Feronia Inc. ("Feronia" or the "Company") (TSX VENTURE: FRN) today
released its audited annual financial results for the year ended
December 31, 2010. All amounts in this release are expressed in US
dollars unless otherwise indicated.
James Siggs, CEO of Feronia, commented: "We are pleased to
report that Feronia continued to track according to plan in 2010.
As expected, palm oil production was down on a quarter-over-quarter
basis in the last quarter of 2010 due to the normal seasonality of
production. However on a year-over-year basis, production was up
and we have met our key operational targets."
Fourth Quarter and 2010 Financial Highlights:
-- Crude palm oil production increased by 31% compared to 2009.
-- EBITDA was negative $244,580 for the quarter and negative $6,160,009 for
the year, an improvement from negative $10,828,544 for the year 2009.
-- Net loss was $139,508 for the quarter and $6,529,254 for the year
compared to a loss of $10,872,281 for the year 2009.
-- RTO costs of $1,343,940 were fully expensed in the year.
-- Basic and diluted EPS for the year was negative $0.09 compared to
negative $0.70 for 2009.
-- Cash balance as at December 31, 2010 was $8,907,686 compared to $477,617
as at December 31, 2009.
Achievement of Milestones in 2010:
During the year we completed the listing of our shares on the
TSX Venture Exchange and an equity financing of $16,825,706 to fund
the rehabilitation of our oil palm plantations. Excluding the costs
associated with completing the listing, our yearly operating loss
was down substantially compared to 2009. "Following the completion
of the financings in September 2010 and March 2011, Feronia's
current business plan is well funded. In the fourth quarter of 2010
and the first quarter of 2011, the Company has made several key
investments in its oil palm plantations and arable farming
operations as part of its aggressive growth program," said Mr.
Siggs.
Revenue
During the fourth quarter, Feronia's revenue was $877,939, a
decrease of 32% from $1,290,793 in the third quarter.
During the year, Feronia produced approximately 30,420 tonnes of
palm fruit which were processed to produce 4,952 tonnes of Crude
Palm Oil ("CPO"), representing an increase of approximately 31% on
a year-over-year basis. As at December 31, 2010, Feronia had 16,868
hectares of oil palm planted including 1,027 hectares of replanting
in the year.
Selling, General and Administration Expenses
SG&A expenses decreased to $7,919,058 in 2010 compared to
$11,137,465 2009 which included a write down of $10,569,288 on the
fair value of the assets on the acquisition of PHC.
Net Loss for the Year
The net loss for the fourth quarter of 2010 was $139,508
compared to a loss of $2,989,901 in the third quarter of 2010. The
net loss for 2010 was $6,529,254 compared to $10,872,281 in 2009.
However, the results for 2009 include only four months post
acquisition of Feronia's subsidiary Plantations et Huileries Du
Congo S.C.A.R.L, whereas the 2010 results include a complete year
and also include the costs associated with the reverse takeover
transaction.
Capital Expenditures
Capital expenditures in the fourth quarter increased by
$1,544,290, totalling $5,426,933 for the year. The major items were
as follows:
1. Rehabilitation of the palm oil mills to increase oil extraction rates
and operating efficiencies.
2. Replanting programme of 1,027 hectares on the oil palm estates.
3. Development of the arable farm, reclaiming 600 hectares.
Recent Developments by Business Segment
Palm Oil Operations:
1. Global spot CPO prices have remained firmly over $1000 per tonne having
reached a high of $1,335 in the first quarter of 2011.
2. An order has been received from a West African operator for 756,000 oil
palm seeds for delivery in 2011.
3. The Company planted 1,027 hectares in the year, over its annual target
of 1,000 hectares.
Arable Farm Operations:
1. Land preparation is well advanced, with 1,396 hectares of abandoned
farmland reclaimed and ready for cultivation at the end of March 2011.
2. Key capital equipment such as tractors, combines, sowing equipment and a
grain drying installation have been purchased and delivered to site in
Q1 2011 in time for the first commercial sowing of edible beans.
3. 111 hectares of rice were planted in March 2011 in order to provide seed
for the major sowing in September 2011.
Outlook
"Feronia continues to expand its operations according to plan,"
said Ravi Sood, Chairman of Feronia. "Having completed a
substantial equity issue in the first quarter of 2011, the Company
is now able to accelerate the expansion of its oil palm plantations
by increasing its planting activities and building a new high
throughput palm oil mill earlier than previously budgeted. We
anticipate that this will improve overall efficiencies and help
reduce production costs. The Company is also progressing the
expansion of its arable farming operations and evaluating other
related opportunities including the local production of various
fertilizers. With the price of food and vegetable oils reaching new
highs around the world the commercial opportunity for Feronia and
its strategic importance globally continues to grow."
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.
Cautionary Notes
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.
Neither the TSX Venture Exchange nor its regulation services
provider (as that term is defined in the policies of the TSX
Venture Exchange) accepts responsibility for the adequacy or
accuracy of this release.
Contacts: Chairman, Feronia Inc. Ravi Sood (647) 987-7663
Ravi.sood@feronia.com www.feronia.com
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