R.e.a.hldgs. Regulatory News (RE.)

R.E.A. HOLDINGS PLC (the "company")

HALF YEARLY REPORT 2013

HIGHLIGHTS

· Crop of fresh fruit bunches of 265,215 tonnes (2012: 271,773 tonnes) with extraction rates of 21.5 per cent for CPO (2012: 23.3 per cent), 4.6 per cent for palm kernels (2012: 4.7 per cent) and 36.1 per cent for CPKO (2012: 38.1 per cent)

· Loss before tax of $2.5 million (2012 profit before tax: $24.0 million)

· Revenue, and therefore result before tax, negatively affected by lower prices than in 2012 and by the impact of past village disruptions

· Settlement agreements reached with villages at the beginning of the year continuing to be respected and relationships with local communities much improved. Production now at satisfactory levels; with good bunch formation, much improved cropping expected in the second half

· Development of both group and smallholder plantings making good progress; planted areas projected to total some 34,000 - 36,000 hectares and 6,000 hectares respectively by the end of 2013 with development initiated on further areas

· Arrangements for the supply of biogas generated electricity to the Indonesian state electricity company ("PLN") at an advanced stage

· Outline agreements reached with third parties to operate coal concessions on a basis providing an income stream to the group

· Directors currently intend that a first interim dividend in respect of 2013 will be paid in January 2014 and maintained at the 2012 rate of 3½p per share and a scrip issue to ordinary shareholders of 3 new 9 per cent cumulative preference shares for every 50 ordinary shares will be proposed in due course

SUMMARY OF RESULTS FOR THE SIX MONTHS ENDED 30 JUNE 2013

CHAIRMAN'S STATEMENT

Results

The group made a loss before tax for the six months to 30 June 2013 of $2.5 million. This compares with a profit before tax for the corresponding period of 2012 of $24.0 million. An industry wide temporary slowdown in fresh fruit bunch ("FFB") formation and ripening, coupled with lower prices for crude palm oil ("CPO") and crude palm kernel oil ("CPKO") would always have meant that the group would have had to expect a lower level of profit than in the corresponding period, but the conversion of what would still have been a profit into a loss was the consequence of the previously reported village disruptions during the first quarter. These negatively impacted crop yields, oil extraction and oil quality as detailed under "Agricultural operations" below and resulted in a significant loss of revenue. Because a large component of the group's costs does not vary in the short term, a significant proportion of such loss of revenue resulted in an almost equal loss of profit.

The following table provides estimates of the net reduction in revenue stemming from each of the items concerned:

Components of the results

Cost of sales for the period was wholly attributable to the agricultural operations. This is in contrast with 2012 for which the cost of sales of $33.6 million included $3.3 million in respect of the now suspended coal trading operations. Accordingly, the reported figure of $34.4 million for the period compares with a figure of $30.3 million for 2012. Of the increase of $4.1 million, some $1.2 million represented an increase in the cost of purchases of external FFB which amounted to $4.5 million against $3.3 million in 2012 (the combined effect of the increased volume of external FFB purchased and a lower average purchase price). The balance of the increase in cost of sales principally reflected the impact of a significant rise in labour costs (a consequence of a provincial government dictated increase in the local minimum wage of slightly over 50 per cent) and an increase of 621 hectares in the area classified as mature.

The negative impact of the increased labour costs was mitigated, to an extent, by savings on fuel and inorganic fertiliser. The former resulted from the switch from diesel to biogas for electricity generation (as referred to under "Agricultural operations" below) and the latter from the beneficial effects of regular compost applications. These savings will continue and further savings are expected to be achieved from reductions in overtime working. A weaker Indonesian rupiah was also a positive factor in the six months to 30 June 2013 and, if the further weakness in the rupiah experienced in recent weeks is maintained, may have a larger positive impact on costs for the second half of 2013.

The net gain on valuation of the group's biological assets included in operating profit for the six months to 30 June 2013 amounted to $1.0 million (2012: $3.8 million). The discount rates applied, which were the same as in 2012, were 15 per cent for the estates owned by the company's two principal Indonesian operating subsidiaries, PT REA Kaltim Plantations ("REA Kaltim") and PT Sasana Yudha Bhakti ("SYB") and 18 per cent for all other estates owned by the group. The gain reflects the formulaic nature of the valuation methodology and the continuing extension planting programme.

Administrative expenses for the period amounted to $8.0 million (2012: $7.2 million). Comparison with 2012 is complicated by movements in exchange gains and losses and in the proportion of the expenses charged as additions to biological assets. Also the 2012 expenses were weighted disproportionately to the second half of the year (a timing difference that is not expected to recur in 2013). Annualising the administrative expenses attributable to Indonesian operations and the UK head office for the six months to 30 June 2013 shows that the figures are much in line with the expenses reported for the 2012 year. Inflationary cost pressures remain but increased salary and wage costs and greater expenditure on liaison with local villages were offset by savings in other administrative costs (and, in particular, administrative costs of the coal operations).

Finance costs at $5.6 million (2012: $3.9 million) reflected increased utilisation of borrowing facilities. As with administrative expenses, comparison with 2012 is complicated by certain items. In the case of finance costs, these are exchange gains and losses, mark to market movements on the group's hedging instruments and movements in the proportion of finance costs charged as additions to biological assets. Annualising actual interest payable shows a year on year increase of approximately $1.0 million, consistent with the increase in the average level of borrowings.

Notwithstanding the loss before taxation, the results reported include a tax charge for the six months to 30 June 2013 of $0.3 million (2012: $7.1 million). This reflects the negative impact of Indonesian withholding taxes incurred on intra-group interest payments and the write off of deferred tax credits on prior year Indonesian tax losses that are becoming time expired.

For the reason given in note 4 to the financial statements, no segmental analysis has been provided. With limited activity during the period in the stone quarry and coal operations, the impact of those operations on the reported figures was not significant.

Ordinary dividend

Taking account of the now more stable situation on the group's estates, the directors consider that the dividends in respect of 2013 can be maintained at the same level as those in respect of 2012. Accordingly, in the absence of unforeseen circumstances, the directors intend that a first interim dividend in respect of 2013 should be paid in January 2014 at the rate of 3½p per ordinary share (first interim dividend in respect of 2012: 3½p).

It has been the policy of the directors for some years to propose capitalisation issues of new preference shares as a method of augmenting returns to ordinary shareholders in periods in which good profits are achieved but demands on cash resources for expansion limit the scope for payment of ordinary dividends. The performance of the group in the six months to 30 June 2013 would not usually be regarded by the directors as sufficient to support such an augmentation of returns to ordinary shareholders. However, assuming that the negative impact of the village disruptions can be regarded as "one-off" and considering that the outlook for the group is now positive, the directors have concluded that they should, notwithstanding the loss being reported, recommend repeating the capitalisation issue made in 2012.

Accordingly, the directors propose that the company should make a capitalisation issue of new preference shares to ordinary shareholders, on the basis of 3 new 9 per cent cumulative preference shares for every 50 ordinary shares held. A circular setting out details of the proposed capitalisation issue will be issued to shareholders in due course.

Agricultural operations

The crop of FFB harvested during the six months to 30 June 2013 totalled 265,215 tonnes, compared with 271,773 tonnes for the corresponding period in 2012. External purchases of FFB for the six months to 30 June 2013 totalled 42,371 tonnes (2012: 23,025 tonnes). Rainfall for the first half of 2013 averaged 2,087 millimetres across the group's operations and was over 15 per cent higher than the 1,791 millimetres received in the first half of 2012.

During the six months to 30 June 2013, processing of the group's own production and externally purchased FFB, together totalling 307,586 tonnes (2012: 294,798 tonnes), produced 65,953 tonnes of crude palm oil (2012: 68,451 tonnes), 13,977 tonnes of palm kernels (2012: 13,683 tonnes) and 5,002 tonnes of crude palm kernel oil (2012: 5,386 tonnes). These production figures reflect extraction rates of 21.5 per cent for CPO (2012: 23.3 per cent), 4.6 per cent for palm kernels (2012: 4.7 per cent) and 36.1 per cent for CPKO (2012: 38.1 per cent).

As previously reported, crops during January and early February were adversely affected by continuing village issues; some limited harvesting blockages had a further, but less material, negative impact on crops in March and early April. Whilst regular harvesting operations were resumed in mid-April, it took time to reduce the harvesting intervals across the business to normal levels so that the delays in harvesting adversely affected oil extraction rates and oil quality throughout most of the six month period to 30 June 2013. Oil extraction rates were also negatively affected by poor quality FFB deliveries from smallholders which, against the background of the village disruptions, the group elected not to reject.

As noted earlier, there have been industry wide reports from oil palm growers in Malaysia and Indonesia of a slowdown in bunch formation and ripening during 2013. This has clearly been the result of biological and climatic factors and the group has been affected in the same way as other oil palm growers. Crops for July and continuing into the first part of August were again below budgeted levels (although in the case of August this was partly attributable to labour holidays during the festivities at the end of the Ramadan religious period). However, in recent days cropping has increased to a higher level and, with local management now reporting good bunch formation and evidence of an acceleration in ripening, the group can expect significantly improved cropping in the closing months of the year.

Village settlements reached in January and February continue to be respected, outstanding matters are progressively being resolved and relationships with local communities are much improved. In addition, the group is now enforcing quality controls on FFB purchases from smallholders. As a result, oil extraction rates and oil quality have returned to satisfactory levels.

The CPO price remained steady throughout the first half of 2013 and currently stands at $880 per tonne, CIF Rotterdam. The average price for the six months to 30 June 2013 was $846 as compared with an average for the corresponding period in 2012 of $1,095. As already noted, CPO production levels in both Malaysia and Indonesia (the main producing areas) have been below expectation and this has led to a reduction in stock levels. It appears that market concerns at the prospect of a very large Northern Hemisphere soya bean crop have been inhibiting any material upward movement in CPO prices but recent reports by the US Department of Agriculture suggest that the forthcoming North American crops will be lower than previously projected (although still at record levels). Concerns remain that large plantings of soya bean in South America will result in a further very large soya bean crop in the first half of 2014 but, offsetting this, it may reasonably be expected that the current lower CPO price will promote increased CPO consumption in the key markets of India and China. Moreover, there are reports of increased biodiesel consumption in South East Asia.

The average selling price for the group's CPO for the six months to 30 June 2013 on an FOB basis at the port of Samarinda, net of export duty, was $625 per tonne (2012: $830 per tonne). The average selling price for the group's CPKO on the same basis was $583 per tonne (2012: $958 per tonne). The group has no outstanding forward sales at fixed prices. The selling prices achieved reflect not only the lower level of the CPO and CPKO markets as compared with 2012 but also discounts of on average $60 per tonne for the poorer quality oil produced during the period.

With the recent commissioning of the third oil mill and the upgrading and expansion of the two older oil mills now completed, the group has, for the immediate future, sufficient processing capacity to handle all crop from its own estates and from the growing number of maturing smallholder plantings in the vicinity. The group, in consultation with the mill workforce, is introducing three shift working with effect from August 2013. This will result in some overall reduction in costs brought about by savings in overtime.

Electricity generated from the two methane capture plants commissioned in 2012 now supplies a significant proportion of the group's mills, offices and housing, thereby substantially reducing the group's consumption of diesel oil for power generation, with material consequential and on-going savings in energy costs as well as in greenhouse gas emissions.

Arrangements for the supply of biogas generated electricity to the Indonesian state electricity company ("PLN") are reaching an advanced stage. The group has ordered three additional gas engine generators to provide the 3 MW of capacity that is initially required by PLN. Concurrently, PLN has issued a public invitation to tender for the provision of the electrical reticulation needed to connect the group's generating stations to the adjacent villages that PLN plans to supply. It is hoped that the installation of the additional generators and the provision of the necessary electrical reticulation can be completed, and that the group can obtain the licences that it requires to generate and sell electricity, by the end of 2013.

Agricultural land allocations and development

Planting out of the 5,000 hectares being developed by the subsidiary, PT Kutai Mitra Sejahtera ("KMS") is continuing while development has now started on a first 2,000 hectare portion of the land areas held by the subsidiary, PT Putra Bongan Jaya ("PBJ"). Planting operations at KMS were affected by the heavy rains and flooding experienced in East Kalimantan in the second quarter but the planting rate has since increased and the directors remain confident that the full 5,000 hectares to be planted at KMS will be completed by the end of 2013. As previously explained, a minor proportion of the KMS area (approximately 800 hectares) has been earmarked for transfer to village cooperatives.

Compensation payable to local villages has now been agreed in respect of a further area of over 2,000 hectares within PBJ and compensation discussions in respect of land areas held by the subsidiary, PT Cipta Davia Mandiri ("CDM"), are making good progress. This will leave the group well positioned to achieve its immediate target of 44,000 hectares under oil palm on its existing titled areas (after exclusion of the 800 hectares at KMS earmarked for reallocation to cooperatives and of the areas to be relinquished pursuant to the prospective SYB swap arrangements referred to below). Of the 44,000 hectares, it is expected that between 34,000 and 36,000 hectares will have been planted by year end (the precise amount will depend upon the speed of planting out achieved at PBJ) and that preparation work will have been initiated on a part of the area scheduled for planting in 2014.

The overall area of fully titled agricultural land held by the group remains unchanged at 70,584 hectares as stated in the group's 2012 annual report published in April 2013. Agreement in principle has now been reached on a basis for implementation of the agreed swap arrangements for land held by the subsidiary company, SYB, under which land currently held by SYB but the subject of overlapping coal rights held by a third party is to be swapped for land held by PT Praesetia Utama (by way of acquisition of the shares of that company). Subject to completion of these arrangements, the fully titled land areas would increase to 76,124 hectares. The SYB areas to be surrendered pursuant to the swap arrangements include some areas that are already planted or prepared for planting. In view of the expected relinquishment of these areas, they are not being developed further for the time being.

The group continues actively to pursue the titling of the untitled land allocations that it currently holds and to explore opportunities to acquire additional land areas suitable for development in the vicinity of its existing operations. The directors hope that existing untitled land allocations, coupled with the titled land areas to be acquired pursuant to the SYB swap arrangements, will provide sufficient land suitable for oil palm planting for the group's own use to permit further expansion of the group's total planted area from the immediate target of 44,000 hectares to approximately 60,000 hectares.

Stone and coal operations

Work is continuing on the establishment of a quarry at the stone concession to provide stone for building and maintenance of infrastructure in the group's agricultural operations and for sale to users of stone in the surrounding area. It is planned to reorganise the ownership of the stone concession so as to bring it under the direct control of REA Kaltim; the quarry will then be integrated with the group's agricultural operations.

An outline agreement has been signed relating to the coal concession in the southern part of East Kalimantan and it is expected that an agreement relating to the coal concession near Kota Bangun will be concluded in the near future. Both agreements provide for the relative concessions to be operated in cooperation with third parties on a basis that will provide an income stream to the group calculated by reference to coal prices prevailing from time to time. This will minimise further coal related costs to the group and will hopefully permit recovery of the carrying value of the concessions with some upside in the event of a recovery in coal prices.

Environmental and social responsibility

In support of its on-going commitment to producing palm oil in a responsible manner, the group is putting in place measures better to monitor and manage the environmental and social impacts of its activities. Following publication of its first carbon footprint report in February 2013, the group published its first sustainability report in July 2013. The carbon footprint and the sustainability reports are both available for download from the group's website at: www.rea.co.uk/rea/en /sustainability/reports

The group's inaugural carbon footprint report identifies and quantifies the greenhouse gas ("GHG") emissions associated with the production of CPO and CPKO at the group's oil mills in 2011. This will facilitate the design and implementation of effective strategies for reducing the group's GHG emissions and will provide a baseline against which progress in achieving GHG reductions can be monitored and reported.

The group's first sustainability report relates to the calendar year 2012 and has been produced in accordance with the requirements of the Global Reporting Initiative. The report outlines the measures being taken to manage the aspects of sustainability that are considered to be of greatest relevance to the group's business and of most interest to the group's stakeholders. It also includes a number of key performance indicators which provide a baseline against which the group's economic, environmental and social performance can be monitored. It is the intention that a sustainability report will be published biennially.

In targeting 44,000 hectares of oil palm plantings on its existing titled areas and further expansion of some 16,000 hectares on other areas, the group has paid due regard to its obligations to procure smallholder development. At 31 December 2012, smallholder areas already planted amounted to some 5,300 hectares. These should be increased during 2013 by the planned reallocation of 800 hectares at KMS and planting of a further 250 hectares elsewhere, taking the total by year end to some 6,350 hectares. Pursuant to the settlement agreements signed with REA Kaltim and SYB villages in January and February, the group will allocate part of the land areas held by the subsidiary, PT Persada Bangun Jaya ("PBJ2"), to develop 2,450 hectares of oil palm for cooperative schemes for the benefit of these villages. Work on completing this allocation is proceeding well with good cooperation from the villages. It is expected that land preparation in the areas concerned will start within the next few months and planting up will then follow as rapidly as possible. In addition, the group has made allowance in planning its own extension planting programme for the provision, within the areas prospectively available to the group, of land sufficient for a further 7,500 hectares of smallholder oil palm plantings.

In addition to the steps being taken to ensure satisfaction of the smallholder planting commitments agreed as part of the January and February settlements with villages, the group is enhancing its village liaison staffing with a view to facilitating early discussion of any village concerns that may arise in future. The group will continue to support appropriate community development projects within the villages.

Continuing accreditation of the group's palm oil milling and storage facilities in compliance with the Roundtable on Sustainable Palm Oil ("RSPO") Supply Chain Certification System ("SCCS") allows the group to sell its CPO and CPKO as certified sustainable oil. Sales of Greenpalm certificates under the RSPO book and claim model during the first half of 2013 were made in respect of some 17,500 tonnes of CPO and 8,000 tonnes of CPKO. In addition, the group made sales of 32,500 tonnes of International Sustainability and Carbon Certification ("ISCC") CPO during the first half of 2013. ISCC accreditation permits CPO to be used to manufacture biodiesel that meets the requirements of the European Union Renewable Energy Directive. Overall, premia derived from the group's sustainability credentials provided some $0.7 million of incremental revenue.

RSPO surveillance audits of the group's two older mills, the estates of REA Kaltim and the established estates of SYB were conducted during the first quarter of 2013 and accreditation has been retained for a further year.

The group has been accruing credits for Carbon Emission Reduction ("CER") in respect of the two methane capture plants since their commissioning in April and October 2012 respectively. Credits have been issued during July and August 2013 for a total of 37,893 CERs achieved during the plants' respective periods of operation from commissioning until 31 December 2012. All such CERs have been sold forward at prices agreed at the outset of the methane capture project and together should realise some $0.5 million. This CER revenue has not been recognised in the group's accounts to date and will be taken up when received.

Financing

The group continues to be financed by a combination of debt and equity (comprising ordinary and preference share capital). Following a placing in May 2013 of 1.67 million ordinary shares at 425p per share, total equity including non-controlling interests amounted to $312.7 million at 30 June 2013 against $315.0 million at 31 December 2012.

Capital expenditure and a net absorption of cash in operating activities during the six months to 30 June 2013 were financed from a combination of the group's existing cash balances, the net proceeds of the May placing of ordinary shares and further drawings of some $10 million against a working capital facility with PT Bank DBS. The net absorption of cash in operating activities was principally accounted for by tax prepayments (which were made at rates based on 2012 profits and will be refundable to the extent not required to meet 2013 tax liabilities), prepayments against capital projects and a reduction in payables.

As a result, group indebtedness and related engagements at 30 June 2013 totalled $172.8 million against $163.5 million at 31 December 2012. The total at 30 June 2013 comprised $15.9 million nominal of 7.5 per cent dollar notes 2012/14 (carrying value: $15.7 million), $34 million nominal of 7.5 per cent dollar notes 2017 (carrying value: $33.3 million), £34.5 million of 9.5 per cent guaranteed sterling notes 2015/17 (carrying value: $50.7 million), $11.9 million in respect of the hedge of the principal amount of the sterling notes, term loans from Indonesian banks totalling $36.2 million and other indebtedness, principally comprising drawings under working capital lines, of $25 million. Against this indebtedness, the group held cash and cash equivalents of $15.1 million (31 December 2012: $26.4 million).

For the reasons already detailed, the group recorded a loss for the six months to 30 June 2013 and this, coupled with the negative impact of the village disruptions on the 2012 results, has meant that internal cash generation over the past eighteen months has been lower than the directors had originally expected. It has always been the group's policy to carry reserve liquidity sufficient to provide some protection in the event of an unexpected downturn and this policy has meant that the group has been able to maintain its development programme notwithstanding the lower than expected cash generation. However, an inevitable consequence has been some depletion in the liquidity reserve. The May placing of ordinary shares was made to restore the reserve to a more comfortable level and to keep the group's debt equity ratio at a level that the directors regard as satisfactory.

Whilst the group will tailor its rate of extension planting to the funds available, the directors hope that the group's expansion can continue at a good pace given that only limited expenditure on further milling capacity should be needed over the next four years.

The group is currently considering offers of medium term loans from regional banks in South East Asia with a view to refinancing repayments due over the next two and a half years on the group's outstanding sterling and dollar notes and to ensuring access to further funds should the need arise.

Strategic direction

The planned restructuring of the Indonesian plantation subsidiaries into a single sub-group headed by the principal operating subsidiary, REA Kaltim, was completed in May 2013. It remains the intention in due course to make a public offering of a minority shareholding in REA Kaltim (probably 20 per cent), combined with a listing of REA Kaltim's shares on the Indonesia Stock Exchange in Jakarta. As previously announced, such listing is now unlikely to take place until 2014 at the earliest and until sufficient time has elapsed for the REA Kaltim sub-group to have reported figures that reflect normal cropping levels.

On 11 June 2013, an extraordinary general meeting of shareholders provided the authorisations necessary to permit the company to acquire, within certain limits, its own ordinary shares and then later to resell the shares so acquired. This is with the intention that the company will, from time to time, purchase smaller holdings of ordinary shares, retain the shares purchased until a holding of a reasonable size has been accumulated and then arrange to place that holding with substantial investors.

Prospects

Although the results being reported are a disappointment, they relate to a period that is over. Relations with local villages have improved, agricultural operations have returned to normal and operating costs remain under good control with the methane capture and composting initiatives of recent years continuing to prove their worth and with the negative effect of the recent provincial authority mandated increase in wages mitigated by a weaker Indonesian rupiah. The extension planting programme is going well, progress has been made in converting the group's coal assets into cash and continuing work on the group's land bank is providing a realistic prospect of increasing the group's planted hectarage to 60,000 hectares without further material land acquisitions.

The directors believe that the group is now recovering from a difficult period and that, as the recovery continues, shareholders can look forward to significant growth in the group's business from successful implementation of the development programme now in hand.

RICHARD M ROBINOW

Chairman

27 August 2013

RISKS AND UNCERTAINTIES

The principal risks and uncertainties affecting the business activities of the group as at the date of publication of the company's 2012 annual report were set out in that report, under the heading "Principal risks and uncertainties", on pages 51 to 58 of the report (a copy of which may be downloaded from the company's website at www.rea.co.uk). In summary, such risks and uncertainties comprised:

• the exposure of the group's agricultural operations to adverse climatic conditions, pests, diseases and potential damage from logistical disruptions;

• the financial dependence of the agricultural operations upon crude palm oil ("CPO") and crude palm kernel oil ("CPKO") prices and, as respects the planned level of the extension planting programme, the group's ability to make land available for planting and to finance expansion at the rate that the programme will require;

• risks associated with a breakdown in relations with the local communities;

• currency risks inherent in the fact that CPO, CPKO and coal are essentially dollar based commodities and that operational costs are incurred partly in other currencies;

• environmental and social risks arising from the need to develop in a sustainable manner while operating in a region that elsewhere includes substantial unspoilt rain forest; and

• regulatory, country and locality risks that arise from the fact that substantially all of the group's agricultural assets are located in the East Kalimantan province of Indonesia.

The directors consider that the principal risks and uncertainties for the second six months of 2013 continue to be those set out in the company's 2012 annual report as summarised above.

DIRECTORS' RESPONSIBILITIES

The directors are responsible for the preparation of this half yearly financial report.

The directors confirm that the accompanying condensed set of financial statements has been prepared in accordance with IAS 34 "Interim Financial Reporting" as adopted by the European Union and that:

• the "Chairman's statement" and "Risks and uncertainties" sections of this half yearly report include a fair review of the information required by rule 4.2.7 of the Disclosure and Transparency Rules of the Financial Conduct Authority, being an indication of important events that have occurred during the first six months of the financial year and their impact on the condensed set of financial statements, and a description of the principal risks and uncertainties for the remaining six months of the year; and

• note 15 in the notes to the consolidated financial statements includes a fair review of the information required by rule 4.2.8 of the Disclosure and Transparency Rules of the Financial Conduct Authority, being related party transactions that have taken place in the first six months of the current financial year and that have materially affected the financial position or performance of the group during that period, and any changes in the related party transactions described in the last annual report that could do so.

The current directors of the company are as listed on page 59 of the company's 2012 annual report.

Approved by the board on 27 August 2013

RICHARD M ROBINOW

Chairman

CONSOLIDATED INCOME STATEMENT FOR THE SIX MONTHS ENDED 30 JUNE 2013

CONSOLIDATED BALANCE SHEET AS AT 30 JUNE 2013

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

FOR THE SIX MONTHS ENDED 30 JUNE 2013

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

FOR THE SIX MONTHS ENDED 30 JUNE 2013

* See note 1

CONSOLIDATED CASH FLOW STATEMENT FOR THE SIX MONTHS

ENDED 30 JUNE 2013

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

1. Basis of accounting

The condensed consolidated financial statements for the six months ended 30 June 2013 comprise the unaudited financial statements for the six months ended 30 June 2013 and 30 June 2012, neither of which has been reviewed by the company's auditors, together with audited financial statements for the year ended 31 December 2012.

The information shown for the year ended 31 December 2012 does not constitute statutory accounts within the meaning of section 435 of the Companies Act 2006, and is an abridged version of the group's published financial statements for that year which have been filed with the Registrar of Companies. The auditors' report on those statements was unqualified and did not contain any statements under section 498(2) or (3) of the Companies Act 2006.

The condensed consolidated financial statements for the six months ended 30 June 2013 have been prepared in accordance with IAS 34, "Interim Financial Reporting" as adopted by the European Union, and should be read in conjunction with the annual financial statements for the year ended 31 December 2012 which were prepared in accordance with International Financial Reporting Standards (IFRS) as adopted by the European Union.

The accounting policies and methods of computation adopted in the preparation of the condensed consolidated financial statements for the six months ended 30 June 2013 are the same as those set out in the group's annual report for 2012.

On page 93 of the group's Annual Report 2012, it was reported that the group had corrected an accounting error in relation to its previous treatment of certain cross-currency interest rate swaps as cash flow hedges of the group's liability in respect of the 9.5 per cent guaranteed sterling notes 2015/17 issued by REA Finance B.V.. The consequential corrections which were booked in the financial statements for the year ended 31 December 2012 have been reflected as appropriate in the restated condensed financial statements for the half year ended 30 June 2012 as presented in this half yearly report.

The condensed consolidated financial statements for the six months ended 30 June 2013 were approved by the board of directors on 27 August 2013.

2. Revenue

3. Agricultural produce inventory movement

The net loss arising from changes in fair value of agricultural produce inventory represents the movement in the fair value of that inventory less the amount of the movement in such inventory at historic cost (which is included in cost of sales).

4. Segment information

In the year ended 31 December 2012, the group disclosed segment information for three reportable segments in accordance with IFRS 8 Operating Segments, two operating segments, being the cultivation of oil palms and the stone and coal operations, and a head office segment comprising the activities of the UK, European and Singaporean subsidiaries.

In the six months ended 30 June 2013 the relevant measures for the coal and stone operations fell below the quantitative thresholds set out in IFRS 8. Reflecting the directors' decision to discontinue the coal trading operations and to concentrate on developing the stone concession as a part of the group's agricultural activities, it is considered that the remaining coal concessions are no longer of continuing significance to the group for segment reporting purposes. Accordingly, no segment information is included in these financial statements.

5. Administrative expenses

6. Finance costs

7. Tax

The tax charge for the period of $346,000 (2012 restated: $7,090,000) is based on the reported results of the operations in each jurisdiction, using relevant rates of tax, adjusted for items which include non-taxable income/expense, Indonesian withholding taxes not utilisable in the UK and time expired tax losses brought forward. If the income mix in the second half of 2013 differs materially from that of the first half, it will result in a disproportionate movement in the effective rate of taxation for the full year.

8. (Loss)/earnings per share

9. Dividends

10. Biological assets

11. Capital expenditure on property, plant and equipment and capital commitments

In the period, there were additions to property, plant and equipment of $6.6 million (2012: $19.0 million).

Capital commitments contracted, but not provided for by the group, amounted to $4.0 million (31 December 2012: $19.3 million).

12. Issuance, repurchase and resale of securities

On 10 May 2013 the company placed 1,670,724 ordinary shares of 25p each at 425p per share. As a result the number of ordinary shares in issue was increased to 35,085,269.

During the period the group repurchased 3,500 of the redeemable participating preference shares of KCC Resources Limited for a consideration of $16,079.

13. Hedging instruments

Hedging instruments comprise the three outstanding contracts, cross currency interest rate swaps ("CCIRS"), as described in note 27 (page 111) of the Annual Report 2012. The fair value of the CCIRS has been derived by a discounted cash flow analysis using quoted foreign forward exchange rates and yield curves derived from quoted interest rates with maturities corresponding to the applicable cash flows. The valuation of the CCIRS at 30 June 2013 at fair value resulted in a loss of $4,254,000. The movement in the period has been dealt with through the consolidated income statement.

14. Reconciliation of operating profit to operating cash flows

15. Movement in net borrowings

16. Related parties

During the first six months of 2013 no new material related party transactions have been started and only those related party transactions which were disclosed in the company's 2012 annual report have continued.

17. Events after the reporting period

A final dividend of 3.5p per ordinary share in respect of the year ended 31 December 2012 was paid on 26 July 2013.

18. Rates of exchange

19.Shareholder information

The company's half yearly report for the six months ended 30 June 2013 will shortly be available for downloading from the company's web site at www.rea.co.uk

Press enquiries to:

R.E.A. Holdings plc

Tel: 020 7436 7877