R.E.A. HOLDINGS PLC Climate change represents an emerging risk both for the potential impacts of the group's operations on the climate and the effects of climate change on the group's operations. The group has been monitoring and working to minimise its greenhouse gas ("GHG") emissions for over ten years, with levels of GHG emissions an established key performance indicator for the group and for accreditation by the independent certification bodies to which the group subscribes. In addition to reporting on energy consumption and efficiency in accordance with the UK Government's recently introduced SECR framework, the group is preparing to incorporate disclosures in accordance with the TCFD recommendations in its 2021 annual report.
The directors keep under review potential impacts on its operations from the termination of UK membership of the European Union ("Brexit"). This could result in a movement in sterling against the dollar and rupiah with consequential impact on the group dollar translation of its sterling costs and sterling liabilities, although the directors do not believe that such impact (which could be positive or negative) would be material in the overall context of the group. Beyond this, and considering that the group's entire operations are in Indonesia, as previously stated the directors do not see Brexit as posing a signi?cant risk to the group.
At the date of the annual report, in addition to the Covid pandemic, risks assessed by the directors as being of particular signi?cance were those as detailed under Agricultural operations (Produce prices, Climatic factors and Other operational factors) and General (Funding).
The directors' assessment, as respects produce prices and funding, re?ects the key importance of those risks in relation to the matters considered in the "Viability statement" in the "Directors' report" on pages 45 to 47 of the annual report and under "Financing" above and, as respects climatic and other factors, the extent of the negative impact that could result from adverse incidence of such risks.
The directors consider that the principal risks and uncertainties for the second six months of 2021 continue to be those set out in the annual report and as summarised above.
GOING CONCERN
In the statements regarding viability and going concern on pages 45 to 47 of the 2020 annual report, the directors set out considerations with respect to the group's capital structure and their assessment of liquidity and financing adequacy.
Since publication of the 2020 annual report, the group has continued to benefit from firm CPO prices supported by the favourable demand-supply balance for vegetable oils. Meanwhile, the impact of Covid on the operations has been restricted to some periodic shortages of harvesters and contractors due to travel hesitancy as well as delays in deliveries of spare parts.
Discussions with the group's Indonesian bankers, PT Bank Mandiri (Persero) Tbk ("Mandiri"), were successfully concluded in June 2021 with completion of an agreement that the Indonesian rupiah denominated loan and working capital facility previously provided by Mandiri to REA Kaltim be replaced with two new loans and a new working capital facility, denominated in Indonesian rupiah. The new facilities significantly improve the group's cash flow being repayable over 8 rather than 5 years at an interest rate of 9.5 per cent reduced from 10.5 per cent.
The group's net indebtedness reduced by USD14.0 million over the six months to 30 June 2021. During the same period, the group reduced to normal levels the extended credit from suppliers that had built up during 2019 and 2020.
Proposals for the replacement of the existing Mandiri term loan to SYB continue to advance through the bank's approval process. The group is also close to completing agreements with its key customers on the continuance of pre-sale advances from the customers. At the same time, the group continues to explore alternative financing options should these be needed.
Provided that CPO prices remain at current firm levels, the group's operating and financial performance is expected to improve further. Accordingly, and based on the foregoing, the directors have a reasonable expectation that the company will be able to continue its operations and meet its liabilities as they fall due over the period of twelve months from the date of approval of the accompanying condensed consolidated financial statements and they continue to adopt the going concern basis of accounting in preparing these statements.
DIRECTORS' RESPONSIBILITIES
The directors are responsible for the preparation of this half yearly report.
The directors confirm that to the best of their knowledge:
-- the accompanying set of condensed consolidated financial statements has been prepared in accordance withUK adopted IAS 34 "Interim Financial Reporting";
-- the "Interim management report" and "Principal risks and uncertainties" sections of this half yearlyreport include a fair review of the information required by rule 4.2.7R of the Disclosure Guidance and TransparencyRules of the Financial Conduct Authority, being an indication of important events that have occurred during thefirst six months of the financial year and their impact on the set of condensed consolidated financial statements,and a description of the principal risks and uncertainties for the remaining six months of the year; and
-- note 19 in the notes to the condensed consolidated financial statements includes a fair review of theinformation required by rule 4.2.8R of the Disclosure Guidance and Transparency Rules of the Financial ConductAuthority, being related party transactions that have taken place in the first six months of the current financialyear and that have materially affected the financial position or performance of the group during that period, andany changes in the related party transactions described in the 2020 annual report that could do so.
The current directors of the company are as listed on page 44 of the company's 2020 annual report.
Approved by the board on 7 September 2021
DAVID J BLACKETT Chairman
CONSOLIDATED INCOME STATEMENT
For the six months ended 30 June 2021
6 months to 6 months to Year to
30 June 30 June 31 December
2021 2020 2020
Note USD'000 USD'000 USD'000
Revenue 2 87,667 62,356 139,088
Net loss arising from changes in fair value of agricultural produce 4 (3,279) (4,701) (777)
inventory
Cost of sales:
Depreciation and amortisation (14,092) (14,097) (27,969)
Other costs (48,092) (39,825) (82,215)
Gross profit 22,204 3,733 28,127
Distribution costs (249) (421) (2,835)
Administrative expenses 5 (8,377) (6,167) (16,486)
Operating profit / (loss) 13,578 (2,855) 8,806
Investment revenues 2 270 143 525
Impairments and similar charges - - (9,483)
Finance costs 6 (6,200) (4,519) (23,098)
Profit / (loss) before tax 7,648 (7,231) (23,250)
Tax 7 (4,585) (808) 7,336
Profit / (loss) for the period 3,063 (8,039) (15,914)
Attributable to:
Equity shareholders (2,366) (7,881) (13,183)
Preference shareholders 8 4,502 - -
Non-controlling interests 927 (158) (2,731)
3,063 (8,039) (15,914)
Loss per 25p ordinary share (US cents) 9 (5.4) (17.9) (30.0)
All operations in all periods are continuing.
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
For the six months ended 30 June 2021
6 months to 6 months to Year to
30 June 30 June 31 December
2021 2020 2020
Note USD'000 USD'000 USD'000
Profit / (loss) for the period 3,063 (8,039) (15,914)
Other comprehensive income
Items that may be reclassified to profit or loss:
Exchange differences on translation of foreign operations 1,673 - (3,504)
Deferred tax on exchange differences (630) 1,148 1,769
1,043 1,148 (1,735)
Items that will not be reclassified to profit or loss:
Actuarial gains / (losses) 5 268 1,835
Deferred tax on actuarial gains / (losses) (1) (67) (367)
4 201 1,468 (MORE TO FOLLOW) Dow Jones Newswires
September 08, 2021 02:00 ET (06:00 GMT)
