By Elena Vardon
R.E.A. Holdings shares fell on Wednesday after the company said it expects revenue for the first half to be significantly lower on year due to static production volumes and lower selling prices in the period, but sees a more positive outlook in the second half.
At 0828 GMT, shares were down 5 pence, or 8.6%, at 53 pence.
The London-listed palm-oil producer said crude palm oil prices weakened progressively over the six months ended June 30, currently standing at $960 a ton, having opened the year at $1,090 and hit a low of $855 in early June.
The immediate pricing outlook for crude palm oil remains positive however, given slowing production globally, North American crops affecting soybean and canola crops, and sunflower seed exports likely to be constrained by the Russia-Ukraine situation, it said.
Second-half revenue could exceed what it made in the same period the previous year if current prices hold, it said, adding that fresh fruit bunch crops will be second-half weighed as normal. In the first half, it harvested 444,629 tons of first fruit bunch crops and sold 32,345 tons, compared with 14,445 tons from a 448,886 ton harvest a year prior.
For fiscal 2022, the company reported $208.8 million in revenue, of which $108.6 million was recorded in the first half.
It added that it is reviewing its intention to pay the remaining arrears of preference dividend–which amount to 7 pence a share–as its available cash will be reduced due to difficulties linked to the planned refinancing of loans to its stone and coal interests brought about by the weakness in coal prices and stone and sand production start-up costs.
Write to Elena Vardon at [email protected]
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