27 February 2015
NEW BRITAIN PALM OIL LIMITED
("NBPOL", the "Group" or the "Company")
PRELIMINARY RESULTS FOR THE YEAR ENDED 31 DECEMBER 2014 (UNAUDITED)
New Britain Palm Oil Limited (LSE: NBPO; POMSoX: NBO), one of the world's largest fully integrated producers of sustainable palm oil, today announces its unaudited preliminary results for the year ended 31 December 2014.
Financial Results
· Revenue increased 10.6% to USD 617.9 million (2013: USD 558.7 million) reflecting an increase in total oils shipped to customers and higher prices
· Profit before tax increased 574.6% to USD 116.7 million* (2013: USD 17.3 million*) excluding the changes in fair value of biological assets under IAS 41 but including the net gains of USD 2.8 million on agricultural products transferred to inventories at balance date. Including the changes in fair value of biological assets under IAS 41, the statutory profit before tax as reported in the statement of comprehensive income is USD 105.1 million (2013: USD 71.0 million)
· Net foreign exchange losses of USD 10.1 million (as compared to losses of USD 17.5 million in 2013) including non-cash unrealised exchange losses on restatement of USD borrowings of USD 13.6 million (2013: USD 23.2 million)
· A non-cash gain of USD 8.4 million was recognised during the year as a result of the acquisition of 95% of the issued share capital of PT Timbang Deli Indonesia
· Earnings Per Share attributable to ordinary shareholders increased 570.3% to USD 49.6 cents* (2013: USD 7.4 cents*)
· Earnings Before Interest, Tax and Depreciation ("EBITDA") increased 97.4% to USD 191.1 million* (2013: USD 96.8 million*)
· Gross margin of 40.9% (2013: 34.4%) reflecting the impact of higher selling prices and continued depreciation in the Papua New Guinea Kina against the US Dollar
· Average selling price achieved for crude palm oil ("CPO") during the year was USD 889/tonne (2013: USD 868/tonne)
· Average selling price achieved for palm kernel oil ("PKO") during the year was USD 1,276/tonne (2013: USD 965/tonne)
· As at the year end, the Group had made forward sales of CPO of approximately 70,000 tonnes of its 2014 production at an average price of USD 750/tonne; as at 25 February 2015 the forward sales of CPO of the Group were approximately 129,000 tonnes at an average price of USD 722/tonne
· Net cash generated from operating activities of USD 106.0 million (2013: USD 142.6 million) reflecting an increase in working capital items of USD 60.7 million including an increase in trade and other receivables of USD 65.8 million (2013: a decrease of USD 46.2 million including a decrease in trade and other receivables of USD 33. 4 million)
· Capital expenditure decreased 5.8% to USD 66.6 million (2013: USD 70.7 million)
· The Group had cash holdings at the end of 2014 of USD 17.0 million and short term borrowings of USD 15.3 million equating to a net cash position of USD 1.7 million (2013: net cash position of USD 8.7 million)
· The Group's total borrowings at the end of 2014 decreased 9.1% to USD 247.8 million (2013: USD 272.6 million)
· A final dividend for 2013 of USD 5 cents per share was paid in April 2014 and an interim dividend for 2014 of USD 15 cents per share was paid in November 2014
* IAS 41 is an accounting standard that requires the company to value the oil palm trees over their entire future lifetime of 20 plus years. The fair value movements year-on-year under IAS 41 are non-cash items and therefore are not used by management when measuring the company's operational performance because they are not reflective of the underlying business. Management believes that the inclusion of these adjusted profitability measures (excluding IAS 41 fair value changes) are useful to investors because they provide a means of evaluating the Group's operating performance and results from period to period on a comparable basis not otherwise apparent when the impact of the changes in fair value of biological assets under IAS 41 is included. Management also believes that this inclusion is useful in facilitating comparisons between the Group and other companies in the industry, some of whom are not required to comply with IAS 41. Refer to notes 3 and 4 for a reconciliation of the adjusted measures to those including the impact of IAS 41
Operational Results
· During the year, a total of 2,331,756 tonnes of fresh fruit bunches ("FFB") were processed (2013: 2,085,670 tonnes), including 641,559 tonnes from smallholders (2013: 589,524 tonnes)
· The Group's CPO extraction rate for the year was 22.35% (2013: 22.15%)
· The Group's palm product extraction rate for the year was 27.87% (2013: 27.50%)
· Total oil production was 574,124,856 tonnes (2013: 507,856 tonnes), with 521,204 tonnes of CPO produced and 52,920 tonnes of PKO produced (2013: 462,060 tonnes and 45,796 tonnes respectively)
· Oil shipments (CPO, PKO and refined oils, excluding sales from the Liverpool refinery) were 565,769 tonnes (2013: 517,731 tonnes)
· In 2014, the Group completed 1,183hectares of new plantings (with a further 1,479 hectares under preparation) and 2,743 hectares of replanting
· CPO prices traded during the year between USD 675 and USD 935/tonne, starting the year at USD 785/tonne, increasing to USD 935/tonne during the year and ending at around USD 700/tonne with current prices trading at approximately USD 700/tonne
· Ramu Agri Industries Limited harvested 314,623 tonnes of sugar cane (2013: 320,467 tonnes), yielding 31,122 tonnes of sugar (2013: 30,208 tonnes)
· Seed sales of 4.3 million seeds (2013: 6.9 million seeds)
· The Liverpool refinery recorded strong EBITDA growth of 19.1% year-on-year driven by gross margin expansion and increased sales volumes
Corporate Actions and Other Events
· On 9 October 2014, the Company received formal notification from Sime Darby Plantation Sdn Bhd ("Sime Darby Plantation") of its intention to make a cash offer for all the issued and to be issued shares in NBPOL at a price of GBP 7.15 or PGK 28.79 per share (the "Offer")
· On 23 October 2014, the Offer Document and the Target Company Statement were dispatched to shareholders together with an assessment of the merits of the Offer by the Independent Directors of NBPOL. Following this assessment, the Independent Directors unanimously recommended, in the absence of a superior proposal, that NBPOL shareholders accept the offer
· On 18 February 2015, Sime Darby Plantation declared the Offer to be free from all of the conditions specified in Section 12.1 of the Offer Document dated 23 October 2014 (as amended) and the Offer became unconditional
· On 25 February 2015 and following the closing of the Offer, for which total acceptances representing approximately 98.8% of NBPOL's voting shares have been received by Sime Darby Plantation, NBPOL announced its intention to apply to the UK Listing Authority and the London Stock Exchange requesting the cancellation of trading in NBPOL ordinary shares (in the form of depositary interests) on the London Stock Exchange's market for listed securities and of the listing of the shares on the Official List of the UK Listing Authority. Pursuant to Listing Rule 5.2.11, the cancellation notice period has now commenced and cancellation is expected to take effect from 8:00 am (London time) on 25 March 2015
· On 11 December 2014, a settlement was reached with Pacific Rim Plantation Services Pte Limited, a company majority owned and controlled by Alan Chaytor, and with Alan Chaytor himself. Mr Chaytor resigned from his directorship and employment with NBPOL effective 11 December 2014. The full and final settlement relates to historic rates which had been charged to NBPOL.Subsequent to year end, the Company brought in-house the management of its post-production commercial activities including all shipping, sales, marketing and hedging operations as well as downstream refinery management
· On 19 February 2015, the Company issued 1,500,838 new ordinary shares pursuant to the terms of its Long-Term Incentive Plan ("LTIP") to LTIP Participants in accordance with the LTIP Rules. Following the issue of the new ordinary shares, the Company's share capital consists of a total of 151,548,942 ordinary shares
Antonio Monteiro de Castro, Chairman of New Britain Palm Oil Limited, commented:
"As these preliminary results are expected to be our final set of financial results presented to the London market, I would like to take this opportunity to thank our shareholders for their support over the years, and also our employees for their continued commitment to the business."
Enquiries:
New Britain Palm Oil Limited Nick Thompson (Chief Executive Officer) Amir Mohareb (Chief Financial Officer) Ben Oakley (Corporate Development and IR) |
Tel (Singapore): +65 6227 6247
|
Newgate (PR Adviser) James Benjamin Clotilde Gros Georgia Lewis
|
Tel: +44 (0)20 7680 6550 Email: nbpol@newgatecomms.com |
Website: www.nbpol.com.pg
Notes to editors:
NBPOL is a large scale integrated industrial producer of sustainable palm oil in Australasia, headquartered in Papua New Guinea ('PNG'). It has over 81,500 hectares of planted oil palm estates, over 7,500 hectares of sugar cane and a further 9,150 hectares of grazing pasture; twelve oil mills; two refineries, one in PNG and one in Liverpool, UK; and a seed production and plant breeding facility. The Company is listed 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), planting, cultivating and harvesting its own land, and processing and refining palm oil (both in PNG and the UK). 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. It has achieved 100% certification of all estates, mills and smallholders to the Roundtable on Sustainable Palm Oil ('RSPO') standard. NBPOL continues to be active in proving its performance through certification to ISO 14001 and its close involvement with other innovative initiatives. The Company is a certified supplier of sustainable palm oil from its entire production base in PNG and Solomon Islands, under the RSPO guidelines.
Disclaimer:
This document includes statements that are forward-looking in nature. Forward-looking statements involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of New Britain Palm Oil Limited to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. Any such forward-looking statements speak only as of the date of this document and New Britain Palm Oil Limited does not undertake to update forward-looking statements to reflect events or circumstances after that date. Information contained in this document relating to the Group should not be relied upon as an indicator of future performance.
NEW BRITAIN PALM OIL LIMITED
Consolidated Statement of Comprehensive Income (Unaudited)
For the year ended 31 December
|
|
|
||
|
|
2014 |
|
2013 |
|
|
USD'000 |
|
USD'000 |
|
|
|
|
|
|
|
|
|
|
Revenue |
|
617,879 |
|
558,652 |
Cost of sales |
|
(365,131) |
|
(366,610) |
|
|
|
|
|
Gross profit |
|
252,748 |
|
192,042 |
|
|
|
|
|
Net (loss)/gain arising from changes in fair value of biological assets |
|
(11,567) |
|
53,678 |
Other income |
|
39,603 |
|
2,342 |
Other gains/(losses) |
|
1,017 |
|
(9,368) |
Distribution costs |
|
(72,814) |
|
(71,767) |
Administrative expenses |
|
(95,712) |
|
(86,344) |
Operating profit |
|
113,275 |
|
80,583 |
|
|
|
|
|
Interest income |
|
16 |
|
13 |
Finance costs |
|
(8,176) |
|
(9,614) |
Net finance costs |
|
(8,160) |
|
(9,601) |
|
|
|
|
|
PROFIT BEFORE INCOME TAX |
|
105,115 |
|
70,982 |
|
|
|
|
|
Income tax expense |
|
(36,492) |
|
(20,922) |
|
|
|
|
|
PROFIT FOR THE YEAR |
|
68,623 |
|
50,060 |
|
|
|
|
|
Other comprehensive income/(loss) Items that will subsequently be reclassified to profit and loss: |
|
|
|
|
Cash flow hedges |
|
(4,097) |
|
440 |
Currency translation differences |
|
(22,327) |
|
(148,929) |
Income tax relating to components of other comprehensive income |
|
1,229 |
|
(132) |
|
|
|
|
|
Other comprehensive income/(loss) for the year, net of tax |
|
(25,195) |
|
(148,621) |
|
|
|
|
|
TOTAL COMPREHENSIVE INCOME/(LOSS) FOR THE YEAR |
|
43,428 |
|
(98,561) |
|
|
|
|
|
Profit for the year is attributable to: |
|
|
|
|
Equity holders of the Company |
|
66,120 |
|
47,653 |
Non-controlling interest |
|
2,503 |
|
2,407 |
|
|
|
|
|
|
|
68,623 |
|
50,060 |
|
|
|
|
|
Total comprehensive income/(loss) for the year is attributable to: |
|
|
|
|
Equity holders of the Company |
|
40,724 |
|
(104,429) |
Non-controlling interest |
|
2,704 |
|
5,868 |
|
|
|
|
|
|
|
43,428 |
|
(98,561) |
|
|
|
|
|
|
|
|
|
|
Earnings per share |
|
$ |
|
$ |
- Basic and diluted |
|
0.443 |
|
0.319 |
|
|
|
|
|
NEW BRITAIN PALM OIL LIMITED
Consolidated Balance Sheet (Unaudited)
At 31 December
|
|
|
||
|
|
2014 |
|
2013 |
|
|
USD'000 |
|
USD'000 |
|
|
|
|
|
NON CURRENT ASSETS |
|
|
|
|
Property, plant and equipment |
|
736,569 |
|
755,425 |
Biological assets |
|
349,662 |
|
370,206 |
Intangible assets |
|
45,903 |
|
47,084 |
|
|
1,132,134 |
|
1,172,715 |
|
|
|
|
|
CURRENT ASSETS |
|
|
|
|
Cash and cash equivalents |
|
16,956 |
|
30,925 |
Trade and other receivables |
|
150,109 |
|
85,175 |
Biological assets |
|
17,882 |
|
16,207 |
Inventories |
|
156,236 |
|
171,411 |
Current income tax assets |
|
2,112 |
|
- |
Derivative financial instruments |
|
- |
|
4,096 |
|
|
343,295 |
|
307,814 |
TOTAL ASSETS |
|
1,475,429 |
|
1,480,529 |
|
|
|
|
|
NON CURRENT LIABILITIES |
|
|
|
|
Borrowings |
|
164,479 |
|
179,934 |
Deferred income tax liabilities |
|
295,293 |
|
286,999 |
|
|
459,772 |
|
466,933 |
|
|
|
|
|
CURRENT LIABILITIES |
|
|
|
|
Borrowings |
|
83,333 |
|
92,698 |
Trade and other payables |
|
49,787 |
|
47,918 |
Current income tax liabilities |
|
- |
|
6,709 |
|
|
133,120 |
|
147,325 |
TOTAL LIABILITIES |
|
592,892 |
|
614,258 |
|
|
|
|
|
NET ASSETS |
|
882,537 |
|
866,271 |
|
|
|
|
|
SHAREHOLDERS' EQUITY |
|
|
|
|
Issued capital |
|
180,333 |
|
180,333 |
Other reserves |
|
50,672 |
|
70,649 |
Retained earnings |
|
635,451 |
|
599,298 |
|
|
|
|
|
|
|
866,456 |
|
850,280 |
Non-controlling interest in equity |
|
16,081 |
|
15,991 |
|
|
|
|
|
TOTAL EQUITY |
|
882,537 |
|
866,271 |
NEW BRITAIN PALM OIL LIMITED
Consolidated Statement of Changes in Equity (Unaudited)
|
|
Attributable to equity holders of the Company |
|
|
|
|
||||||
|
|
Issued |
|
Other |
|
Retained |
|
|
|
Non-Controlling |
|
Total |
|
|
Capital |
|
Reserves |
|
Earnings |
|
Total |
|
Interest |
|
Equity |
|
|
USD'000 |
|
USD'000 |
|
USD'000 |
|
USD'000 |
|
USD'000 |
|
USD'000 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance at 1 January 2013 |
|
180,333 |
|
224,201 |
|
568,286 |
|
972,820 |
|
10,123 |
|
982,943 |
Total comprehensive income for the year |
|
- |
|
(152,082) |
|
47,653 |
|
(104,429) |
|
5,868 |
|
(98,561) |
Currency translation differences |
|
- |
|
(1,470) |
|
- |
|
(1,470) |
|
- |
|
(1,470) |
Dividends paid |
|
- |
|
- |
|
(16,641) |
|
(16,641) |
|
- |
|
(16,641) |
Balance at 31 December 2013 |
|
180,333 |
|
70,649 |
|
599,298 |
|
850,280 |
|
15,991 |
|
866,271 |
Total comprehensive income for the year |
|
- |
|
(25,396) |
|
66,120 |
|
40,724 |
|
2,704 |
|
43,428 |
Currency translation differences |
|
- |
|
(178) |
|
- |
|
(178) |
|
- |
|
(178) |
Long term incentive plan |
|
- |
|
5,597 |
|
- |
|
5,597 |
|
- |
|
5,597 |
Dividends paid |
|
- |
|
- |
|
(29,967) |
|
(29,967) |
|
(2,614) |
|
(32,581) |
Balance at 31 December 2014 |
|
180,333 |
|
50,672 |
|
635,451 |
|
866,456 |
|
16,081 |
|
882,537 |
|
|
|
|
|
|
|
|
|
|
|
|
|
NEW BRITAIN PALM OIL LIMITED
Consolidated Statement of Cash Flows (Unaudited)
|
|
|
||
|
|
2014 |
|
2013 |
|
|
USD'000 |
|
USD'000 |
|
|
|
|
|
CASH FLOW FROM OPERATING ACTIVITIES |
|
|
|
|
Cash receipts from customers |
|
591,595 |
|
601,451 |
Cash payments to suppliers and employees |
|
(454,001) |
|
(444,121) |
Cash generated from operations |
|
137,594 |
|
157,330 |
|
|
|
|
|
Income tax paid |
|
(23,483) |
|
(5,082) |
Interest paid |
|
(8,176) |
|
(9,614) |
Interest received |
|
16 |
|
13 |
|
|
|
|
|
Net cash generated from operating activities |
|
105,951 |
|
142,647 |
|
|
|
|
|
CASH FLOW FROM INVESTING ACTIVITIES |
|
|
|
|
Purchase of property, plant and equipment |
|
(42,450) |
|
(41,607) |
Expenditure on plantation development |
|
(21,812) |
|
(26,458) |
Expenditure on biological assets |
|
(2,352) |
|
(2,627) |
|
|
|
|
|
Net cash used in investing activities |
|
(66,614) |
|
(70,692) |
|
|
|
|
|
CASH FLOW FROM FINANCING ACTIVITIES |
|
|
|
|
Proceeds from borrowings |
|
49,119 |
|
46,604 |
Repayment of borrowings |
|
(67,096) |
|
(77,866) |
Dividends paid to company shareholders |
|
(30,960) |
|
(14,522) |
|
|
|
|
|
Net cash from financing activities |
|
(48,937) |
|
(45,784) |
|
|
|
|
|
NET INCREASE/(DECREASE) IN CASH AND CASH EQUIVALENTS AND BANK OVERDRAFTS |
|
(9,602) |
|
26,171 |
Effects of exchange rate changes on cash and cash equivalents and bank overdrafts |
|
2,557 |
|
(652) |
Add: Cash and cash equivalents and bank overdrafts at the beginning of the year |
|
8,701 |
|
(16,818) |
|
|
|
|
|
CASH AND CASH EQUIVALENTS AND BANK OVERDRAFTS AT THE END OF THE YEAR |
|
1,656 |
|
8,701 |
|
|
|
|
|
The following balances comprise cash and cash equivalents and bank overdrafts at the end of the year:
Cash and bank balances |
|
16,956 |
|
30,925 |
Short term borrowings (included in current borrowings) |
|
(15,300) |
|
(13,247) |
Bank overdraft (included in current borrowings) |
|
- |
|
(8,977) |
|
|
|
|
|
|
|
1,656 |
|
8,701 |
Reconciliation of Profit After Income Tax To Net Cash Generated From Operating Activities (Unaudited)
|
|
||
|
2014 |
|
2013 |
|
USD'000 |
|
USD'000 |
|
|
|
|
Profit after income tax |
68,623 |
|
50,060 |
|
|
|
|
Add/(less) non-cash items: |
|
|
|
Depreciation and amortisation |
66,286 |
|
69,921 |
Net loss/(gain) arising from changes in fair value of biological assets |
11,567 |
|
(53,678) |
Net gain arising on recognition of agricultural products |
(2,772) |
|
(8,159) |
Gain on acquisition of subsidiary |
(8,369) |
|
- |
Foreign currency exchange differences |
13,565 |
|
23,186 |
Deferred income tax |
17,718 |
|
15,142 |
|
|
|
|
Add/(less) movements in working capital items: |
|||
(Increase)/decrease in trade and other receivables |
(65,717) |
|
33,383 |
(Decrease)/increase in current income tax liabilities |
(6,573) |
|
944 |
Decrease in trade and other payables |
(5,020) |
|
(5,733) |
Decrease in inventories |
16,643 |
|
17,581 |
|
|
|
|
Net cash generated from operating activities |
105,951 |
|
142,647 |
|
|
|
|
NEW BRITAIN PALM OIL LIMITED
Notes to the financial statements
1. Basis of financial statements preparation
The financial information in this statement is prepared in accordance with International Financial Reporting Standards ("IFRS") (and International Financial Reporting Interpretations Committee ("IFRIC") interpretations).
They have been prepared on the basis of the accounting policies set out in the Group's 2013 Annual Report and have been consistently applied throughout the year. Where necessary, comparative figures have been adjusted to conform with changes in presentation in the current year.
2. Status of financial information
This preliminary announcement does not constitute the Group's consolidated statutory financial statements for the year ended 31 December 2014. This report is based on the accounts which are in the process of being prepared and audited and which will be approved by the Board and reported on by the auditors by 27 March 2015 and subsequently sent to shareholders and filed with the PNG Registrar of Companies. Accordingly, the financial information contained in this announcement is unaudited and does not have the status of statutory accounts.
Financial information for the year ended 31 December 2013 has been extracted from the audited financial statements as filed with the PNG Registrar of Companies. The auditors' report on the full financial statements for the year ended 31 December 2013 was unqualified.
3. Reconciliation of reported Profit before tax
|
|
|
|
||
|
|
2014 |
|
2013 |
|
|
|
USD'000 |
|
USD'000 |
|
|
|
|
|
|
|
Profit before tax |
|
105,115 |
|
70,982 |
|
Net loss/(gain) arising from changes in fair value of biological assets |
|
11,567 |
|
(53,678) |
|
Profit before tax excluding the effects of revaluing biological assets under IAS 41 |
|
116,682 |
|
17,304 |
|
|
|
|
|
|
|
4. Earnings per share
|
|
|
|
||
|
|
2014 |
|
2013 |
|
|
|
USD'000 |
|
USD'000 |
|
|
|
|
|
|
|
Net profit attributable to ordinary shareholders used in basic and diluted EPS |
|
66,120 |
|
47,653 |
|
Net loss/(gain) arising from changes in fair value of biological assets attributable to ordinary shareholders, net of tax (*) |
|
8,041 |
|
(36,572) |
|
Net profit attributable to ordinary shareholders before changes in fair value of biological asset |
|
74,161 |
|
11,082 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average number of ordinary shares ('000) used in basic and diluted EPS |
|
149,382 |
|
149,382 |
|
Basic EPS (USD/share) |
|
0.443 |
|
0.319 |
|
Basic EPS before changes in fair value of biological assets (USD/share) |
|
0.496 |
|
0.074 |
|
|
|
|
|
|
|
* The net (gain)loss arising from changes in fair value of biological assets attributable to ordinary |
|||
shareholders, net of tax is reconciled to the income statement as follows: |
|
|
|
Net loss/(gain) arising from changes in fair value of biological assets |
|
11,567 |
|
(53,678) |
Income tax (credit)/expense |
|
(3,470) |
|
16,103 |
|
|
8,097 |
|
(37,575) |
Attributable to: |
|
|
|
|
Ordinary shareholders |
|
8,041 |
|
(36,572) |
Non-controlling interest |
|
56 |
|
(1,003) |
|
|
8,097 |
|
(37,575) |
|
|
|
|
|
5. Income tax
|
|
|
||
|
2014 |
|
2013 |
|
|
USD'000 |
|
USD'000 |
|
Income Tax Expense |
|
|
|
|
|
|
|
|
|
Current tax |
17,962 |
|
5,737 |
|
Deferred tax |
17,718 |
|
15,142 |
|
Over provision in prior years |
812 |
|
43 |
|
|
36,492 |
|
20,922 |
|
The income tax expense has been calculated as follows: |
|
|
|
|
Profit for the year |
105,115 |
|
70,982 |
|
|
|
|
|
|
Income tax at 30% |
31,535 |
|
21,295 |
|
|
|
|
|
|
Tax effect of: |
|
|
|
|
Non-deductible (assessable) items |
4,145 |
|
(415) |
|
Over provision in prior years |
812 |
|
43 |
|
Income tax expense |
36,492 |
|
20,922 |
|
|
|
|
|
|
6. Exchange rates
Items included in the financial statements of each of the Group's entities are measured using the currency of the primary economic environment in which the entity operates. The consolidated 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 31 December 2014 is PGK 1.00 = USD 0.3855 (31 December 2013: PGK 1.00 = USD 0.3955).
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 31 December 2014 is PGK 1.00 = USD 0.3890 (31 December 2013: PGK 1.00 = USD 0.4313).
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