R.E.A. HOLDINGS PLC ** Bearing interest at fixed rates
The fair values of cash and deposits, loans from non-controlling shareholder, loans from related party and bank debt approximate their carrying values since these carry interest at current market rates. The fair values of the dollar notes and sterling notes are based on the latest prices at which those notes were traded prior to the balance sheet dates.
16. Bank loans
30 June 30 June 31 December
2021 2020 2020
USD'000 USD'000 USD'000
Bank loans 112,677 115,537 110,210
The bank loans are repayable as follows:
On demand or within one year 16,214 21,007 54,148
Between one and two years 17,100 19,240 9,823
After two years 79,363 75,290 46,239
112,677 115,537 110,210
Amount due for settlement within 12 months 16,214 21,007 54,148
Amount due for settlement after 12 months 96,463 94,530 56,062
112,677 115,537 110,210 Within "Amount due for settlement within 12 months" as at 31 December 2020 are bank loans totalling USD30.5 million from the group's Indonesian bankers Mandiri to SYB and KMS that would have been classified as non-current liabilities were it not for certain breaches by those companies of loan covenants applicable at the balance sheet date. Mandiri subsequently waived the breaches in question. Such loans would have been classified as non-current liabilities had the waivers been received before the balance sheet date.
All bank loans are denominated in Indonesian rupiah and are net of unamortised expenses. The weighted average interest rate in 2021 was 10.0 per cent (2020: 10.8 per cent).
Under the terms of its bank facilities, certain plantation subsidiaries are restricted to an extent in the payment of interest on borrowings from, and on the payment of dividends to, other group companies. The directors do not believe that the applicable covenants will affect the ability of the company to meet its cash obligations.
At the balance sheet date, the group had undrawn Indonesian rupiah denominated facilities of USDnil (2020: USDnil).
17. Reconciliation of operating profit to operating cash flows
6 months to 6 months to Year to
30 June 30 June 31 December
2021 2020 2020
USD'000 USD'000 USD'000
Operating profit / (loss) 13,578 (2,855) 8,806
Amortisation of intangible assets 523 522 1,045
Depreciation of property, plant and equipment 13,569 13,575 26,924
Decrease in fair value of agricultural produce inventory 3,279 4,701 588
Decrease / (increase) in value of growing produce 580 1,250 (229)
(Profit) / loss on disposal of property, plant and equipment - (3) 537
Operating cash flows before movements in working capital 31,529 17,190 37,671
(Increase) / decrease in inventories (excluding fair value movements) (2,475) 687 1,789
Decrease / (increase) in receivables 5,626 53 (3,438)
(Decrease) / increase in payables (6,016) 9,962 18,285
Exchange translation differences 523 1,917 (728)
Cash generated by operations 29,187 29,809 53,579
Taxes paid (4,026) (5,534) (882)
Interest paid* (9,272) (9,842) (19,218)
Net cash from operating activities 15,889 14,433 33,479 * Of which USD134,000 is in respect of lease liabilities (31 December 2020: USD301,000, 30 June 2020: USD171,000)
18. Movements in net borrowings
6 months to 6 months to Year to
30 June 30 June 31 December
2021 2020 2020
USD'000 USD'000 USD'000
Change in net borrowings resulting from cash flows:
Increase / (decrease) in cash and cash equivalents, after exchange rate effects 16,990 (3,191) 2,277
Net (increase) / decrease in bank borrowings (5,953) 11,388 13,484
Decrease in borrowings from non-controlling shareholder - - 7,514
Net increase in related party borrowings - (1,816) (4,031)
11,037 6,381 19,244
Amortisation of sterling note issue expenses and premium (91) (159) (1,545)
Amortisation of dollar note issue expenses (46) (47) (87)
Amortisation of bank loan expenses (98) - (175)
Transfer from current assets - unamortised bank loan expenses 953 - 1,126
11,755 6,175 18,563
Currency translation differences 2,153 1,994 (87)
Net borrowings at beginning of period (189,351) (207,827) (207,827)
Net borrowings at end of period (175,443) (199,658) (189,351) 19. Related parties
Transactions between the company and its subsidiaries, which are related parties, have been eliminated on consolidation and are not disclosed in this note.
Loan from related party
R.E.A. Trading plc ("REAT"), a related party, has made unsecured loans to the company on commercial terms. REAT is owned by Richard Robinow (a director of the company) and his brother who, with members of their family, also own Emba Holdings Limited, a substantial shareholder in the company. Total loans outstanding at 30 June 2021 were USD4.1 million (31 December 2020: USD4.0 million, 30 June 2020 USD1.8 million). Interest paid during the period was USD193,000 (31 December 2020: USD165,000, 30 June 2020 nil). This disclosure is also made in compliance with the requirements of Listing Rule 9.8.4(10).
20. Rates of exchange
30 June 2021 30 June 2020 31 December 2020
Closing Average Closing Average Closing Average
Indonesian rupiah to US dollar 14,496 14,323 14,302 14,622 14,105 14,570
US dollar to pounds sterling 1.3820 1.39 1.2268 1.27 1.3648 1.29 21. Events after the reporting period
There have been no material post balance sheet events that would require disclosure in, or adjustment to, these condensed consolidated financial statements.
22. Cautionary statement
This document contains certain forward-looking statements relating to R.E.A. Holdings plc (the "group"). The group considers any statements that are not historical facts as "forward-looking statements". They relate to events and trends that are subject to risk and uncertainty that may cause actual results and the financial performance of the group to differ materially from those contained in any forward-looking statement. These statements are made by the directors in good faith based on information available to them and such statements should be treated with caution due to the inherent uncertainties, including both economic and business risk factors, underlying any such forward-looking information.
References to group companies in this report are defined below:
CDM PT Cipta Davia Mandiri
KMS PT Kutai Mitra Sejahtera
PBJ2 PT Persada Bangun Jaya
PU PT Prasetia Utama
REA Kaltim PT REA Kaltim Plantations
SYB PT Sasana Yudha Bhakti
The terms "FFB", "CPO" and "CPKO" mean, respectively, "fresh fruit bunches", "crude palm oil" and "crude palm kernel oil".
References to "dollars" and "USD" are to the lawful currency of the United States of America; to "rupiah" are to the lawful currency of Indonesia; and to "sterling" or "pounds sterling" are to the lawful currency of the United Kingdom.
Press enquiries to:
R.E.A. Holdings plc
Tel: 020 7436 7877
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ISIN: GB0002349065 Category Code: IR TIDM: RE. LEI Code: 213800YXL94R94RYG150 Sequence No.: 121677 EQS News ID: 1231866 End of Announcement EQS News Service =------------------------------------------------------------------------------------
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(END) Dow Jones Newswires
September 08, 2021 02:00 ET (06:00 GMT)
