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13 May 2009

New Britain Palm Oil Limited 

1st QUARTER REPORT AND TRADING UPDATE

As a result of the Bursa Malaysia quarterly reporting requirements of its major shareholder, Kulim Malaysia Berhad, NBPOL is required to provide the following information in respect of the three months ended 31 March 2009:

	3 months ended  31 March 2009	3 months ended  31 March 2008
Sales (USD (m))	73.8	82.7
PBT (excluding IAS 41) (USD (m))	27.6	36.7
FFB Produced - own plantations (Mt)	266,610	218,080
FFB Processed (Mt)	383,078	325,071
CPO Produced (Mt)	87,690	73,648
PKO Produced (Mt)	7,755	7,116
Average CPO price per Mt achieved (USD)	747	954

(Note: USD exchange rates as at 31 March 2009 and 31 March 2008 respectively)

Nick Thompson, Chief Executive, stated:

'In the first quarter of 2009 the Company produced a record 95,445 tonnes of crude palm and kernel oil, 22% ahead of the same period last year. The cropping outlook for the next quarter appears to be equally as robust as production in New Britain and the Solomon Islands will be at its peak over the next two months. The peak crops at Ramu will be later in the year. The weather has been seasonally wet but within normal parameters.

Oil extraction rates at the mills have not been helped by the seasonally high rainfall and the longer than ideal harvesting intervals, but despite this, rates have actually held up remarkably well and indeed are marginally ahead of this period last year. The Company's crude palm oil extraction rate for the first quarter of 2009 was 22.89% compared to 22.65% for the corresponding period in 2008.  At the end of the quarter, our stocks of both crude and refined oils in storage awaiting shipment were in excess of 29,789 tonnes.

Palm oil prices have increased some 50% during the quarter. We believe prices are reflecting the fine balance of supply and demand for edible oils and fats as witnessed by the recent rapid draw down of world palm oil stocks. Taking into account our forward sales, NBPOL has averaged US$747 per tonne for crude palm oil in the first quarter. As at the end of March, the Company has approximately 122,000 tonnes of oil sold or priced forward for 2009 at an average price of approximately US$700 per tonne.

We are also pleased to note that the Company's significant input costs of fertiliser, fuel and chemicals were lower in the first quarter of 2009 compared to the corresponding period in the previous year and it is expected that this saving on costs will continue as demand worldwide for these inputs remains lower than normal. 

The Company's balance sheet remains strong, substantially ungeared and with cash reserves, less bank overdrafts, of US$54.6 million at the end of the quarter. NBPOL generates significant free cash flow which is being used mainly to fund expansion.

Works to increase the milling capacity of existing oil mills and to build new mills are continuing, and expansion of storage capacity at our export terminal at Kimbe, New Britain is nearing completion.  The earthworks for our next new mill in New Britain have commenced with civil works expected to commence in Q3 2009 for completion in the second half of 2010. This new mill will increase our processing capacity by 60 tonnes of oil palm fruit bunches per hour and increase the Company's processing capacity to 380 tonnes of oil palm fruit per hour. Building works at our refinery in Liverpool are presently on schedule for production to commence at the end of Q1 2010.

Oil palm seed sales revenue fell dramatically in the first quarter due to the global impact of the credit crunch on our customers' planting programs. With the recent rise in palm oil prices, we expect demand for seed to rekindle in the second half of 2009 although we remain cautious on how rapid the recovery will be due to on-going credit supply constraints. However, the potential positive aspect of the slow down in oil palm planting will introduce future palm oil supply constraints that we believe will support the palm oil price in future. 

Turning to consider the acquisition of Ramu Agri-Industries Limited ('Ramu') which was completed in October 2008, we are very pleased with the progress made in integrating the business with that of NBPOL.  In particular the NBPOL management systems have now been put in place at Ramu alongside the appointment of a new General Manager, bringing the Ramu operations into line with those within NBPOL.  We continue to work on areas of additional synergies within the enlarged Company and overall consider that Ramu will represent an excellent addition to the business of NBPOL.

The Company is also pleased to reaffirm the continuing status of NBPOL as a certified supplier of sustainable palm oil from our entire production base in West New Britain Province under the Roundtable on Sustainable Palm Oil (RSPO) guidelines. 

NBPOL continues to trade in line with the board's expectations and the board remains confident of reporting further progress and growth in the year ahead.'

Enquiries:

Kreab Gavin Anderson  James Benjamin  Anthony Hughes  Ken Cronin	Tel: +44(0)20 7554 1400  Email: nbpol@kreabgavinanderson.com
New Britain Palm Oil Limited Nick Thompson Alan Chaytor David Dann	Tel: +44(0)20 7554 1400
Akur Partners Andrew Dawber Tom Frost Anthony Richardson	Tel: +44 (0)20 7955 1513
Liberum Capital Simon Stilwell Simon Atkinson	Tel: +44(0)20 3100 2000

Website: www.nbpol.com.pg 

Notes to editors:

NBPOL is a large scale integrated industrial producer of sustainable palm oil in Australasia and is headquartered in Papua New Guinea ('PNG'). It has over 44,500 hectares of planted palm oil plantations and long term leases over 30,000 hectares of additional land, some of which will be converted to palm oil, six oil mills, a refinery and a seed production and plant breeding facility. The Company is quoted on both the Main Market of the London Stock Exchange and on the Port Moresby Stock Exchange in PNG.

NBPOL is fully vertically integrated, producing its own seed (which it also sells globally) and planting, cultivating and harvesting its own land and processing and refining palm oil. It also contracts directly with its end customers in the EU and arranges shipping of its products. 

NBPOL has high regard for the importance of its sustainability credentials and is active in proving its performance through its certification to ISO 14001 and its close involvement and support of the Roundtable on Sustainable Palm Oil ('RSPO'). In September 2008, NBPOL announced that its operations in Papua New Guinea were officially certified by the RSPO as conforming to RSPO Principles and Criteria on sustainability.

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