Half year results of the SIPEF group per 30 June 2023

August 14, 2023

· A general cyclical decline in palm oil production, mainly in the second quarter, caused a temporary drop in production by 2.8% over the first semester of the year.

· Palm oil production in South Sumatra increased by 77.7% against the first semester of last year, and already represents close to a quarter of the SIPEF group’s palm oil production in Indonesia.

· The increase in banana production on the first semester of 2022 already reached 26.3%. Over the last two years, the banana plantations in Ivory Coast have been extended by 46.5%.

· Palm oil markets continued to remain favourable from a historical perspective and prices hovered around USD 1 000 per tonne for most of the second quarter.

· The 2023 half-yearly result of KUSD 31 216 (share of the Group) is satisfactory, but could not match the record figures of the first semester of 2022 (KUSD 63 922).

· The Group’s financial position has remained extremely healthy with a total equity of KUSD 848 811 and a positive net financial position of KUSD 4 391.

· The expansion in South Sumatra has continued steadily: already 17 402 hectares have been cultivated and the replanting of more than 10 000 hectares in Dendymarker plantations is completed. The construction of the second palm oil mill in that area will be finalised by mid-year 2024.

· The Group’s recurring annual results are expected to remain satisfying, in a range of USD 60 to 70 million. 69% of the budgeted palm oil production has been sold at an average ex-mill gate price of USD 878 per tonne and prospects are positive with modest increasing annual production volumes and sustained strong palm oil markets.

· The Group is expected to head for a limited net financial debt position at year end 2023, including tax payments on last year’s profits and the record dividend paid out. The generated cash flow will support the extensive annual investment program of more than USD 100 million.

· SIPEF achieved Roundtable on Sustainable Palm Oil (RSPO) certification for nearly 3 000 hectares (100%) of smallholder area at PT Dendymarker Indah Lestari.

· The Group’s headquarters in Belgium obtained banana supply chain certification in accordance with the GlobalG.A.P. Chain of Custody standard. It also successfully completed audits for supply chain certification under the Rainforest Alliance and Fairtrade standards.

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