Q3 2023 KP Fértil® Sales Update

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 or contact:

Harvest Minerals Limited	Brian McMaster (Chairman)	Tel: [phone]
Strand Hanson Limited Nominated & Financial Adviser	Ritchie Balmer James Spinney	Tel: [phone]
Tavira Securities Broker	Jonathan Evans	Tel: [phone]
St Brides Partners Ltd Financial PR	Ana Ribeiro Isabel de Salis	[e-mail]

 

END