Equatorial Palm Oil (LON:PAL) reported the results for 2010, which saw its successful listing on the AIM market and a US$60 million joint venture agreement with BioPalm.
The group said that now it has what it takes to reach its goal of achieving 50,000 hectares of plantations within 10 years.
"Through the initial capital raised on admission to AIM, supplemented by the US$60 million joint venture (with BioPalm), the foundations are in place for EPO to benefit from an acceleration and expansion of its strategic development plan in respect of its c.169,000 hectare land position at Palm Bay, Butaw and River Cess,” said executive chairman of Equatorial Palm Oil Michael Frayne.
Other highlights of the year included the construction and beginning of commissioning of a palm oil mill at Palm Bay. Equatorial Palm Oil made the first sales of crude palm oil from the mill in May 2011.
On the financial side, Equatorial Palm Oil ended the year with a strong cash position of US$6.8 million, compared to US$0.1 million in 2009, having repaid all outstanding loans. Losses rose from US$1.5 million to US$4.4 million with US$1.3 million attributable to costs associated with the listing in February 2010.
The AIM listing raised the company £6.5 million with another £5 million raised through a subscription agreement with BioPalm, a subsidiary of Indian conglomerate Siva Group.
During the year, the group reactivated over 3,000 hectares of existing oil palm plantations and established a 240,000 seedling nursery complex, which will plant out over 1,200 hectares of new oil palms in 2011.
The outlook for the global palm oil market offered by the company was positive, noting a strong increase in prices during the reporting period, from US$805 per tonne in January 2010 to US$1,200 per tonne in May 2011.
EPO said that the sourcing of crude palm oil from sustainable sources will be a key factor in the global palm oil market as many large scale end users of crude palm oil such as Unilever, Nestle, Tesco and McDonald's are turning to such sources.