United Cacao Limited SEZC (AIM: CHOC), the AIM-quoted cacao plantation company based in Peru,has given DirectorsTalk its final audited results for the year to 31 December 2015. All figures are in US dollars unless otherwise indicated.
Highlights during the period:
· Share and convertible bond placement totalling US$ 7,360,000, before expenses, on 27 October 2015 to new and existing investors, including family office and institutional investors.
· Admission of the Company’s ordinary share capital for trading on the Lima Stock Exchange (Bolsa de Valores de Lima) on 19 June 2015.
· Launch of the Company’s innovative small farmer out-grower financing programme known as Programa Alianza Producción Estratégica Cacao (“PAPEC”) on 17 April 2015.
· Increase in the Company’s titled freehold, agriculture land resource to 3,985 hectares (9,847 acres) as at 31 December 2015.
· Total area planted with cacao of 1,656 hectares (4,092 acres), comprising 1,469 hectares (3,629 acres) of corporate estate and 187 hectares (462 acres) of PAPEC, as at 31 December 2015.
Highlights post the period end:
· Land privatization applications encompassing 12,097 hectares (29,892 acres) submitted to the Peruvian agricultural authorities, at their invitation, on 24 May 2016 which the Company expects to be approved in approximately eighteen months’ time.
· Successful litigation results from the Federal Supreme Court of Peru on 12 January 2016 which re-affirmed the Loreto Superior Court of Appeals decision of 26 March 2015 and the Superior Court of Justice’s original 30 September 2014 decision. These rulings definitively confirm, without any doubt, the Company’s freehold properties’ environmental permitting and agricultural zoning since 1997.
· 1,825 hectares (4,509 acres) of cacao planted as at 31 May 2016 comprised of 1,638 hectares (4,047 acres) of corporate estate and 187 hectares (462 acres) of PAPEC.
Mr Dennis Melka, Executive Chairman and CEO of the Group said: “The Company is now one of the world’s largest corporate cacao estates with 1,638 hectares planted – this is an outstanding achievement in the industry and simply without global precedent. All of the Company’s estates are on perpetual, freehold titled land in a zero tax-rated special economic zone with perfect climatic conditions for cacao cultivation.
In addition to our corporate estate, our small-farmer out-grower programme (PAPEC), now exceeds 187 hectares and is expected to reach 300 hectares by year-end. The PAPEC co-operative programme bonds the Company with over 147 families from 17 local communities.
Global cacao production continues its steady year-over-year decline to an estimated 4.0 million tonnes in 2016 (compared with 4.3m tonnes in 2011) as estimated by the ICCO. However, global chocolate confectionary sales continue to experience steady annual growth resulting in yet another global annual deficit of over hundred seventy thousand tonnes, as demand (measured by grindings) is estimated to be over 4.17m tonnes in 2016.
As we now have finished our main planting programme, we are focused on bringing the estate into production and expanding our land bank. The estate has been developed to be approximately half fine flavour cacao and half CCN-51; furthermore, our first commercial sales are expected to commence in early 2017. Lastly, the government’s agricultural land privatization programme affords the Company a unique strategic opportunity to cost-effectively grow its land bank of titled agricultural land with perfect climatic conditions for cacao cultivation.”
