Hardman & Co Research: Weak commodity prices dampen road to recovery

REA's 1H'19 results showed a small, 3.1%, increase in own-crop production levels to 335,177mt and a 7.7% increase in CPO production to 96,514mt. Revenue for the period was up 17.5%, to $56.6m (1H'18: $48.2m), despite a plunge of more than 20% in the CIF palm oil price compared with 1H'18. The revenue increase was due partly to the sale of excess inventory carried forward from the end of 2018. REA continues to focus on improving its oil extraction efficiency, with an average OER of 22.9% in 1H'19; however, higher OERs are being achieved in some of the mills in recent months.

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