITDA loss: $15,000)
Entered into second unsecured subordinated short term loan facility of up to $9 million with existing shareholders
Xavier de Carnière, Chief Executive Officer of Feronia Inc. commented: “Whilst supply chain disruptions, caused by uncertainty around the DRC elections, impacted operations in January, CPO production for Q1 2019 was still 26% above last year. This is partly because of an 18% improvement in fresh fruit bunch production, but mostly because of a dramatic improvement in our Oil Extraction Rate which is a direct result of our investments in high quality industrial equipment, and hard work to install best practices across our whole team; from the fields to the mills.
“Palm oil prices are still disappointing, although aligned with our budget expectations. It appears that we are gradually coming out of a prolonged period of low prices which, if history tells us anything, will have impacted global investment in the industry, including in new planting and fertilizer application. If that is the case, it will have a negative impact on supply over the coming months and years, which will positively impact international prices, which would be most welcome but is not essential for this business to thrive.
“As highlighted in our 2018 results, our operations are much more predictable and a great deal of the investment needed to make this business profitable has been made. Nonetheless, funding is still challenging but we are working with our major shareholders to navigate this, are facing less of a headwind and feel that the seas are calming. With sailing now becoming far more comfortable, I feel that the time is right to step down as Captain and to hand over control. It has been an honour to lead this magnificent company through very challenging conditions and I wish everyone involved ‘un bon voyage’.”
For further information please contact:
Xavier de Carniere Chief Executive Officer, Feronia Inc. 44 (0)7468 697 658 firstname.lastname@example.org www.feronia.com
Paul Dulieu Director of Communications and Corporate Development, Feronia Inc. 44 (0)7554 521421 email@example.com www.feronia.com
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.
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 thousands of 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 108 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 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 has extensive experience in managing both plantations and farming operations in emerging markets.
For more information please see 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, 2018, 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.
The Company now reports EBITDA (earnings before deducting interest, taxes, depreciation and amortization) and EBITDA per share as, whilst both are non-GAAP measures, the Company believes that EBITDA is useful additional information to management, the Board and investors as it provides an indication of the operational results generated by its business activities prior to taking into consideration how those activities are financed and taxed and also prior to taking into consideration asset depreciation and amortization and it excludes items that could affect the comparability of our operational results and could potentially alter the trends analysis in business performance. Excluding these items does not necessarily imply they are nonrecurring, infrequent or unusual. EBITDA is also used by some investors and analysts for the purpose of valuing a company. Investors are cautioned that EBITDA should not be construed as an alternative to operating earnings or net earnings determined in accordance with IFRS as an indicator of the Company’s financial performance or as a measure of the Company’s liquidity and cash flows. EBITDA does not take into account the impact of working capital changes, capital expenditures, debt principal reductions and other sources and uses of cash, which are disclosed in the consolidated statements of cash flows.
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