Third Quarter and Year-to-Date 2010 Financial Highlights:
Net loss was $2,989,901 for the quarter and $6,389,746 YTD.
Reverse-takeover costs of $1,395,331 were fully expensed in the third quarter.
Diluted EPS for the nine-month period was negative $0.10.
Cash balance as at September 30, 2010 was $14,669,222.
“We are pleased to report that Feronia continues to track according to plan for 2010. Revenue is up on a quarter-over-quarter and year-over-year basis and we have met our key operational targets. During the quarter we completed the listing of our shares on the TSX Venture Exchange and a substantial equity financing to fund the rehabilitation of our oil palm plantations and the growth of our arable farming division. Excluding the costs associated with completing the listing, our quarterly operating loss was down substantially. Following the completion of the financing in September, Feronia’s current business plan is well funded and in the fourth quarter the Company has made several key investments in its oil palm plantations and arable farming operations as part of its aggressive growth programme,” said James Siggs, CEO of Feronia.
During the third quarter, Feronia’s revenue was $1,290,793, an increase of 23% from $1,051,633 in the second quarter. The YTD sales of $3,027,263 consist principally of palm oil ($2,758,098) and seeds ($267,654).
During the third quarter, Feronia produced approximately 6,200 tonnes of palm fruit which were processed to produce 1,228 tonnes of Crude Palm Oil, representing an increase of approximately 400% on a year-over-year basis. As at September 30, 2010, Feronia had 15,285 hectares of oil palm planted, an increase of 896 hectares since the beginning of the year.
Selling, General and Administration Expenses
SG&A expenses increased to $2,748,173 in the third quarter of 2010 compared to $2,188,017 in the second quarter. This was mainly due to the reverse-takeover costs of $1,395,331 being expensed in the quarter. Net Loss for the Period
The net loss for the period increased to $2,989,901 in the three months ended September 30, 2010 compared to $2,008,371 in the second quarter. However, excluding the costs of $1,395,331 associated with the reverse takeover, the loss would have been $1,594,570, a significant quarter-over-quarter improvement.
Capital expenditures in the third quarter totaled $1,423,670 and the major items were:
$1,077,740 invested in the rehabilitation of the palm oil mills. The total cost of this project is $2,180,000.
$320,790 invested in the replanting programme in the oil palm estates.
Recent Developments by Business Segment
Palm Oil Operations:
Palm oil prices have rallied sharply with the Rotterdam benchmark price reaching a recent high of US$1,150 on November 15, 2010.
An order has been received for 300,000 oil palm seeds for delivery in 2011 from a West African operator.
The Company has planted 896 hectares of oil palm year-to-date, tracking its 1,000 hectares year-end target.
Arable Farm Operations:
Land preparation is well advanced, with 300 hectares of abandoned farmland reclaimed and ready for cultivation.
Global prices for cereals and bean crops have increased substantially while local prices in the markets served by the Company have similarly strengthened.
Key capital equipment such as tractors, combines, sowing equipment and a grain drying installation have been purchased and are expected to arrive on site in January 2011 in time for the first harvest of edible beans.
“With the completion of the share listing and substantial equity financing in September of this year, Feronia has achieved a significant milestone in its development” said Ravi Sood, Chairman of Feronia Inc. “The Company now has the capital required to progress the rehabilitation of its oil palm plantations and its large-scale mechanized arable farming operations. We look forward to providing shareholders with regular updates on our progress in new plantings and production from both our oil palm plantations and mechanized farming operations.”
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.
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