Feronia Inc. Reports Q3 2019 Results
TORONTO, Nov. 29, 2019 (GLOBE NEWSWIRE) — Feronia Inc. (“Feronia” or the “Company”) (TSX-V: FRN) today released its unaudited financial results for the three and nine months ended September 30, 2019 (“Q3 2019”). All amounts in this release are expressed in US dollars unless otherwise indicated.
Q3 2019 HighlightsProduced 46,320 tonnes of fruit (Q3 2018: 52,844 tonnes), a year-over-year decrease of 12%Produced 9,016 tonnes of Crude Palm Oil (“CPO”) (Q3 2018: 11,078 tonnes), a year-over-year decrease of 19%Revenue of $7.7 million (Q3 2018: $6.9 million), a year-over-year increase of 12%, primarily from the sale of 11,265 tonnes of CPO at an average price of $645 per tonne (Q3 2018: 8,750 tonnes at $784 per tonne)Net loss for Q3 2019 of $2.9 million (Q3 2018 net loss: $2.2 million)EBITDA loss for Q3 2019 of $422,000 (Q3 2018 EBITDA: $1,336,000Subsequent EventsEntered into new $16 million short term loan facilities with CDC Group plc.Appointed Bernard Francois as the Company’s new Chief Executive OfficerFrank Braeken, Executive Chairman of Feronia Inc. commented: “Despite showing strong year-on-year revenue and volume growth for the first nine months of the year, depressed market prices, extremely challenging operating conditions and delays in the execution of capital projects mean that a great deal of work is required to ensure the financial viability of the business.“In the longer term, it is vital that we reduce the cost of production and the completion of capital projects, such as the construction of the Lokumete mill, are essential to achieve this.“However, in the shorter term, significant additional funding is required to secure the Company’s survival and ongoing development as a key employer and provider of palm oil in the Democratic Republic of the Congo.“As a result, the Company is exploring a number of strategic and financial options and is in detailed and ongoing discussions with its principal shareholders and lenders regarding future funding of the Company.”For further information please contact:About Feronia Inc.Feronia is an agribusiness operating in the Democratic Republic of the Congo (DRC).At the heart of Feronia lies a long established palm oil business, Plantations et Huileries du Congo (PHC), which has three remotely located plantations; Lokutu, Yaligimba and Boteka.When Feronia acquired its palm oil business from Unilever in 2009, it had suffered from years of underinvestment and considerable disruption caused by conflict in the DRC. Our initial focus has been on rebuilding the business and resuming production to secure its future and the livelihoods of the thousands of people we directly employ.Feronia’s plantations produce crude palm oil (CPO) and palm kernel oil (PKO). CPO is part of the staple and traditional diet of the Congolese and, with our products sold locally in the DRC, we are well placed to help decrease reliance on imports and increase food security and quality.Feronia prides itself on being the guardian of our 108 year-old palm oil business and its employees, communities, and environment. We have a long term commitment to improve the living and working environment of our employees and their communities and are committed to sustainable agriculture, environmental protection and community inclusion. Feronia has in place an Environmental and Social Action Plan which is focused on implementing environmental and social best practice and improving social infrastructure.Feronia is implementing IFC/World Bank standards for environmental and social sustainability. Our oil palm replanting programme is brownfield in nature – replacing old palms with new – and it has no reliance on deforestation.Feronia’s management team has extensive experience in managing both plantations and farming operations in emerging markets.For more information please see www.feronia.comCautionary NotesExcept 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 “anticipates”, “plans”, “proposes”, “estimates”, “intends”, “expects”, “believes”, “may” and “will”. 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: risks related to foreign operations (including various political, economic and other risks and uncertainties), the interpretation and implementation of the “Loi Portant Principes Fondamentaux Relatifs A L’Agriculture”, termination or non-renewal of concession rights or expropriation of property rights, political instability and bureaucracy, limited operating history, lack of profitability, lack of infrastructure in the DRC, high inflation rates, limited availability of debt financing in the DRC, fluctuations in currency exchange rates, competition from other businesses, reliance on various factors (including local labour, importation of machinery and other key items and business relationships), the Company’s reliance on one major customer, lower productivity at the Company’s plantations and arable farming operations, risks related to the agricultural industry (including adverse weather conditions, shifting weather patterns, and crop failure due to infestations), a shift in commodity trends and demands, vulnerability to fluctuations in the world market, the lack of availability of qualified management personnel and stock market volatility. Details of the risk factors relating to Feronia and its business are discussed under the heading “Risks and Uncertainties” in Feronia’s management’s discussion and analysis for the year ended December 31, 2018, a copy of which is available on the Company’s SEDAR profile at www.sedar.com. 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.The Company now reports EBITDA (earnings before deducting interest, taxes, depreciation and amortization) and EBITDA per share as, whilst both are non-GAAP measures, the Company believes that EBITDA is useful additional information to management, the Board and investors as it provides an indication of the operational results generated by its business activities prior to taking into consideration how those activities are financed and taxed and also prior to taking into consideration asset depreciation and amortization and it excludes items that could affect the comparability of our operational results and could potentially alter the trends analysis in business performance. Excluding these items does not necessarily imply they are nonrecurring, infrequent or unusual. EBITDA is also used by some investors and analysts for the purpose of valuing a company. Investors are cautioned that EBITDA should not be construed as an alternative to operating earnings or net earnings determined in accordance with IFRS as an indicator of the Company’s financial performance or as a measure of the Company’s liquidity and cash flows. EBITDA does not take into account the impact of working capital changes, capital expenditures, debt principal reductions and other sources and uses of cash, which are disclosed in the consolidated statements of cash flows.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.