(Alliance News) - Equatorial Palm Oil PLC on Tuesday said the the long-term impact of the Covid-19 pandemic is still to understood, as it posted a sharply narrowed interim loss.
The palm oil producer recorded a pretax loss of USD53,000 for the six months to March-end, significantly lower than a USD4.7 million loss in the comparative year-ago period.
The narrowed loss was due to absence operating losses related to an associate. In the first half of financial 2019, the company recorded a USD4.7 million loss related to an associate.
Revenue for the interim period declined 74% to USD22,000 from USD85,000.
Equatorial Palm Chair Michael Frayne said: "The recent turmoil in world markets resulting from the Covid-19 pandemic will undoubtedly affect palm oil as governments worldwide have in the most part temporarily shut down our day to day routines.
"Management are working very hard with the Liberian health officials to put in place preventative measures to stop the spread of this virus which will enable our operations to continue with the safety and well-being of our staff and communities being our main priority".
On Monday, Equatorial Palm Oil had sold its 50% interest in loss-making Liberian Palm Developments Ltd to Kuala Lumpur Kepong Berhad for a nominal consideration of GBP1.
Kuala Lumpur Kepong, which owns 63% stake in Equatorial Palm Oil, is a manufacturer of renewable palm-based oleochemical products and derivatives in the oleochemical industry.
Liberian Palm Developments holds concessions to the Palm Bay and Butaw palm oil estates in Liberia, granted for 50 years. The Palm Bay estate comprises 13,007 hectares of land as part of the concession, as well as expansion areas totalling 20,234 hectares. The Butaw estate comprises 8,011 hectares of land as part of the concession, as well as expansion areas totalling 46,539 hectares.
The proposed stake sale will eliminate any future costs to the company associated with its interest in Liberian Palm Developments and enable Equatorial Palm to seek to acquire another asset which is more likely to generate value for shareholders in the near to medium term, Equatorial Palm Oil had said.
Shares in Equatorial Palm Oil were up 4.1% at 0.37 pence each in London on Tuesday afternoon.
By Tapan Panchal; tapanpanchal@alliancenews.com
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