REG - Harvest Minerals Ltd - Q3 2023 KP Fértil® Sales Update

Harvest MineralsAnnouncement

23/10/2023 07:15

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RNS Number : 9420Q  Harvest Minerals Limited  23 October 2023

 

Harvest Minerals Limited / Index: LSE / Epic: HMI / Sector: Mining

23 October 2023

Harvest Minerals Limited

('Harvest' or the 'Company')

 

Q3 2023 KP Fértil® Sales Update

 

Harvest Minerals Limited, the AIM listed fertiliser producer, provides the
following update on Q3 2023 sales of its organic, multi-nutrient, direct
application fertiliser, KP Fértil®, from its 100% owned Arapuá Fertiliser
Project in Brazil ('Arapuá').

 

OVERVIEW

·    Orders to the end of September 2023 totalled 40,000 tonnes, of which
22,500 tonnes has been invoiced for payment and 17,500 tonnes is forecast to
be invoiced for payment by end December 2023

·    Further orders forecast to be placed during Q4 2023 total 30,000
tonnes

·    2023 full year orders target therefore 70,000 tonnes, the majority of
which is expected to be invoiced by the end of December 2023

·    Fertilizer demand expected to improve during 2024, but the uncertain
market conditions are expected to continue throughout 2023 and at least the
early stages of 2024

 

Brian McMaster, Chairman of Harvest, said: "2023 continues to be a challenging
year for fertilizer companies globally as prices of fertilizer fell.  Sales
of KP Fértil® have been impacted by farmers reducing spending on fertilizer
in anticipation of further price drops and hopes for improved crop
conditions.  The volatility being experienced by the Company is a
macroeconomic issue and outside of our control.  While ultimately, we expect
fertilizer demand to improve in 2024, given the level of uncertainty
experienced year to date, we do not have a sensible read on when that
turnaround in conditions might come.  The Company has done all it can in
terms of reducing overheard and OPEX costs and will keep the market updated on
our progress."

 

REVIEW OF OPERATIONS

Sales at Arapuá Fertiliser Project

In Q3 2023, Harvest received new orders totalling 13,000 tonnes of its KP
Fértil® produced at its Arapuá Fertiliser Project in Brazil bringing the
total orders to the end of September 2023 to 40,000 tonnes, of which 22,500
has been invoiced for payment.  The remaining 17,500 tonnes is forecast to be
invoiced during Q4 2023. In terms of revenue recognition in the interim and
annual financial statements, accounting regulations that the Company is
subject to require that delivery of the product has also occurred, which can
lead to a timing mismatch between tonnes reported as invoiced in trading
updates, and the tonnes reported as sold as the financial statements.

 

Cash is gradually being received for the 33,000 tonnes order invoiced in 2022
as deliveries of that product occur. To date, approximately 10,000 tonnes of
this product has been delivered and we continue to work with these customers
regarding delivery of the balance, although we forecast that not all 33,000
tonnes will be delivered before year end.

 

Following the record high global fertilizer prices seen in 2022, fertilizer
stocks returned to normal levels in 2023 causing the price of fertilizers to
drop. Simultaneously, the price of the soybean, the main crop planted in
Brazil, also dropped, reaching levels below the expectations of the farmers
and, in some cases, close to the cost of production.  Accordingly, farmers
have postponed the sale of grains in 2023 in anticipation of a price increase
and postponed the purchase of fertilizers in anticipation of a price drop.

 

While the Company expects fertilizer demand will improve at some point during
2024, the Company reports that it continues to experience volatile and
uncertain buying patterns form customers.

 

**ENDS**

 

For further information, please visit www.harvestminerals.net
(http://www.harvestminerals.net/)  or contact:

 

 Harvest Minerals Limited            Brian McMaster (Chairman)   Tel: +44 (0)20 3940 6625

 Strand Hanson Limited               Ritchie Balmer              Tel: +44 (0)20 7409 3494

 Nominated & Financial Adviser       James Spinney

 Tavira Securities                   Jonathan Evans              Tel: +44 (0)20 3192 1733

 Broker

 St Brides Partners Ltd              Ana Ribeiro                 harvest@stbridespartners.co.uk

 Financial PR                        Isabel de Salis

 

 

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