Interim statement of the SIPEF group per 30 September 2020

October 22, 2020

  • So far, Covid-19 has had no significant direct negative financial impact on the operational activities of the SIPEF group, except for the effect of a sudden sharp drop in the price of palm oil in the second quarter.

  • The total palm oil production of the Group grew by 5.3% compared to the first nine months of last year; this growth should continue in the fourth quarter.

  • On the Indonesian estates a favourable precipitation pattern in the third quarter mitigated the expected  negative impact of the drought of mid-2019.

  • In Papua New Guinea, the recovery from volcanic eruptions is progressing favourably; a 48.4% increase in own fruit production was already recorded in the third  quarter compared to the catastrophic third quarter of 2019.

  • Demand for palm oil, both for food and biodiesel applications, remained strong in the third quarter with a price recovery to levels above USD 700 per tonne CIF Rotterdam as a result.

  • To date, the Group has sold 94% of the expected palm oil production for 2020 at an average price of USD 703 per tonne CIF Rotterdam equivalent, premiums included.

  • Based on these sales and recent market conditions, SIPEF expects a return to profit, with a recurring consolidated result after tax which is anticipated to be between USD 10 and 15 million at year end.

  • The investment programs related to the expansion in South Sumatra, Indonesia, continued steadily with an increase in Musi Rawas from 1 340 cultivated hectares to a total area of 13 543 hectares by the end of September 2020. In addition, 4 210 hectares have already been  replanted in the nearby Dendymarker plantation.

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