New Britain Palm Oil Limited : PRELIMINARY RESULTS FOR THE YEAR ENDED 31 DECEMBER

New Britain Palm Oil Limited



27 February 2014

NEW BRITAIN PALM OIL LIMITED

("NBPOL", the "Group" or the "Company")

PRELIMINARY RESULTS FOR THE YEAR ENDED 31 DECEMBER 2013 (UNAUDITED)

New Britain Palm Oil Limited (LSE: NBPO), one of the world's largest fully integrated producers of sustainable palm oil, today announces its unaudited preliminary results for the year ended 31 December 2013.

Financial Results

·      Revenue decreased 17.5% to USD 558.7 million (2012: USD 677.0 million) due to lower prices for palm oil

·      Profit before tax decreased 78.8% to USD 17.3 million* (2012: USD 81.6 million*) excluding the changes in fair value of biological assets under IAS 41 but including the net gains of USD 8.2 million on agricultural products transferred to inventories at balance date.  Including the changes in fair value of biological assets under IAS 41, the statutory profit before tax as reported in the statement of comprehensive income is USD 71.0 million (2012: USD 4.4 million)

·      Net foreign exchange losses of USD 17.5 million (as compared to gains of USD 8.0 million in 2012) including non-cash unrealised exchange losses on restatement of USD borrowings of USD 23.2 million

·      Earnings Per Share attributable to ordinary shareholders decreased 79.4% to USD 7.4 cents* (2012: USD 36.0 cents*)

·      Earnings Before Interest, Tax and Depreciation ("EBITDA") decreased 40.3% to USD 96.8 million* (2012: USD 162.1 million*)

·      Gross margin of 34.4% (2012: 36.6%) reflecting the impact of lower selling prices, although partly offset by cash cost reductions and the significant depreciation in the Papua New Guinea Kina against the US Dollar

·      Average selling price achieved for crude palm oil ("CPO") during the year was USD 868/tonne (2012: USD 1,062/tonne)

·      Average selling price achieved for palm kernel oil ("PKO") during the year was USD 965/tonne (2012: USD 1,337/tonne)

·      As at the year end, the Group had made forward sales of CPO of approximately 76,000 tonnes of its 2014 production at an average price of USD 922/tonne; as at 21 February 2014 the forward sales of CPO of the Group were approximately 121,000 tonnes at an average price of USD 927/tonne

·      Net cash generated from operating activities of USD 142.6 million (2012: USD 141.8 million)

·      Capital expenditure decreased 55.0% to USD 70.7 million (2012: USD 157.2 million)

·      The Group's cost optimisation and efficiency review achieved a circa USD 35 million year-on-year saving with approximately half attributable to freight, fuel and fertilizer and half from reductions in management, labour and general overheads

·      The Group had cash holdings at the end of 2013 of USD 30.9 millionand bank overdrafts plus short term borrowings of USD 22.2 million equating to a net positive cash position of USD 8.7 million (2012: net overdraft position of USD 16.8 million)

·      The Group's total borrowings at the end of 2013 decreased 16.6% to USD 272.6 million (2012: USD 326.7 million)

·      An interim dividend of USD 10 cents per share was paid in November 2013

* IAS 41 is an accounting standard that requires the company to value the oil palm trees over their entire future lifetime of 20 plus years.  The fair value movements year-on-year under IAS 41 are non-cash items and therefore are not used by management when measuring the company's operational performance because they are not reflective of the underlying business. Management believes that the inclusion of these adjusted profitability measures (excluding IAS 41 fair value changes) are useful to investors because they provide a means of evaluating the Group's operating performance and results from period to period on a comparable basis not otherwise apparent when the impact of the changes in fair value of biological assets under IAS 41 is included.  Management also believes that this inclusion is useful in facilitating comparisons between the Group and other companies in the industry, some of whom are not required to comply with IAS 41.  Refer to notes 3 and 4 for a reconciliation of the adjusted measures to those including the impact of IAS 41

Operational Results

·      During the year, a total of 2,085,670 tonnes of fresh fruit bunches ("FFB") were processed (2012: 2,273,081 tonnes), including 589,524 tonnes from smallholders (2012: 684,594 tonnes)

·      The Group's CPO extraction rate for the year was 22.15% (2012: 22.35%)

·      The Group's palm product extraction rate for the year was 27.50% (2011: 27.59%)

·      Total oil production was 507,856 tonnes (2012: 545,207 tonnes), with 462,060 tonnes of CPO produced and 45,796 tonnes of PKO produced (2012: 507,942 tonnes and 37,265 tonnes respectively) - the year-on-year increase in PKO production reflects the contribution from the new kernel crushing plants at the Kula Palm Oil Limited ("KPOL") sites

·      Oil shipments (CPO, PKO and refined oils, excluding sales from the Liverpool refinery) were 517,731 tonnes (2012: 511,015 tonnes)

·      CPO prices traded during the year between USD 785 and USD 935/tonne, starting the year at USD 785/tonne and ending at around USD 900/tonne with current prices trading at approximately USD 933/tonne

·      During 2013 the Group substantially completed its accelerated replanting programme at its subsidiary KPOL resulting in a higher than usual level of immature palm hectarage across the Group (with 13.5% of cultivatable area currently immature). Since 2011 the Group has replanted circa 6,500 hectares, representing 25.0% of the acquired KPOL mature hectarage

·     

·      Seed sales of 6.9 million seeds (2012: 14.7 million seeds)

·      The Liverpool refinery recorded strong EBITDA growth year-on-year driven by gross margin expansion and increased sales volumes

·      In 2013 the Group doubled its refining capacity in Liverpool through commissioning of a second deodoriser. In addition, the Group entered into a supply agreement with Olenex, a joint venture between Archer Daniels Midland (ADM) and Wilmar, ensuring supply chain cooperation and offering the widest range of sustainable and traceable palm oil products to Europe. This arrangement is extremely positive for capacity utilisation and continued volume growth at the refinery

·      The Group entered into a joint venture with SIPEF N.V. and BioSing to develop high yielding F1 hybrid oil palms. The joint venture aims to achieve significant yield and productivity enhancements for the palm oil industry

Antonio Monteiro De Castro, Chairman of New Britain Palm Oil Limited, commented:

"The past year has been very challenging, with palm oil prices remaining subdued for the first half of the year, and akin to 2012, we endured another exceptionally wet first quarter in our biggest production location (West New Britain), which hampered crop harvesting and collection. At most of our production sites, and regionally across South East Asia as a whole, FFB production was reportedly lower than expected in the second half of the year, suggesting this to be a biological yield effect.

The combined effects of lower palm oil prices and lower production has seen the Group's profit before tax (excluding IAS 41 adjustments) drop significantly from USD 81.6 million in 2012 to USD 17.3 million in 2013. On the positive side the Group has made good progress in reducing its US dollar based production costs and this has been coupled with a devaluation of the Papua New Guinea Kina so that we have had both Dollar and Kina related cost reductions.

Looking forward the Group is well positioned to capitalise on an improving palm oil pricing environment with lower production costs and strong demand for sustainable and traceable palm oil products."

Enquiries:

New Britain Palm Oil Limited Nick Thompson (Chief Executive Officer) Alan Chaytor (Executive Director) Amir Mohareb (Chief Financial Officer) Ben Oakley (Corporate Development and IR)	Tel (UK): [phone] Tel (Singapore): [phone]
Newgate Communications (PR Adviser) James Benjamin Clotilde Gros Georgia Lewis	Tel: [phone] Email:[e-mail]

Notes to editors:

NBPOL is a large scale integrated industrial producer of sustainable palm oil in Australasia, headquartered in Papua New Guinea ('PNG'). It has over 79,800 hectares of planted oil palm estates, over 7,700 hectares of sugar cane and a further 9,200 hectares of grazing pasture, (some of which will be converted to oil palm); twelve oil mills; two refineries, one in PNG and one in Liverpool, UK; and a seed production and plant breeding facility. The Company is listed on both the Main Market of the London Stock Exchange and on the Port Moresby Stock Exchange in PNG.

NBPOL is fully vertically integrated, producing its own seed (which it also sells globally), planting, cultivating and harvesting its own land, and processing and refining palm oil (both in PNG and the UK). It also contracts directly with its end customers in the EU and arranges shipping of its products.

NBPOL has high regard for the importance of its sustainability credentials. It has achieved 100% certification of all estates, mills and smallholders to the Roundtable on Sustainable Palm Oil ('RSPO') standard. NBPOL continues to be active in proving its performance through certification to ISO 14001 and its close involvement with other innovative initiatives. The Company is a certified supplier of sustainable palm oil from its entire production base in PNG and Solomon Islands, under the RSPO guidelines .

Disclaimer:

This document includes statements that are forward-looking in nature. Forward-looking statements involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of New Britain Palm Oil Limited to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. Any such forward-looking statements speak only as of the date of this document and New Britain Palm Oil Limited does not undertake to update forward-looking statements to reflect events or circumstances after that date. Information contained in this document relating to the Group should not be relied upon as an indicator of future performance.

NEW BRITAIN PALM OIL LIMITED

PRELIMINARY RESULTS FOR THE YEAR ENDED 31 DECEMBER 2013 (UNAUDITED)

The Group's results in 2013 reflect profit before tax of USD 17.3 million (excluding the changes in fair value of biological assets under IAS 41 but including the net gains of USD 8.2 million on agricultural products transferred to inventories at balance date) compared to USD 81.6 million in 2012. Other (losses)/gains include net foreign exchange losses of USD 17.5 million as compared to gains of USD 8.0 million in 2012, a reflection of the local currency appreciation during 2012 as compared to significant depreciation in 2013.

Results

Income Statement

Revenue fell by 17.5% over the comparative period to USD 558.7 million (2012: USD 677.0 million), largely due to lower average selling prices achieved. In 2013, the Group shipped517,731 tonnes of all oils at USD 898/tonne (2012: 511,015 tonnes at USD 1,085/tonne) as well as 917 tonnes of palm kernels at USD 214/tonne (2012: 27,092 tonnes at USD 363/tonne). As a result, the Group's revenues from palm products are USD 99.2 million lower than the same period last year. Sugar sales for 2013 were 31,401 tonnes at an average price of USD 1,464/tonne (2012: 31,697 tonnes at an average price of USD 1,761/tonne) with revenues of USD 46.0 million, a decrease of USD 9.8 million (17.6%) on last year. As sugar sales are denominated in PNG Kina, US Dollar revenues have suffered from the depreciation in the currency. Seed revenues of USD 5.6 million are much lower than the prior year (USD 11.8 million) driven by reduced demand and lower volumes of 6.9 million seeds sold versus 14.7 million in 2012.

Gross profit was USD 192.0 million, a decrease of 22.6% from USD 248.0 million for last year, reflecting the impact of lower selling prices, although supported by the depreciation in the Papua New Guinea Kina against the US Dollar . By business segment, our palm products business reflected a 34% gross margin (USD 168.5 million) versus 35% (USD 211.3 million) in 2012, whilst our sugar business reflected a 45% gross margin (USD 20.7 million) versus 51% (USD 28.5 million) and our seeds business 34% (USD 1.9 million) versus 61% (USD 7.2 million). Cost of sales includes the cost of fruit purchased from smallholders, which decreased in line with the reduction in the world prices of CPO and PKO. During 2013, the Group paid USD 62.8 million for 589,524 tonnes of smallholder fruit compared to USD 95.2 million for 684,594 tonnes in 2012. Cost of sales also includes cultivation costs, milling costs, labour costs and depreciation, most of which were negatively impacted by the lower FFB production from our own plantations and the lower throughput of FFB at our mills. However, the year on year depreciation in the PNG Kina against the US Dollar by approximately 17% has reduced those costs denominated in the local currency, particularly labour and overheads. In addition to the currency impact, we have continued to progress our cost optimisation and efficiency review benefiting from the cheaper fertiliser and oil freight costs locked in at the end of 2012 as well as making reductions in management and general overheads across the Group. The benefits of supplying more of our electricity needs through the Clean Development Mechanism ("CDM") methane projects have also had a marked impact on reducing our direct milling and refining costs in 2013.

Other (losses)/gains include net foreign exchange losses of USD 17.5 million as compared to gains of USD 8.0 million in 2012. Also included in other gains is the net gain arising on recognition of agricultural products transferred to inventories at the end of the period, reflecting the expected margin on closing inventories with the actual cost of production reflected as part of cost of sales. The net gain is lower by USD 3.1 million year-on-year (USD 8.2 million against USD 11.3 million) impacted by lower oil stocks but at a higher margin than the prior year due to lower costs of production and higher oil prices at year-end. The unrealised gain of USD 4.1 million recognised in 2012 on derivative financial instruments relating to forward sales of refined oils has been released in 2013. No such gain or loss has arisen in 2013.

Distribution costs were lower by USD 6.2 million (8.0%) compared to last year despite shipping slightly higher volumes reflecting mainly the reduction in average freight costs to our customers (USD 108 per tonne as compared to USD 114 per last year) and partially the currency depreciation with respect to wharfage and port costs. Administrative expenses were lower by USD 17.2m (16.7%) as compared to 2012 reflecting management's cost cutting initiatives and the currency depreciation.

Net finance costs have decreased to USD 9.6 million compared to USD 10.6 million in the corresponding period last year reflecting lower total borrowings and improved working capital across the Group.

Profit before tax for the period was USD 71.0 million including IAS 41, and USD 17.3 million excluding IAS 41, compared to 2012 of USD 4.4 million including IAS 41 and USD 81.6 million excluding IAS 41.

Tax expense for the period was USD 21.0 million including IAS 41 and USD 4.8 million excluding IAS 41 compared to 2012 of a tax expense of USD 2.7 million including IAS 41 and USD 25.9 million excluding IAS 41.

Earnings per share including the effects of IAS 41 increased from USD 0.4cents in 2012 to USD 31.9 cents in 2013. Earnings per share excluding IAS 41 were USD 7.4 cents compared to USD 36.0 cents last year. 

Balance sheet

The Company's balance sheet reflects cash balances of USD 30.9 million and total borrowings of USD 272.6 million. Borrowings comprise USD 181.7 million pertaining to the five year term facility taken out in April 2010 for the acquisition of CTP (PNG) Limited (renamed KPOL), USD 41.9 million working capital financing for the Liverpool refinery, USD 35.8 million for RAIL (including bank overdrafts of USD 9.0 million) and USD 13.2 million of short term trade finance.

Trade and other receivables are lower at USD 85.2 million compared to USD 126.9 million last year, reflecting the timing of shipments and value of oils shipped. Inventories are also lower at USD 171.4 million compared to USD 193.0 million at the end of 2012 mainly due to changes in oil and sugar stocks with fluctuations due to timing of shipments and movements in price, but also the depreciation in the local currency.

There have been no movements in issued share capital during 2013.

Cashflow and capital expenditure

Net cash generated from operating activities increased marginally to USD 142.6 million compared to USD 141.8 in 2012, reflecting the lower cash costs of production together with a much improved working capital position.

Investing activities decreased by USD 86.5 million from USD 157.2 million in 2012 to USD 70.7 million in 2013. Purchases of property, plant and equipment decreased by USD 76.2 million following completion of significant capital projects and scaling back non-essential programmes to reflect market conditions. Expenditure on plantation development and biological assets totalled USD 29.1 million (a decrease of USD 10.3 million from the same period last year) reflecting the completion of 970 hectares of new plantings and 2,986 hectares of replanting, with a further 1,356 hectares under preparation for replanting.

Financing activities includes the payment of an interim dividend in relation for 2013 of USD 10 cents per share.

The Group ended the period with net cash balances of positive USD 8.7 million having started the year with negative cash balances of USD 16.8 million.

Operational review

In 2013 the Group processed 2,085,670 tonnes of FFB, some 8.2% lower than in 2012. Adverse weather conditions once again affected harvesting and crop movements in the first half of the year and, in line with oil palm plantations in the wider South East Asian region, NBPOL experienced a biological drop in yield which was especially pronounced in the second half of the year. We have previously discussed our third quarter year on year FFB production which saw a drop of 9.1% and 18.4% from our estates and smallholders respectively. This continued in the fourth quarter and comparing Q4 2013 to Q4 2012 reflects a drop in FFB production of 8.4% and 19.5% respectively.

Full year FFB production from the Group's estates was 1,496,146 tonnes with an additional 589,524 tonnes purchased from smallholders. Plantation yields per hectare dropped 9% from 23.8 t/ha in 2012 to 21.7 t/ha in 2013 whilst smallholders dropped 14% from 16.2 t/ha in 2012 to 13.9 t/ha in 2013, a combined reduction of 10% year on year. Whilst the Group's FFB yield results were mixed in 2013, improvements were made to road and drainage infrastructure in the second half of the year, harvesting rounds were well under control at the end of the year and the Group is well positioned as we move into 2014 when yields are expected to normalise during the course of the year.

The wet weather affected extraction rates with 507,855 tonnes of crude oil (crude palm oil and palm kernel oil), produced from the Group's 12 oil mills, a reduction of 7% from the 545,207 tonnes produced in 2012. Crude palm oil extraction rates improved in the second half of the year rising from an average 21.98% from January to June to 22.45% from July to December. In 2013, the Group achieved an average palm product extraction rate of 27.50% down from the 27.59% achieved in 2012.

Hectarage Statement as at 31 December 2013

Group Land Use	WNB	GPP	RAI	KPOL	GROUP
Mature Oil Palms 23+ yrs	1,654	1,326	-	3,644	6,625
Mature Oil Palms 18-22 yrs	4,002	880	-	2,325	7,206
Mature Oil Palms 13-17 yrs	7,987	256	-	5,990	14,232
Mature Oil Palms 8-12 yrs	14,844	968	3,337	5,561	24,710
Mature Oil Palms 3-7 yrs	5,543	2,100	6,474	2,178	16,294
Total Mature Oil Palms	34,029	5,529	9,811	19,698	69,067
Immature Oil Palms 0-3 yrs	2,919	745	1,679	5,474	10,817
Total Oil Palm	36,948	6,274	11,490	25,171	79,884
Grazing Pastures	394	-	8,888	-	9,282
Sugar Cane	-	-	7,718	-	7,718
Other Areas	2,887	445	2,153	2,059	7,544
Reserves etc	13,379	1,020	3,714	12,069	30,183
TOTAL	53,610	7,740	33,962	39,299	134,611

WNB - West New Britain; GPP - Guadalcanal; RAI - Ramu; KPOL - Kula Palm Oil Limited consisting of Higaturu, Milne Bay and Poliamba.

As at 31 December 2013 the Group had 79,884 hectares of oil palms planted of which 69,067 are under harvest, with the balance of 10,817 being immature palms planted over the last 3 years. In addition, the Group has 7,718 hectares of sugar cane and 9,282 hectares of grazing pastures supporting 20,000 head of beef cattle. Of the total land area of 134,611 hectares, 104,428 hectares are under cultivation and the balance is undeveloped.

The Group planted 970 new hectares in 2013 comprising the continuation of the Silovuti Project in West New Britain where 287 hectares were planted, and accessibility to the area improved considerably with the newly proposed section of road receiving approval by the Provincial Government and work commenced on clearing this road in the last quarter. At Ramu, new plantings of 454 hectares were completed whilst at Higaturu, 229 hectares were planted.

Replanting at KPOL continued to be the focus with an additional 2,179 hectares replanted in 2013. Since acquisition, we have replanted over 6,500 hectares of aged palms at KPOL with the Group's high yielding Dami elite seedlings and yields are expected to increase across the KPOL sites as these palms mature. At the end of 2013, the age profile of the Group's palms should support yield growth with a weighted average palm age of 10.8 years similar to the 10.7 years reported last year.

In 2013 Ramu harvested 320,467 tonnes of cane from 6,354 hectares yielding 30,208 tonnes of sugar. Start of harvesting was delayed by three weeks due to wet conditions. This was followed by very dry conditions in the middle of the year and unplanned cane fires that disrupted harvesting and contributed to lower than expected yields. During the year, some 31,401 tonnes of sugar was sold almost on par with 2012 (31,697 tonnes). Retail sales continued to dominate at 93% of total sales. Market share in this sector remains robust despite the lower sugar prices worldwide (prices fell from over 19 US cents per pound in January to 16 US cents in December). Until January 2015 the industry will continue to enjoy protection in the form of a 35% tariff on all imported sugar. Concerted lobbying by management for the government to raise the tariff in order to protect the domestic sugar industry continues.

Our Dami research facility is one of the world's leading seed producers and in 2013 we sold 6.9 million seeds, 46.5% lower than the 14.8 million seeds sold in 2012. This was the first drop in seed sales in the last five years and can be attributed to the lower palm oil price and the depreciation of some Asian currencies against the USD, leading plantation companies to defer their replant programmes and development plans.

In West New Britain, the Kumbango refinery has increased its supply of specialised palm products to Ferrero and continues to maintain a consistent quality supply of traceable sustainable stearin and other palm products for the bakery fats business in the UK. The laboratory improvements and training and development of the staff over recent years have assisted with the production of additional derivatives at the refinery involving high grade fractions and blending.

New Britain Oils Ltd (NBOL), the UK refinery operation in Liverpool, experienced growth in sales volumes, margins per tonne and number of customers. Over 110 companies in the UK and Ireland have now received sustainable palm based products from NBOL, thereby increasing the number of products across the food sector that can now be made with RSPO certified sustainable oils. Sustainable palm oil sourcing has become important throughout the UK food industry with the main notable exception of foodservice (packed products for frying in cafés and restaurants), and the aim is to address this in 2014 by raising awareness of the issue among end users of frying oils. The UK's industrial bakery sector has seen a particularly dynamic shift towards RSPO certified supply chains, dominated at this stage by Mass Balance claims. The trend towards using fully segregated RSPO products is expected to gather more pace as many retailers approach their 2015 sustainability deadlines.

During 2013 NBOL invested in developing in-house technical capabilities for bakery ingredients. In order to test the products and ensure they meet the exacting requirements of customers NBOL recently opened a test bakery facility which allows the testing of internally developed margarines across a wide range of bakery applications, and replicates the processes used by our customers. As well as allowing a review of existing products it also provides the opportunity to develop new products and give greater technical support to customers. During the year, thirteen new bakery products were developed which have been instrumental in securing new business with some of the UK's leading bakery manufacturers.

Kulim partial offer

Following the lapse of Kulim (Malaysia) Berhad's ("Kulim") partial offer for the Company in 2013, there have been no further discussions between Kulim and the Board of the Company with respect to the offer or any future offer for the Company. In light of the PNG Securities Commission's decision to prevent the offer from proceeding, and the ensuing uncertainty created by the changes to the PNG Takeovers Code, we understand that the Securities Commission is intending to release guidelines on the application of the new rules in the near future.

Current trading and outlook

Whilst the past two years have been extremely challenging for the Group with disappointing production, extraction rates and profitability, the measures taken in 2013 to reduce cash costs of production, together with the depreciation in the currency in 2013, sees the Group very well placed to return to growth in the current year and improve operating margins.

Forward sales to date of our 2014 CPO production are approximately 121,000 tonnes at USD 933/tonne and the pricing environment appears to be well supported with biodiesel usage expected to grow significantly. PKO prices have continued to increase in recent months following supply concerns over lauric oils (coconut) and are currently trading at above USD 1,300/tonne. Rainfall to date in 2014 has been higher than the same period last year particularly in West New Britain. Pleasingly, we were better prepared to cope with the weather and FFB production is some 6% higher with extraction rates also higher than the same period in 2013.

From a global perspective, production growth was lower than market expectations in the major oil palm growing region, and there was a clear biological yield reduction induced by yield cycle factors. Alternative vegetable oils supply was strong in 2013 resulting in a narrowing of the CPO discount to soy bean oil from approximately USD 300/tonne to USD 60/tonne currently. Supply concerns for soy due to recent hot weather has been much publicised and the outlook for palm oil demand remains robust with the strengthening of the global economy and mandatory biodiesel implementation by the world's two biggest palm oil producers bodes well for future pricing.

I would like to take this opportunity to personally thank the management team and all of our employees for their efforts through another difficult year and look forward to a stronger performance in 2014.

Antonio Monteiro De Castro

Non-executive Chairman

27 February 2014

NEW BRITAIN PALM OIL LIMITED

Consolidated Statement of Comprehensive Income (Unaudited)

For the year ended 31 December (abridged)

		2013		2012
		USD'000		USD'000
Revenue		558,652		677,014
Cost of sales		(366,610)		(428,994)
Gross profit		192,042		248,020
Net gain/(loss) arising from changes in fair value of biological assets		53,678		(77,250)
Other income		2,342		2,340
Other (losses)/gains		(9,368)		23,381
Distribution costs		(71,767)		(77,987)
Administrative expenses		(86,344)		(103,581)
Operating profit		80,583		14,923
Interest income		13		42
Finance costs		(9,614)		(10,578)
Net finance costs		(9,601)		(10,536)
PROFIT BEFORE INCOME TAX		70,982		4,387
Income tax expense		(20,922)		(2,746)
PROFIT FOR THE YEAR		50,060		1,641
Other comprehensive income Items that will subsequently be reclassified to profit and loss:
Cash flow hedges		440		4,319
Income tax relating to components of other comprehensive income		(132)		(1,296)
		308		3,2023
Items that will not subsequently be reclassified to profit and loss:
Currency translation differences		(148,929)		3,509
Other comprehensive income/(loss) for the year, net of tax		(148,621)		6,532
TOTAL COMPREHENSIVE INCOME/(LOSS) FOR THE YEAR		(98,561)		8,173
Profit for the year is attributable to:
Equity holders of the Company		47,653		632
Non-controlling interest		2,407		1,009
		50,060		1,641
Total comprehensive income/(loss) for the year is attributable to:
Equity holders of the Company		(104,429)		7,164
Non-controlling interest		5,868		1,009
		(98,561)		8,173
Earnings per share		$		$
- Basic and diluted		0.319		0.004

NEW BRITAIN PALM OIL LIMITED

Consolidated Balance Sheet (Unaudited)

At 31 December (abridged)

		2013		2012
		USD'000		USD'000
NON CURRENT ASSETS
Property, plant and equipment		755,425		889,735
Biological assets		370,206		382,051
Intangible assets		47,084		56,846
Derivative financial instruments		-		375
		1,172,715		1,329,007
CURRENT ASSETS
Cash and cash equivalents		30,925		18,817
Trade and other receivables		85,175		126,911
Biological assets		16,207		21,919
Derivative financial instruments		4,096		7,379
Inventories		171,411		193,040
		307,814		368,066
TOTAL ASSETS		1,480,529		1,697,073
NON CURRENT LIABILITIES
Borrowings		179,934		212,714
Deferred income tax liabilities		286,999		331,163
		466,933		543,877
CURRENT LIABILITIES
Borrowings		92,698		114,007
Trade and other payables		47,918		49,368
Current income tax liabilities		6,709		6,878
		147,325		170,253
TOTAL LIABILITIES		614,258		714,130
NET ASSETS		866,271		982,943
SHAREHOLDERS' EQUITY
Issued capital		180,333		180,333
Other reserves		70,649		224,201
Retained earnings		599,298		568,286
		850,280		972,820
Non-controlling interest in equity		15,991		10,123
TOTAL EQUITY		866,271		982,943

NEW BRITAIN PALM OIL LIMITED

Consolidated Statement of Changes in Equity (Unaudited) (abridged)

		Attributable to equity holders of the Company
		Issued		Other		Retained				Non-Controlling		Total
		Capital		Reserves		Earnings		Total		Interest		Equity
		USD'000		USD'000		USD'000		USD'000		USD'000		USD'000
Balance at 1 January 2012		124,954		209,118		613,578		947,650		54,641		1,002,291
Total comprehensive income for the year		-		6,532		632		7,164		1,009		8,173
Share issue		50,565		-		-		50,565		-		50,565
Treasury shares transferred for land rights		400		-		-		400		-		400
Treasury shares sold		4,414		-		-		4,414		-		4,414
Acquisition of non-controlling interest		-		8,551		-		8,551		(45,527)		(36,976)
Dividends paid		-		-		(45,924)		(45,924)		-		(45,924)
Balance at 31 December 2012		180,333		224,201		568,286		972,820		10,123		982,943
Total comprehensive income for the year		-		(152,082)		47,653		(104,429)		5,868		(98,561)
Acquisition of non-controlling interest		-		(1,470)		-		(1,470)		-		(1,470)
Dividends paid		-		-		(16,641)		(16,641)		-		(16,641)
Balance at 31 December 2013		180,333		70,649		599,298		850,280		15,991		866,271

NEW BRITAIN PALM OIL LIMITED

Consolidated Statement of Cash Flows (Unaudited) (abridged)

		2013		2012
		USD'000		USD'000
CASH FLOW FROM OPERATING ACTIVITIES
Cash receipts from customers		601,451		689,787
Cash payments to suppliers and employees		(444,121)		(523,391)
Cash generated from operations		157,330		166,396
Income tax paid		(5,082)		(14,055)
Interest paid		(9,614)		(10,578)
Interest received		13		42
Net cash generated from operating activities		142,647		141,805
CASH FLOW FROM INVESTING ACTIVITIES
Acquisition of subsidiary, net of cash acquired		-		(4,405)
Proceeds from sale of treasury shares		-		4,414
Purchase of property, plant and equipment		(41,607)		(117,893)
Expenditure on plantation development		(26,458)		(35,007)
Expenditure on biological assets		(2,627)		(4,340)
Net cash used in investing activities		(70,692)		(157,231)
CASH FLOW FROM FINANCING ACTIVITIES
Proceeds from borrowings		46,604		50,763
Repayment of borrowings		(77,866)		(69,252)
Dividends paid to company shareholders		(14,522)		(39,969)
Net cash from financing activities		(45,784)		(58,458)
NET INCREASE/(DECREASE) IN CASH AND CASH EQUIVALENTS AND BANK OVERDRAFTS		26,171		(73,884)
Effects of exchange rate changes on cash and cash equivalents and bank overdrafts		(652)		1,999
Add: Cash and cash equivalents and bank overdrafts at the beginning of the year		(16,818)		55,067
CASH AND CASH EQUIVALENTS AND BANK OVERDRAFTS AT THE END OF THE YEAR		8,701		(16,818)

The following balances comprise cash and cash equivalents and bank overdrafts at the end of the year:

Cash and bank balances		30,925		18,817
Short term borrowings (included in current borrowings)		(13,247)		(25,000)
Bank overdraft (included in current borrowings)		(8,977)		(10,635)
		8,701		(16,818)

Reconciliation of Profit After Income Tax To Net Cash Generated From Operating Activities (Unaudited) (abridged)

	2013		2012
	USD'000		USD'000
Profit after income tax	50,060		1,641
Add/(less) non-cash items:
Depreciation and amortisation	69,921		69,891
Net (gain)/loss arising from changes in fair value of biological assets	(53,678)		77,250
Net gain arising on recognition of agricultural products	(8,159)		(11,258)
Foreign currency exchange differences	23,186		(9,068)
Deferred income tax	15,142		837
Add/(less) movements in working capital items:
Decrease in trade and other receivables	33,383		26,626
Increase/(decrease) in current income tax liabilities	944		(25,529)
(Decrease)/increase in trade and other payables	(5,733)		2,391
Decrease in inventories	17,581		9,024
Net cash generated from operating activities	142,647		141,805

NEW BRITAIN PALM OIL LIMITED

Notes to the financial statements

1.      Basis of financial statements preparation

The abridged financial information in this statement is prepared in accordance with International Financial Reporting Standards ("IFRS") (and International Financial Reporting Interpretations Committee ("IFRIC") interpretations).

They have been prepared on the basis of the accounting policies set out in the Group's 2012 Annual Report and have been consistently applied throughout the year. Where necessary, comparative figures have been adjusted to conform with changes in presentation in the current year.

2.      Status of financial information

This preliminary announcement does not constitute the Group's consolidated statutory financial statements for the year ended 31 December 2013.  This report is based on the accounts which are in the process of being prepared and audited and which will be approved by the Board and reported on by the auditors on 28 March 2014 and subsequently sent to shareholders and filed with the PNG Registrar of Companies. Accordingly, the financial information contained in this announcement is unaudited and does not have the status of statutory accounts. 

Financial information for the year ended 31 December 2012 has been extracted from the audited financial statements as filed with the PNG Registrar of Companies.  The auditors' report on the full financial statements for the year ended 31 December 2012 was unqualified.

3.   Reconciliation of reported Profit before tax

		2013		2012
		USD'000		USD'000
Profit before tax		70,982		4,387
Net (gain)/loss arising from changes in fair value of biological assets		(53,678)		77,250
Profit before tax excluding the effects of revaluing biological assets under IAS 41		17,304		81,637

4.   Earnings per share

		2013		2012
		USD'000		USD'000
Net profit attributable to ordinary shareholders used in basic and diluted EPS		47,653		632
Net (gain)loss arising from changes in fair value of biological assets attributable to ordinary shareholders, net of tax (*)		(36,572)		53,166
Net profit attributable to ordinary shareholders before changes in fair value of biological asset		11,082		53,798
Weighted average number of ordinary shares ('000) used in basic and diluted EPS		149,382		149,382
Basic and diluted EPS (USD/share)		0.319		0.004
Basic and diluted EPS before changes in fair value of biological assets (USD/share)		0.074		0.360

* The net (gain)loss arising from changes in fair value of biological assets attributable to ordinary
shareholders, net of tax is reconciled to the income statement as follows:

Net (gain)loss arising from changes in fair value of biological assets		(53,678)		77,250
Income tax expense/(credit)		16,103		(23,175)
		(37,575)		54,075
Attributable to:
Ordinary shareholders		(36,572)		53,166
Non-controlling interest		(1,003)		909
		(37,575)		54,075

5.   Income tax

	2013		2012
	USD'000		USD'000
Income Tax Expense
Current tax	5,737		216
Deferred tax	15,542		837
Over provision in prior years	43		1,693
	20,922		2,746
The income tax expense has been calculated as follows:
Profit for the year	70,982		4,387
Income tax at 30%	21,295		1,316
Tax effect of:
Non-assessable items	(415)		(263)
Over provision in prior years	43		1,693
Income tax expense	20,922		2,746

6.   Exchange rates

Items included in the financial statements of each of the Group's entities are measured using the currency of the primary economic environment in which the entity operates. The consolidated financial information is presented in US Dollars, which is New Britain Palm Oil Limited's presentation currency and differs from its functional currency, the Papua New Guinea Kina ("PNG Kina").

The balance sheets and statements of changes in equity are translated from PNG Kina to US Dollars at the closing rate existing at the date of the balance sheet, which at 31 December 2013 is PGK 1.00 = USD 0.3955 (31 December 2012: PGK 1.00 = USD 0.4775).

The income statements and statements of cash flows are translated from PNG Kina to US Dollars at the average exchange rates prevailing during the period, which are considered to approximate the actual exchange rate at the date of each transaction. The average exchange rate at 31 December 2013 is PGK 1.00 = USD 0.4313 (31 December 2012: PGK 1.00 = USD 0.4825).

This information is provided by RNS

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