New Britain Palm Oil Limited

Trading update

New Britain Palm Oil Limited ('NBPOL' or the 'Company') provides a trading update ahead of reporting its final results for the year ended 31 December 2008 on 27 February 2008.

The Company expects to report revenues for the year of approximately $331 million, marginally ahead of market expectations, and adjusted profit before tax (before foreign exchange losses, the Ramu acquisition and IAS 41 Agriculture) in the range of market expectations, delivering very strong growth in profits on an equivalent basis.  This trading result has been achieved despite the significant weakening of CPO prices during the second half of the year and higher input costs, most notably for fuel and fertiliser.  

Large movements in foreign exchange rates over the year ended 31 December 2008 will however impact the reported results for the Company with a foreign exchange loss in excess of $15 million having been incurred over the period.  A large portion of this relates to a £18 million cash deposit the Company made in August 2008 for the funding of the UK refinery project. The subsequent weakening of £ Sterling has resulted in a significant, albeit unrealised, foreign exchange loss. The Company also converted the balance of its US Dollar cash resources into PNG Kina during the year, partly to cover the Ramu acquisition, and the PNG Kina strength against the US Dollar resulted in a foreign exchange loss.  This is a non-recurring, non-operational effect. 

The Company has made a good start to the current financial year with approximately 130,000 tonnes of CPO sold or hedged, as at today's date, at an average price of approximately $725/tonne compared to spot prices of approximately $540/tonne (CIF Rotterdam).  Demand for palm oil from NBPOL's customers, who serve or operate exclusively in the food manufacturing industry, remains strong.  NBPOL continues to invest in its plantations and operations, with both the integration of Ramu and the development of the UK refinery on target, which the board of NBPOL believes provides a solid underpinning for continued growth into the future.

The Company will provide a fuller update on current trading with the announcement of its final results.

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