REG-New Britain Palm Oil NBPO Interim Results - Part 1

Released: 06/08/2009

com:20090806:RnsF9672W
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RNS Number : 9672W  
  
New Britain Palm Oil Limited  
  
06 August 2009  
  
6 August 2009  
  
NEW BRITAIN PALM OIL LIMITED  
  
("NBPOL" or the "Company")  
  
INTERIM RESULTS FOR THE SIX MONTHS ENDED 30 JUNE 2009 (UNAUDITED)  
  
New Britain Palm Oil Limited (LSE: NBPO), a large scale integrated industrial 
producer of palm oil in Australasia, today announces its unaudited interim 
results for the period ended 30 June 2009.  
  
Financial highlights  
  
 
 * Profit before tax excluding IAS 41 (biological assets) of USD 41.9 million 
(H12008: USD 68.1 million) 
 * Revenue of USD 161.5 million (H12008: USD 175.9 million) 
 * Profit before tax excluding IAS 41 (biological assets)and revenue, adjusted 
for the late shipment of palm oil after the period end, would have been USD 49.2 
million and USD 168.8 million respectively 
 * Basic EPS excluding IAS 41 of USD 21.2 cents per share (H12008: USD 35.3 
cents per share)  
 * Strong balance sheet with cash balance of USD 48.3 million at half year end, 
providing opportunities for further growth 
 * Cash inflow from operations of USD 45.8 million (H1 2008: USD 53.8 million)  
  
Operational highlights  
  
 
 * During the first half of 2009, a record total of 767,199 tonnes of fresh 
fruit bunches were processed up 15% (H1 2008: 667,008 tonnes) 
 * Total oils produced by the Company in the period was 190,187 tonnes - with 
174,566 tonnes of Crude Palm Oil and 15,621 tonnes of Palm Kernel Oil (H1 2008: 
154,143 tonnes and 13,939 tonnes respectively) 
 * CPO prices moved upwards from around $550/tonne at the start of 2009 to 
levels above $800 for a short time in April, and have since drifted back to 
current levels of approximately USD 700/tonne 
 * In the first six months the company has averaged sales of USD 730/tonne of 
CPO (H1 2008: USD 983/tonne) 
 * As at 30 June 2009, NBPOL had made sales and 'forward sales' of approximately 
254,800 tonnes of all oils at an average price of USD 752/tonne 
 * The Company's crude palm oil extraction rate for the period was 22.75% (FY 
2008: 23.1%) 
 * Commenced operations on our new plantation at Silovuti to the west of Kimbe  
 * The integrated palm oil processing facility in the UK is still on track to 
commence refining fully traceable and sustainable palm oil for the EUat the end 
of Q1 2010 with approximately half the works complete 
 * Good progress made in the construction of new methane capture ponds at two 
mill sitesthat will reduce reliance on mineral oil, reduce greenhouse gas 
emissions and produce excess electricity for sale to the grid  
  
Commenting on the results, Mr Nick Thompson, Chief Executive Officer, said:  
  
"New Britain Palm Oil enjoyed a good performance in the first half of 2009 but 
these results reflect lower world oil prices compared to the same period last 
year.  
  
World CPO prices have improved from the start of the year with good demand 
particularly from India. Whilst the price of palm oil products, like all 
commodities, is difficult to predict, stocks held in the global supply chain are 
still relatively low at one and a half months usage and we have made good sales 
into the second half and also into 2010.   
  
NBPOL's oils are fully traceable and sustainable and are well positioned to 
satisfy the market's requirement for these oils as well as speciality fats and 
oils that will also be traceable and sustainable once the Liverpool refinery 
commences operations early in 2010.  
  
The Company also maintains a strong balance sheet to support further investment 
in, and growth of, its operations. NBPOL continues to trade in line with the 
board's expectations and the board remains confident of delivering further 
growth and progress."   
  
Enquiries:  
  
 
  New Britain Palm Oil Limited                   Tel: +44(0)20 7074 1800                
  Nick Thompson                                                                         
  Alan Chaytor                                                                          
  David Dann                                                                            
                                                                                        
  Kreab Gavin Anderson (Financial PR Adviser)    Tel: +44(0)20 7074 1800                
  James Benjamin / Anthony Hughes                Email: nbpol@kreabgavinanderson.com    
                                                                                        
  
  
Website: www.nbpol.com.pg   
  
NEW BRITAIN PALM OIL LIMITED  
  
INTERIM RESULTS FOR THE SIX MONTHS ENDED 30 JUNE 2009 (UNAUDITED)  
  
New Britain Palm Oil enjoyed a good performance in the first half of 2009 with 
profit before tax of USD 41.9 million (excluding IAS 41 (biological assets)) 
compared to USD 68.1 million in the same period last year and USD 106.3 million 
for the 2008 full year. This result reflects lower oil prices compared to the 
same period last year. At the end of the period approximately 34,000 tonnes of 
crude and refined palm oil were on hand, equating to USD 7.3 million of 
additional profits which will be accounted for on shipment.   
  
CPO prices moved upwards from around $550/tonne at the start of 2009 to levels 
above $800 for a short time in April, and have since drifted back to current 
levels of approximately USD 700/tonne. Demand for CPO remains high as palm oil 
remains attractively priced versus other oils and palm oil stocks are still at 
relatively low levels compared to usage. During the first six months, the 
Company has averaged sales of USD 730/tonne of CPO compared to USD 983/tonne for 
the same period last year.   
  
Cropping levels have been in line with expectations and pleasingly crops are 
still high at the start of the second half of 2009. Oil production is still some 
13% higher than the same period in 2008 although oil extraction rates were a 
little dissapointing at 22.75% due largely to unusual rainfall patterns that 
affected harvesting rounds at various times.   
  
The Company's balance sheet remains strong with good cashflow from operations 
allied to funds in hand which are being used to finance expansionary activities. 
The downstream palm oil processing facility that is currently being built in the 
UK  is approximately half complete and on budget and on time. This facility will 
produce fully traceable and sustainable refined palm oil products for key 
customers in the EU at the end of Q1 2010. Key experienced staff members to 
operate the facility have already been employed. The Company as part of its 
commitment as a sustainable palm oil producer and under its obligations to the 
Roundtable on Sustainable Palm Oil (RSPO) is commencing work at its subsidiaries 
in the Solomon Islands and at Ramu Agri Industries Limited (RAIL) to have them 
also certified with full RSPO accreditation.  Full accreditation across all 
operations of the Company is a key component of our long term strategy.  
  
Excellent progress has been made integrating RAIL into NBPOL's operations since 
its acquisition in September 2008 including harmonisation of agricultural 
standards, working conditions as well as budgeting and reporting methods. Palm 
oil production at RAIL is increasing and irrigation options are currently being 
explored that ought to improve yields further. The sugar season at RAIL has been 
encouraging with cane production in line with expectations.    
  
Following the receipt of the necessary permits work has commenced on our new 
plantation at Silovuti with felling and levelling of a temporary campsite and 
once the site is levelled and drained the camp will be shipped by barge and set 
up. Demarcation of boundaries and clearing of road traces has also commenced. A 
total of 250 hectares is expected to be planted in 2009 out of a total available 
area of approximately 4,500 hectares with the balance to be planted in the next 
three to four years.  
  
On 25 July 2009, the main plantation office building in the Solomon Islands at 
Tetere was destroyed by fire. There was no loss of life or injury and the 
Company's plantation and milling operations were not affected. An investigation 
is currently in progress and rebuilding efforts are already successfully 
underway.    
  
Results  
  
Revenue declined by 8% over the comparative period to USD 161.5 million (H1 
2008: USD 175.9 million) as prices have reduced from the high levels experienced 
in the same period last year. Total oils shipped in the first six months is up 
6.2% with  167,221 tonnes compared to 157,311 tonnes shipped for the 
corresponding period last year.  
  
Gross margin was USD 82.4 million, a decline of 18% from USD 100.6 million for 
the same period last year.  
  
During the first half of 2009, a total of 767,199 tonnes of fresh fruit bunches 
were processed compared to 667,008 for the same period last year with fruit 
production up over 15% across New Britain and the Solomons Islands and with RAIL 
processing just over 18,000 tonnes of fresh fruit bunches compared to nothing at 
RAIL for the same period last year. Harvesting rounds are generally at 
acceptable levels and rainfall has been more than adequate in both Papua New 
Guinea and the Solomon Islands.  
  
Seed revenues were lower than expectations with USD 1.8 million compared to USD 
4.3 million for the first half of 2008 as a result of  low demand from Indonesia 
primarily caused by the global financial crisis that has restricted and 
continues to restrict oil palm expansion in that country. However stronger 
orders for later in the year are now coming in as the Indonesian buyers are 
returning to the market after nearly a year of almost no new plantings. Seed 
stocks are high enough to meet this demand.  
  
The cost of fruit from smallholders has reduced in line with the crude palm oil 
price. In the first half of 2009, we have paid USD 16.6 million compared to USD 
34.1 million for the same period last year. Land royalties paid to incorporated 
landowner groups with whom we have long-term leases were also lower than the 
same period last year, as they are also based on fruit prices. In the first half 
of 2009, a total of USD 1.5 million was paid in royalties which is a reduction 
of 44% from USD 2.7 million paid in the same period last year.  
  
Operating costs have generally been contained with some good savings on 
fertiliser being made compared to last year although some fertiliser costs 
remain at historically high prices.  Fuel prices have also had a pleasing impact 
on costs as they remained at reasonable levels. During the first half we saved  
USD 3.9 million on fuel for transport and power generation. Usage of fuel was 
lower by volume resulting from the operations of the centralised power plant. 
Good progress has also been made with the first two methane capture plants that 
once commissioned will further reduce reliance on diesel fuel for power 
generation as well as reducing our carbon footprint and producing electricity 
for sale to the grid.  
  
Distribution costs excluding RAIL are 5% lower than the corresponding period 
last year, reflecting lower freight costs. Administrative expenses rose 
significantly from USD 16.8 million in H1 2008 to USD 26.0 million in H1 2009 
due mainly to inclusion of RAIL administrative expenses in 2009 of USD 5.2 
million, although salaries were also higher with a higher bonus payment to 
senior staff in H1 2009.  
  
Operating profit including IAS 41 was USD 94.5 million compared to USD 74.4 
million for the comparative period reflecting the effect of IAS 41 gains in the 
year to date being USD 52.9 million compared to USD 8.2 million in H1 2008.  
  
Interest income on the Company's cash balances has been lower than H1 2008 as 
the group has utilised funds for expansion combined with lower interest rates. 
Interest expense has increased to $1.4 million compared to $0.5 million in the 
corresponding period last year due to the inclusion of RAIL's loans in the 
group's position this period.  
  
Tax expense for the period was USD 27.7 million compared to USD 20.4 million for 
the same period last year.  
  
Profit after tax for the period was USD 67.1 million including IAS 41 and USD 
30.1 million excluding IAS 41 compared to H1 2008 of USD 56.0 million including 
IAS 41 and USD 50.2 million excluding IAS 41. Profit after tax for the whole of 
2008 excluding IAS 41 was USD 76.4 million. At the end of June there were 34,041 
tonnes of oil in stock that had there been a ship in June to take the oil, would 
have added an additional profit of $7.3 million for the period.  
  
Earnings per share for the six months ended 30 June 2009 including the effects 
of IAS 41 improved from 37.4 cents in H1 2008 to US 46.1 cents for H1 2009. This 
reflects the higher IAS 41 effect at the end of June 2009. Earnings per share 
excluding IAS 41 were US 21.2 cents compared to US 35.3 cents for the same 
period last year reflecting the drop in CPO prices from the very high levels 
experienced in H1 2008.   
  
'Other comprehensive income' of USD (8,573) are movements that under accounting 
convention were previously included in statement of changes in equity under 
reserves, now however they are included in the Group Statement of Comprehensive 
Income but are not included in calculating EPS.    
  
Balance sheet  
  
The Company's balance sheet remains strong with cash reserves of $48.3 million 
and total borrowings of USD 56.4 million of which USD 40.3 million came with the 
addition of RAIL. NBPOL generates significant free cash flow which is being used 
mainly to fund expansion both in terms of processing capacity and new 
plantations.  
  
Trade and other receivables are lower at USD 58.2 million compared to USD 62.3 
for the first half of 2008. This reflects the lower value of sales and also the 
timing of shipments.  Trading terms, being tied to standard Federation of Oils, 
Seeds and Fats Associations Ltd ("FOSFA International") contracts, remain 
unchanged.  
  
Inventories increased by 70% to USD 54.0 million compared to USD 31.7 million at 
the end June 2008, reflecting mainly the high oil stocks as well as the addition 
of RAIL which has high spare parts inventories as well as sugar stocks together 
totalling USD 19.1 million.   
  
Derivative financial instruments showed significant reductions both in current 
and non current liabilities. The current liability amount of derivative 
financial instruments reduced from USD 16.2 million to USD 0.3 million while the 
non current liability reduced from USD 10.1 million to USD 0.2 million. These 
reductions are due to fact that there is little exposure on our hedge book 
compared to the same period last year.    
  
Cashflow and capital expenditure  
  
Net cash inflow from operating activities was USD 45.8 million compared to USD 
53.8 million for the same period last year Investing activities increased from 
USD 22.2 million for H1 2008 to USD 43.1 million this year as a result of 
increased capital expenditure including upgrading Mosa and Kumbango mills as 
well as building the downstream processing plant in the UK. The net cash 
movement after financing activities including payment of the May dividend of USD 
20.1 million was a reduction of USD 18.0 million compared to an increase to June 
2008 of USD 9.7 million as the company continues to expand. The Company ended 
the period with USD 40.0 million net cash in hand (H1 2008: USD 144.7 million) 
having started the year with net cash balances of USD 54.9 million.   
  
Outlook  
  
World CPO prices have improved from the start of the year with good demand 
particularly from India. Whilst the prices of palm oil products, like all 
commodities, is difficult to predict, stocks held in the global supply chain are 
still relatively low at one and a half months usage and we have made good sales 
into the second half and also into 2010. NBPOL is still well positioned to 
benefit from the continued strong demand for palm oil products, and in 
particular the increasing requirement for them to be fully traceable and 
sustainable.    
  
NBPOL continues to trade in line with the board's expectations and the board 
remains confident of delivering further growth and progress.  
  
 NEW BRITAIN PALM OIL LIMITED  
  
GROUP STATEMENT OF COMPREHENSIVE INCOME  
  
FOR THE SIX MONTHS TO 30 JUNE 2009  
  
 
                                                                        Unaudited                Unaudited                Audited           
                                                                        6 months to              6 months to              12 months to      
                                                              Notes     30 June 2009             30 June 2008             31 December 2008  
                                                                        USD'000                  USD'000                  USD'000           
                                                                                                                                            
  Revenue                                                     2         161,503                  175,907                  352,219           
  Cost of sales                                                         (79,106)                 (75,276)                 (165,817)         
                                                                                                                                            
  Gross profit                                                          82,397                   100,631                  186,402           
                                                                                                                                            
  Net gain/(loss) arising from changes in fair value of       4         52,905                   8,185                    (77,476)          
  biological assets                                                                                                                         
  Other income                                                2         5,565                    1,715                    1,399             
  Distribution costs                                                    (20,402)                 (19,384)                 (42,118)          
  Administrative expenses                                               (26,005)                 (16,795)                 (45,161)          
  Operating profit                                                      94,460                   74,352                   23,046            
  Interest income                                                       822                      1,861                    3,860             
  Finance costs                                                         (1,359)                  (537)                    (1,606)           
  Net finance costs                                                     (537)                    1,324                    2,254             
  Share of profit from joint venture                                    859                      658                      3,505             
                                                                                                                                            
  Profit before income tax                                              94,782                   76,334                   28,805            
  Income tax expense                                                    (27,679)                 (20,368)                 (6,605)           
  Profit for the period                                                 67,103                   55,966                   22,200            
                                                                                                                                            
  Other comprehensive income                                                                                                                
  Cash flow hedges                                                      (15,680)                 687                      42,256            
  Currency translation differences                                      2,403                    9,987                    13,103            
  Income tax relating to components of other comprehensive              4,704                    (206)                    (12,677)          
  income                                                                                                                                    
  Other comprehensive income for the period, net of tax                 (8,573)                  10,468                   42,682            
                                                                                                                                            
  Total comprehensive income for the period                             58,530                   66,434                   64,882            
                                                                                                                                            
  Profit for the period is attributable to:                                                                                                 
  Equity holders of the company                                         66,823                   54,204                   21,245            
  Minority interest                                                     280                      1,762                    955               
                                                                        67,103                   55,966                   22,200            
  Total comprehensive income for the period is attributable                                                                                 
  to:                                                                                                                                       
  Equity holders of the company                                         58,250                   64,672                   63,927            
  Minority interest                                                     280                      1,762                    955               
                                                                        58,530                   66,434                   64,882            
                                                                                                                                            
  Earnings per share for profit for the period attributable   9         $                        $                        $                 
  to the equity holders of the company:                                                                                                     
  - Basic                                                               0.461                    0.374                    0.147             
  - Diluted                                                             0.461                    0.374                    0.147             
                                                                                                                                            
  Earnings before net gain/(loss) arising from changes in fair value of biological assets are shown in Note 9.                              
  
  
NEW BRITAIN PALM OIL LIMITED  
  
GROUP STATEMENT OF FINANCIAL POSITION  
  
AS AT 30 JUNE 2009  
  
 
                                             Unaudited          Unaudited          Audited            
                                             As at 30 June      As at 30 June      As at 31 December  
                                             2009               2008               2008               
                                     Notes   USD'000            USD'000            USD'000            
                                                                                                      
  NON CURRENT ASSETS                                                                                  
  Property, plant and equipment      3       357,827            202,641            326,817            
  Biological assets                  4       117,391            144,002            67,732             
  Investment in joint venture                5,753              4,765              4,779              
                                             480,971            351,408            399,328            
                                                                                                      
  CURRENT ASSETS                                                                                      
  Cash and cash equivalents          5       48,283             147,745            64,582             
  Trade and other receivables                58,175             62,274             62,512             
  Derivative financial instruments   7       -                  -                  15,905             
  Biological assets                  4       17,213             146                10,306             
  Inventories                                53,966             31,720             51,280             
                                             177,637            241,885            204,585            
                                                                                                      
  TOTAL ASSETS                               658,608            593,293            603,913            
                                                                                                      
  NON CURRENT LIABILITIES                                                                             
  Borrowings                         6       45,745             14,528             45,322             
  Derivative financial instruments   7       166                10,093             -                  
  Deferred income tax liabilities            92,917             73,959             86,084             
                                             138,828            98,580             131,406            
                                                                                                      
  CURRENT LIABILITIES                                                                                 
  Borrowings                         6       10,728             3,601              13,105             
  Trade and other payables                   30,053             10,832             29,548             
  Derivative financial instruments   7       307                16,226             -                  
  Current income tax liabilities             44,946             29,666             34,491             
  Dividends payable                          -                  17,612             -                  
                                             86,034             77,937             77,144             
  TOTAL LIABILITIES                          224,862            176,517            208,550            
                                                                                                      
  NET ASSETS                                 433,746            416,776            395,363            
                                                                                                      
  SHAREHOLDERS' EQUITY                                                                                
  Issued capital                             124,879            124,879            124,879            
  Other reserves                             44,688             21,047             53,261             
  Retained earnings                          259,729            265,873            213,053            
                                                                                                      
                                             429,296            411,799            391,193            
  Minority interest in equity                4,450              4,977              4,170              
                                                                                                      
  TOTAL EQUITY                               433,746            416,776            395,363            
  
  
NEW BRITAIN PALM OIL LIMITED  
  
GROUP STATEMENT OF CHANGES IN EQUITY  
  
FOR THE SIX MONTHS TO 30 JUNE 2009  
  
 
                                                      Attributable to equity holders of the Company                                                    
                                                      Issued             Other               Retained                          Minority      Total     
                                                      Capital            Reserves            Earnings            Total         Interest      Equity    
                                              Notes   USD'000            USD'000             USD'000             USD'000       USD'000       USD'000   
                                                                                                                                                       
  Balance at 1 January 2008                           124,879            10,579              231,801             367,259       3,215         370,474   
                                                                                                                                                       
  Total comprehensive income for the period           -                  10,468              54,204              64,672        1,762         66,434    
                                                                                                                                                       
  Dividends declared                                  -                  -                   (20,132)            (20,132)      -             (20,132)  
                                                      -                  -                   (20,132)            (20,132)      -             (20,132)  
                                                                                                                                                       
  Balance at 30 June 2008                             124,879            21,047              265,873             411,799       4,977         416,776   
                                                                                                                                                       
  Total comprehensive income for the period           -                  32,214              (32,959)            (745)         (807)         (1,552)   
                                                                                                                                                       
  Dividends declared                                  -                  -                   (19,861)            (19,861)      -             (19,861)  
                                                      -                  -                   (19,861)            (19,861)      -             (19,861)  
                                                                                                                                                       
  Balance at 31 December 2008                         124,879            53,261              213,053             391,193       4,170         395,363   
                                                                                                                                                       
  Total comprehensive income for the period           -                  (8,573)             66,823              58,250        280           58,530    
                                                                                                                                                       
  Dividends declared                                  -                  -                   (20,147)            (20,147)      -             (20,147)  
                                                      -                  -                   (20,147)            (20,147)      -             (20,147)  
                                                                                                                                                       
  Balance at 30 June 2009                             124,879            44,688              259,729             429,296       4,450         433,746   
                                                                                                                                                       
  
  
NEW BRITAIN PALM OIL LIMITED  
  
GROUP STATEMENT OF CASH FLOWS  
  
FOR THE SIX MONTHS TO 30 JUNE 2009  
  
 
                                                                          Unaudited         Unaudited         Audited           
                                                                          6 months to       6 months to       12 months to      
                                                                          30 June 2009      30 June 2008      31 December 2008  
                                                                  Notes   USD'000           USD'000           USD'000           
                                                                                                                                
  CASH FLOW FROM OPERATING ACTIVITIES                                                                                           
  Cash receipts from customers                                            165,840           171,340           351,180           
  Cash payments to suppliers and employees                                (112,675)         (118,854)         (222,113)         
                                                                          53,165            52,486            129,067           
                                                                                                                                
  Income tax paid                                                         (6,838)           -                 (4,688)           
  Interest paid                                                           (1,359)           (537)             (1,606)           
  Interest received                                                       822               1,861             3,860             
                                                                                                                                
  Net cash generated from operating activities                            45,790            53,810            126,633           
                                                                                                                                
  CASH FLOW FROM INVESTING ACTIVITIES                                                                                           
  Purchase of investments                                                 -                 (361)             -                 
  Acquisition of subsidiary, net of cash acquired                         -                 -                 (63,391)          
  Purchase of property, plant and equipment                               (34,211)          (18,791)          (52,169)          
  Expenditure on plantation development                                   (8,528)           (2,684)           (13,456)          
  Expenditure on biological assets                                        (334)             (402)             (697)             
                                                                                                                                
  Net cash used in investing activities                                   (43,073)          (22,238)          (129,713)         
                                                                                                                                
  CASH FLOW FROM FINANCING ACTIVITIES                                                                                           
  Proceeds from borrowings                                                466               -                 1,318             
  Repayment of borrowings                                                 (1,032)           (511)             (3,892)           
  Dividends paid to company shareholders                                  (20,147)          (21,361)          (61,472)          
  Net cash (used in)/generated from financing activities                  (20,713)          (21,872)          (64,046)          
                                                                                                                                
  NET INCREASE/(DECREASE) IN CASH AND CASH EQUIVALENTS AND BANK           (17,996)          9,700             (67,126)          
  OVERDRAFTS                                                                                                                    
  Effects of exchange rate changes on cash and cash equivalents           3,093             3,676             (9,292)           
  and bank overdrafts                                                                                                           
  Add : Cash and cash equivalents and bank overdrafts at the              54,863            131,281           131,281           
  beginning of the period                                                                                                       
                                                                                                                                
  CASH AND CASH EQUIVALENTS AND BANK OVERDRAFTS AT THE END OF     5       39,960            144,657           54,863            
  THE PERIOD                                                                                                                    
  
  
RECONCILIATION OF PROFIT AFTER INCOME TAX TO NET CASH  
  
GENERATED FROM OPERATING ACTIVITIES  
  
 
                                                                Unaudited         Unaudited         Audited           
                                                                6 months to       6 months to       12 months to      
                                                                30 June 2009      30 June 2008      31 December 2008  
                                                                USD'000           USD'000           USD'000           
                                                                                                                      
  Profit after income tax                                       67,103            55,966            22,200            
                                                                                                                      
  Add/(less) non-cash items:                                                                                          
  Depreciation and amortisation                                 11,334            8,973             20,143            
  Biological (gain)/loss                                        (52,905)          (8,185)           77,476            
  Net exchange differences                                      3,093             (3,676)           9,292             
  Exchange differences on translation of financial statements   2,084             1,776             1,354             
  Share of profit from joint venture                            (859)             (658)             (3,505)           
  Deferred income tax                                           2,129             1,926             (22,485)          
  Loss on disposal of non current assets                        -                 -                 -                 
                                                                                                                      
  Add/(less) movements in working capital items:                                                                      
  (Increase)/decrease in trade and other receivables            4,337             (6,307)           43                
  Increase/(decrease) in current income tax liabilities         10,455            17,927            22,753            
  Increase/(decrease) in trade and other payables               1,405             (388)             1,319             
  (Increase)/decrease in inventories                            (2,386)           (13,544)          (1,957)           
                                                                                                                      
  Net cash generated from operating activities                  45,790            53,810            126,633           
                                                                                                                      
  
  
NEW BRITAIN PALM OIL LIMITED  
  
NOTES TO THE INTERIM FINANCIAL INFORMATION  
  
FOR THE SIX MONTHS TO 30 JUNE 2009  
  
1. STATEMENT OF ACCOUNTING POLICIES  
  
New Britain Palm Oil Limited was incorporated on 19 May 1967, as a limited 
liability company in Papua New Guinea. New Britain Palm Oil Limited and its 
subsidiaries ("the Group") operate in the oil palm industry in Papua New Guinea, 
the Solomon Islands, Indonesia, Singapore and Australia.  
  
The address of New Britain Palm Oil Limited's registered office is Bebere 
Plantation, Mosa, Kimbe, West New Britain Province, Papua New Guinea.  
  
New Britain Palm Oil Limited is listed on the Port Moresby Stock Exchange and 
the London Stock Exchange.  
  
This consolidated interim financial information does not comprise statutory 
accounts within the meaning of section 240 of the Companies Act 1985. Statutory 
accounts for the year ended 31 December 2008 were approved by the Board of 
Directors on 20 March 2009 and delivered to the Registrar of Companies. The 
report of the auditors on those accounts was unqualified, did not contain an 
emphasis of matter paragraph and did not contain any statement under section 237 
of the Companies Act 1985.  
  
This consolidated interim financial information for the six months ended 30 June 
2009 has been prepared in accordance with the Disclosure and Transparency Rules 
of the Financial Services Authority and with IAS 34, Interim Financial 
Reporting, and is unaudited. The consolidated interim financial information 
should be read in conjunction with the annual financial statements for the year 
ended 31 December 2008, which have been prepared in accordance with IFRS.  
  
(a) Accounting policies  
  
Except as described below, the accounting policies applied in these consolidated 
interim financial information are consistent with those of the annual financial 
statements for year ended 31 December 2008, as described in those annual 
financial statements.  
  
The following new standards, amendments to standards or interpretations are 
mandatory for the first time for the financial year beginning 1 January 2009, 
and have been adopted by the Group:  
  
IAS 1 (Revised), Presentation of financial statements  
  
IAS 41 (Amendment), Agriculture  
  
IFRS 3 (Revised), Business combinations  
  
IAS 36 (Amendment), Impairment  
  
IAS 39 (Amendment), Financial instruments; Recognition and measurement  
  
IFRS 8, Operating segments  
  
(b)Foreign currency translation  
  
(i) Functional and presentation currency  
  
Items included in these consolidated interim financial information are measured 
using the currency of the primary economic environment in which the entity 
operates ('the functional currency'). The consolidated interim financial 
information is presented in US Dollars, which is New Britain Palm Oil Limited's 
presentation currency and differs from its functional currency, the Papua New 
Guinea Kina ("PNG Kina").  
  
The balance sheets and statements of changes in equity are translated from PNG 
Kina to US Dollars at the closing rate existing at the date of the balance 
sheet, which at 30 June 2009 is PGK1.00 = USD 0.3780 (31 December 2008: PGK 1.00 
= USD 0.3760).  
  
The income statements and statements of cash flows are translated from PNG Kina 
to US Dollars at the average exchange rates prevailing during the period, which 
are considered to approximate the actual exchange rate at the date of each 
transaction. The average exchange rate at 30 June 2009 is PGK1.00 = USD 0.358 
(31 December 2008: PGK 1.00 = USD 0.3766).  
  
2. REVENUE AND OTHER INCOME  
  
 
                                       Unaudited         Unaudited         Audited           
                                       6 months to       6 months to       12 months to      
                                       30 June 2009      30 June 2008      31 December 2008  
                                       USD'000           USD'000           USD'000           
  Revenue                                                                                    
  Sales revenue                        150,861           194,274           379,165           
  Realisation of hedging instruments   10,642            (18,367)          (26,946)          
                                       161,503           175,907           352,219           
                                                                                             
  Other income                                                                               
  Foreign exchange gain                4,063             1,437             -                 
  Other income                         1,502             278               1,399             
                                       5,565             1,715             1,399             
                                                                                             
  
  
 
3. PROPERTY, PLANT AND EQUIPMENT  
  
 
                              Plantation       Land and       Plant and      Capital       Total       
  
  
More to follow, for following part double-click [nRn2F9672W]