20 Aug 2019 10:56
20 August 2019
EQUATORIAL PALM OIL plc
("EPO" or the "Company")
Operational Update
Equatorial Palm Oil plc (AIM: PAL), the AIM listed palm oil development and production company with operations in Liberia, West Africa, wishes to provide an update with respect to its palm oil operations in Liberia.
Palm Bay Estate
On 26 June 2019, the Company announced that crude palm oil ("CPO") was being transported from Palm Bay estate to the Company's 3,000 MT storage tank export facility at the port of Buchanan.
One of the customers of the operating company at Palm Bay estate (Libinc Oil Palm Inc.) has confirmed that it will purchase its next quantity of CPO (2,700 MT) and the customer will arrange for the CPO to be collected by parcel tanker ship from the port of Buchanan. This shipment will likely take place in the next 4 weeks.
This is a significant milestone for the Company to have the export facility up and running and enabling our customers to purchase our oil palm products in bulk from the port of Buchanan. We look forward to confirming that the storage tank export facility will be fully commissioned in Q4 2019 at the port of Buchanan.
Butaw Estate
As was announced to the market on 26 June 2019, as a result of the downsizing at Butaw estate management are assessing the nature of impairment at Butaw estate to be reflected in the full year results of EPO for the year ending 30 September 2019.
The Company has been notified by its parent company Kuala Lumpur Kepong Berhad ("KLK"), that KLK (in its results for the nine months ending 30 June 2019 announced today) has made an impairment in its accounts in respect of its investment in the joint venture company Liberian Palm Developments Limited ("LPD") as a result of the impairment of assets at Butaw estate (Liberia Forests Products Inc.) in the amount of USD35,107,359. Liberia Forests Products Inc. is the operating company at Butaw estate and a wholly owned subsidiary of LPD.
EPO holds a 50% joint venture share in LPD and as at 31 March 2019 the value of its investment in LPD as reflected on the EPO balance sheet was USD10,365,335. It is highly likely that the Company will also make an impairment in its accounts to be reflected in the full year results ending 30 September 2019, which would result in reducing the carrying value of its investment in LPD to nil. In the event of such impairment, this will result in a significant net loss for the year ending 30 September 2019.
Geoffrey Brown, Executive Director of EPO, commented:
"Having the bulking station and export facility at the port of Buchanan up and running is the last part of completing our end to end supply chain. This now allows our customers to purchase our oil palm products in bulk from the working port."
This is another significant milestone for the Company and also for Liberia which is looking to re-invigorate the agricultural industry. EPO is proud to be playing its part in that regard and continues to work with all key stakeholders."
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For further information, please visit www.epoil.co.uk or contact:
Equatorial Palm Oil plc Geoffrey Brown (Executive Director)
| +44 (0) 20 7268 4874 |
Strand Hanson Limited (Nominated Adviser) James Harris / James Bellman
|
+44 (0) 20 7409 3494 |
Mirabaud Securities Limited (Broker) Peter Krens |
+44 (0) 20 7484 3510 |
Notes to editors:
Equatorial Palm Oil plc is an AIM listed crude palm oil developer and producer with palm oil estates in Liberia, West Africa. The Company was founded in 2005 and is focused on becoming a global, sustainable producer of high quality palm oil to regional and international markets.
With a land position in Liberia through its operating subsidiary Liberian Palm Developments Limited ("LPD"), the Company is geographically well positioned to serve the international and regional markets and is committed to making a positive impact on the communities in which it operates through investment in local schools, health clinics, housing and infrastructure.
The Company's largest shareholder and 50:50 joint venture partner in LPD is KLK. KLK is one of the largest palm oil producers in the world and the Company will greatly benefit from their many years of expertise in oil palm development.
The information contained within this announcement is deemed by the Company to constitute inside information as stipulated under the Market Abuse Regulations (EU) No. 596/2014.