REG - Dekel Agri-Vision - 2023 Final Results and Financing Update
28/06/2024 17:30
For best results when printing this announcement, please click on link below:
http://newsfile.refinitiv.com/getnewsfile/v1/story?guid=urn:newsml:reuters.com:20240628:nRSb4527Ua&default-theme=true
RNS Number : 4527U Dekel Agri-Vision PLC 28 June 2024
THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION AS STIPULATED UNDER THE UK
VERSION OF THE MARKET ABUSE REGULATION NO 596/2014 WHICH IS PART OF ENGLISH
LAW BY VIRTUE OF THE EUROPEAN (WITHDRAWAL) ACT 2018, AS AMENDED. ON
PUBLICATION OF THIS ANNOUNCEMENT VIA A REGULATORY INFORMATION SERVICE, THIS
INFORMATION IS CONSIDERED TO BE IN THE PUBLIC DOMAIN.
Dekel Agri-Vision Plc / Index: AIM / Epic: DKL / Sector: Food Producers
28 June 2024
Dekel Agri-Vision Plc ('Dekel' or the 'Company')
2023 Final Results and Financing Update
Dekel Agri-Vision Plc (AIM: DKL), the West African agribusiness company
focused on building a portfolio of sustainable and diversified projects, is
pleased to announce its audited results for the year ended 31 December 2023
(the 'Accounts'). The Accounts will be made available to download later today
from the Company's website or mailed to individual shareholders who have
elected to receive a physical copy. www.dekelagrivision.com.
Financial Highlights
Palm Oil Operation
· 22% increase in revenues to €37.1m (2022: €30.5m) driven by a
49.5% increase in Crude Palm Oil ('CPO') sales volumes more than offsetting a
15.2% decrease in CPO prices - includes sale of CPO, Palm Kernel Oil ('PKO'),
Palm Kernel Cake ('PKC') and Nursery Plants.
· Gross margin decreased 19.5% primarily due to lower CPO prices
and extraction rates.
· 4.2% increase in EBITDA to €4.8m (2022: €4.6m) due to prudent
cost control during an inflationary environment.
Cashew Operation
· 57.1% increase in revenues to €1.1m (2022: €0.7m). The
increase in revenue was below expectations due to previously reported
challengers in the peeling and shelling sections which are in the process of
being rectified.
· EBITDA loss of €2.2m compared to an EBITDA loss of €1.9m.
Year ended 31 December 2023 2022 % change
Palm Oil Operation
Revenue €37.2m €30.5m 22.0%
Gross Margin €5.7m €5.8m -1.7%
Gross Margin % 15.3% 19.0% -19.5%
EBITDA €4.8m €4.6m 4.2%
Cashew Operation
Revenue €1.1m €0.7m 57.1%
EBITDA (€2.2m) (€1.9m) -15.8%
Group EBITDA €2.6m €2.7m -3.7%
The summary of the Group Financial Performance for FY2023 is laid out further
below.
Financing Update
· The Company has entered the following refinancing arrangements to
ensure the Group is well funded during the expected period of ramp up of the
Cashew Operations and to ensure the group has committed facilities to cover
loans maturing over the next 12 months:
· AgDevco Refinance
o Deferment of AgDevCo first principal repayment due on 9th August 2024 of
€900,000 to be paid over 6 months from 9th September 2025.
o Interest rate to increase from 7.00% to 9.00% per annum in respect of the
outstanding balance from 9th August 2024.
· Loan from Youval Rasin, CEO
o c.€2.3m loan with interest of 10% per annum
o Principal and interest repayable in 2 years.
Related Party Transaction
The loan from Youval Rasin constitutes a related party transaction under AIM
Rule 13 of the AIM Rules for Companies. All of the Directors of the Company
with the exception of Youval Rasin are regarded as independent for this
transaction. The independent Directors, having consulted with the Company's
Nominated Adviser, considers the terms of the Loan to be fair and reasonable
in so far as its shareholders are concerned.
Operational Highlights - Palm Oil Operation
· Fresh Fruit Bunch ('FFB') volumes and Crude Palm Oil ('CPO')
production increased 56.1% and 51.7% respectively compared to FY 2022.
o The strong 2023 production performance of the Palm Oil operation was
driven by ten consecutive months of higher like-for-like production from March
2023 onwards.
· CPO sales quantities increased 49.5% in FY 2023 compared to last
year, which was consistent with the higher CPO production. In addition, PKO
production increased 32.7% in FY 2023 compared to last year.
· The FY 2023 average CPO sales price achieved was historically
strong at €869 per tonne, albeit 15.2% below the record H1 2022 CPO sales
prices.
· The CPO extraction rate for FY 2023 of 21.4% was slightly lower
than FY 2022 of 22.1% but remained well in line with expectations.
Operational Highlights - Cashew Operation Update
· Whilst it was pleasing to commence commercial production, the
anticipated ramp up of daily production rates during FY-2023 was hampered by
ongoing technical issues primarily in the shelling and peeling sections due to
underperforming shelling and peeling machinery provided by our supplier.
· New equipment has been ordered and is expected to arrive shortly
at which point we expect to a significant improvement in production volumes in
H2 2024.
· The successful completion of the BRC Global Food standard
assessment which took place in Q2 2023 and other key KPIs including raw
material prices, extraction rates meeting expectations was a positive.
Lincoln Moore, Dekel's Executive Director, said: "The Palm Oil Operation
continues to be a very solid performer delivering €4.8m EBITDA for the
Group. The real catalyst for the next phase of growth relates to the Cashew
Operation. We are working to implement the new equipment as soon as possible
over the coming months at which point, we expect it will become a positive
contributor to Group performance and ultimately we believe will drive a
material improvement in share price performance".
This announcement contains inside information for the purposes of Article 7 of
the UK version of Regulation (EU) No 596/2014 which is part of UK law by
virtue of the European Union (Withdrawal) Act 2018, as amended ("MAR"). Upon
the publication of this announcement via a Regulatory Information Service,
this inside information is now considered to be in the public domain.
** ENDS **
For further information please visit the Company's website
www.dekelagrivision.com or contact:
Dekel Agri-Vision Plc +44 (0) 207 236 1177
Youval Rasin
Shai Kol
Lincoln Moore
WH Ireland Ltd (Nomad and Joint Broker) +44 (0) 20 7220 1666
James Joyce
Darshan Patel
Isaac Hooper
Optiva Securities Limited (Joint Broker) +44 (0) 203 137 1903
Christian Dennis
Daniel Ingram
Notes:
Dekel Agri-Vision Plc is a multi-project, multi-commodity agriculture company
focused on West Africa. It has a portfolio of projects in Côte d'Ivoire at
various stages of development: a fully operational palm oil project in
Ayenouan where fruit produced by local smallholders is processed at the
Company's 60,000tpa capacity crude palm oil mill and a cashew processing
project in Tiebissou, which is currently transitioning to full commercial
production.
CHAIRMAN'S STATEMENT
Palm Oil Operation
2023 saw a significant rebound in CPO production increasing 51.7% in FY 2023
compared to FY 2022. The improvement in production volumes is largely due to
a much stronger FFB harvesting season compared to 2022 and a period of smooth
operating performance from our logistics and milling teams who have been able
to take full advantage of improved market volumes. CPO sales volumes in FY
2023 also increased 49.5% compared to FY 2022.
CPO sales prices traded well above historically averages, albeit 15.2% lower
than the record levels achieved in 2022. Local CPO prices continue to trade
approximately €100 per tonne below international prices as in country
efforts to minimise food inflation continued throughout 2023. We are seeing
local prices slowly and gradually increase towards the international CPO price
which remains historically high and supportive of our Palm Oil Operation.
The combined balance of strong CPO production and relatively high CPO prices
resulted in the Palm Oil Operation delivering EBITDA of €4.8m in FY 2023, a
4.2% increase compared to FY 2022.
Cashew Operation
The Cashew Operation commenced commercial production in early FY 2023.
However, the anticipated ramp up of daily production rates during FY 2023 was
hampered by ongoing technical issues primarily in the shelling and peeling
sections due to underperforming machinery provided by our supplier.
During Q4 2023, an independent expert was appointed to assess the equipment
performance and full production chain. This expert recommended replacing of
parts of the shelling and peeling sections which required an investment of
c.€250,000 from existing cash resources. All new shelling and peeling
equipment was ordered in January 2024, with latest shipping time tables
showing deliveries are expected shortly. With optimal performance of the
shelling and peeling stations working in tandem with the other 10 well
performing stations, we expect to see a material improvement in cashew
production volumes and quality during H2 2024.
The Cashew Operation ramp up remains the key catalyst to drive both our short
and medium term growth plans and remains the main drag on our share price
performance. We are buoyed by the fact one of the other local Cashew
Operations in our regions experienced almost identical issues with their
equipment from the same supplier and their recent shift over to alternate
shelling and peeling equipment, with the over sight of the same expert
consultant we engaged, has resulted in a drastic improvement in operational
and financial performance. We are therefore doing everything we can to
deliver the same outcome as quickly as possible.
Other Projects
Whilst we have further expansion plans, including the processing of a third
commodity in addition to clean energy aspirations, these projects are on hold
as we focus on enhancing the production volumes of the Cashew Operation.
Group Financial Performance
A summary of the Group financial performance for FY2023, in addition to the
comparatives for the previous 5 years, is outlined in the table below.
FY2023 FY2022 FY2021 FY 2020 FY 2019 FY 2018
FFB collected (tonnes) 182,362 116,733 190,020 154,151 176,019 146,036
CPO production (tonnes) 39,073 25,751 39,953 34,002 37,649 33,077
CPO sales (tonnes) 38,896 26,016 39,092 34,008 37,713 32,692
Average CPO price per tonne €869 €1,025 €868 €602 €491 €542
Total Revenue (all products) €38.3m €31.2m €37.4m €22.5m €20.9m €20.9m
Gross Margin €2.1m €5.1m €6.5m €2.3m €1.7m €1.7m
Gross Margin % 5.5% 16.7% 17.4% 10.2% 8.1% 8.3%
Overheads €3.6m €3.9m €3.8m €2.8m €3.2m €3.2m
EBITDA €2.6m €2.7m €4.8m €1.2m €0.2m (€0.2m)
EBITDA % 6.8% 9.3% 12.8% 5.3% 1.0% -
Net Profit / (Loss) After Tax (€4.5m) (€1.3m) €0.6m (€2.2m) (€3.3m) (€3.3m)
Net Profit / (Loss) After Tax % - - 1.6% - - -
Total Assets €50.6.m €54.7m €51.7m €43.3m €33.6m €33.4m
Total Liabilities €39.6m €39.4m €35.5m €30.8m €20.8m €21.8m
Total Equity €11.0m €15.3m €16.3m €12.5m €12.8m €11.6m
Dekel reported FY 2023 EBITDA of €2.6m compared to €2.7m FR 2023 EBITDA.
The €0.1m decrease in EBITDA was driven by:
· A €0.2m increase in the Palm Oil Operation EBITDA was largely
due to the increase in CPO sales volumes and well maintained overhead expense
more than offsetting lower CPO prices and CPO extraction rates.
· A €0.3m increase in the Cashew Operation EBITDA loss due to
operating inefficiencies resulting ongoing technical issues with the peeling
and shelling section provided by our original supplier.
Dekel reported a FY 2023 Net Loss after Tax of €4.5m compared to a Net Loss
after Tax of €1.3m. This increase in loss of €2.5m was primarily driven
by:
· The first full year inclusion of FY 2023 of depreciation from the
Cashew Operation increasing Group depreciation by €2.5m.
· An increase in Cashew Operations interest expense of €0.5m in
FY 2023 which was previously capitalised in FY 2022 prior to the commencement
of commercial production.
Outlook
Looking ahead, the Palm Oil Operation continues to be a very solid performer
for the Group. The real catalyst for enhanced financial results relates to
the rectification of the performance issues of the Cashew Operation. We are
working to implement new equipment as soon a possible over the coming months
to ensure it becomes a positive contributor to Group performance and
ultimately drives a rebound in share price performance.
I extend my gratitude to the Board, Management, employees, and advisors for
their support and hard work throughout the year.
Andrew Tillery
Non-Executive
Chairman
Date: 28 June 2024
CONSOLIDATED STATEMENTS OF FINANCIAL POSITION
31 December
2023 2022
Note Euros in thousands
ASSETS
CURRENT ASSETS:
Cash and cash equivalents 209 2,240
Trade receivables 1,571 1,568
Inventory 4 3,037 3,158
Bank deposits - restricted 10 673 679
Other accounts receivable 5 1,017 950
Total current assets 6,507 8,595
NON-CURRENT ASSETS:
Bank deposits - restricted 10 1,025 850
Property and equipment, net 7 43,084 45,235
Total non-current assets 44,109 46,085
Total assets 50,616 54,680
The accompanying notes are an integral part of the consolidated financial
statements.
CONSOLIDATED STATEMENTS OF FINANCIAL POSITION
31 December
2023 2022
Note Euros in thousands
LIABILITIES AND EQUITY
CURRENT LIABILITIES:
Short-term loans and current maturities of long-term loans 10b 8,470 5,671
Trade payables 2,795 1,359
Advances from customers 499 346
Other accounts payable 8 3,451 3,852
Total current liabilities 15,215 11,228
NON-CURRENT LIABILITIES:
Long-term lease liabilities 9 128 128
Accrued severance pay, net 72 127
Loan from shareholder 6 679 630
Long-term loans 10 23,572 27,241
Total non-current liabilities 24,451 28,126
Total liabilities 39,666 39,354
EQUITY: 11
Share capital 178 177
Additional paid-in capital 40,817 40,736
Accumulated deficit (23,262) (18,804)
Capital reserve 2,532 2,532
Capital reserve from transactions with non-controlling interests (9,315) (9,315)
Total equity 10,950 15,326
Total liabilities and equity 50,616 54,680
The accompanying notes are an integral part of the consolidated financial
statements.
28 June, 2024
Date of approval of the Youval Rasin Yehoshua Shai Kol Lincoln John Moore
financial statements Director and Chief Executive Officer Director and Chief Finance Officer Executive Director
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
Year ended
31 December
2023 2022
Note Euros in thousands
(except per share amounts)
Revenues 12 38,299 31,205
Cost of revenues 15a 36,239 26,185
Gross profit 2,060 5,020
General and administrative expenses 15b 3,562 3,845
Operating profit (1,502) 1,175
Other income - 103
Finance cost 15c (2,881) (2,475)
Income (loss) before taxes on income (4,383) (1,197)
Taxes on income 14 (75) 141
Net income (loss) and total comprehensive income (loss) (4,458) (1,338)
Attributable to:
Equity holders of the Company (4,458) (833)
Non-controlling interests - (505)
Net income (loss) and total comprehensive income (loss) (4,458) (1,338)
Net earnings (loss) per share attributable to equity holders of the Company:
Basic and diluted net earnings (loss) per share 16 )0.01) 0.00
The accompanying notes are an integral part of the consolidated financial
statements.
CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY
Attributable to equity holders of the Company
Share Additional paid-in Aaccumulated deficit Capital reserve Capital reserve from transactions with non-controlling interests Total Non-controlling interests Total
capital capital equity
Balance as of 1 January 2022 170 39,985 (17,971) 2,532 (8,710) 16,006 329 16,335
Net loss and total comprehensive loss - - (833) - - (833) (505) (1,338)
Issue of shares for services provided (Note 11) - 44 - - 44 - 44
Issue of shares upon acquisition of non-controlling interests (Note 6) 7 707 - - (605) 109 176 285
Balance as of 31 December 2022 177 40,736 (18,804) 2,532 (9,315) 15,326 - 15,326
Net loss and total comprehensive loss - - (4,458) - - (4,458) - (4,458)
Issue of shares for services provided (Note 11) 1 81 - - 82 - 82
Balance as of 31 December 2023 178 40,817 (23,262) 2,532 (9,315) 10,950 - 10,950
The accompanying notes are an integral part of the consolidated financial
statements.
CONSOLIDATED STATEMENTS OF CASH FLOWS
Year ended
31 December
2023 2022
Euros in thousands
Cash flows from operating activities:
Net income (loss) (4,458) (1,338)
Adjustments to reconcile net income (loss) to net cash provided by (used in)
operating activities:
Adjustments to the profit or loss items:
Depreciation 4,103 1,554
Share based compensation 55 -
Accrued interest on long-term loans and non-current liabilities 3,470 1,421
Change in employee benefit liabilities, net (55) (8)
Gain from sale of property and equipment - (103)
Changes in asset and liability items:
Decrease in inventories 121 82
Increase in other accounts receivable (33) (531)
Increase in trade payables 1,436 28
Increase (decrease) in advances from customers 153 238
Increase (decrease) in other accounts payable (374) 1,206
8,876 3,887
Cash paid during the year for:
Income taxes (37) (135)
Interest (2,424) (1,848)
(2,461) (1,983)
Net cash provided by (used in) operating activities 1,957 566
The accompanying notes are an integral part of the consolidated financial
statements.
CONSOLIDATED STATEMENTS OF CASH FLOWS
Year ended
31 December
2023 2022
Euros in thousands
Cash flows from investing activities:
Investment in bank deposits (149) (433)
Sale of property and equipment - 206
Purchase of property and equipment (1,952) (2,566)
Net cash used in investing activities (2,101) (2,793)
Cash flows from financing activities:
Long-term lease, net - (41)
Receipt (repayments) of short-term loans, net 1,367 (1,668)
Receipt of long-term loans - 10,577
Repayment of long-term loans (3,254) (5,995)
Net cash provided by (used in) financing activities (1,887) 2,873
Increase (decrease) in cash and cash equivalents (2,031) 645
Cash and cash equivalents at beginning of year 2,240 1,595
Cash and cash equivalents at end of year 209 2,240
Supplemental disclosure of non-cash activities:
Issuance of shares to director and service providers 27 -
Issuance of shares in consideration for non-controlling interest in Pearlside - 714
The accompanying notes are an integral part of the consolidated financial
information.
NOTE 1:- GENERAL
a. Dekel Agri-Vision PLC ("the Company") is a public limited
company incorporated in Cyprus on 24 October 2007. The Company's Ordinary
shares are admitted for trading on the AIM, a market operated by the London
Stock Exchange. The Company is engaged through its subsidiaries in developing
and cultivating palm oil plantations in Cote d'Ivoire for the purpose of
producing and marketing Crude Palm Oil ("CPO"), as well as constructing a Raw
Cashew Nut ("RCN") processing plant, which is currently in the initial
production phase. The Company's registered office is in Limassol, Cyprus.
b. CS DekelOil Siva Ltd. ("DekelOil Siva"), a company incorporated
in Cyprus, is a wholly owned subsidiary of the Company. DekelOil CI SA, a
subsidiary in Cote d'Ivoire currently held 99.85% by DekelOil Siva, is engaged
in developing and cultivating palm oil plantations for the purpose of
producing and marketing CPO. DekelOil CI SA constructed and is currently
operating its palm oil mill.
c. Pearlside Holdings Ltd. ("Pearlside"), a company incorporated
in Cyprus, is a subsidiary of the Company since December 2020. The Company
holds 100% interest since December 2022 (previously 70.7% interest since
February 2021). Pearlside has a wholly owned subsidiary in Cote d'Ivoire,
Capro CI SA ("Capro"). Capro is currently engaged in the initial production
phase of its RCN processing plant in Cote d'Ivoire near the village of Tiabisu
(see also Note 11).
d. DekelOil Consulting Ltd. a company located in Israel and a wholly
owned subsidiary of DekelOil Siva, is engaged in providing services to the
Company and its subsidiaries.
e. Going concern:
In 2023 the Company generated a positive cash flow from operations of €2.0
million which is a significant increase as compared to the positive cash flow
of €0.5 million in 2022. Palm Oil activity continued to be strong and
continued to generate positive operating cash flow, which was offset by the
negative operating cash flow from the RCN activity which operated in limited
capacity. In recent months some modifications and additions were made, and the
operational capacity of the RCN processing plant is expected to increase
materially over the coming months. The Group has prepared detailed forecasted
cash flows through the end of 2025, which tentatively indicates that the Group
may continue to have positive cash flows from its operations. However, the
operations of the RCN processing plant are currently subject to technical
production difficulties that may not be resolved in the foreseeable future,
which may have an adverse effect on future cash flows from operations.
The Group working capital deficiency as of 31 December 2023 increased to
€8.7 million from €2.6 million as of 31 December 2022, which is mainly due
to the increase in current maturities of long-term loans for which the
principal repayment grace period has ended.
NOTE 1:- GENERAL (Cont.)
As described in Note 20, in June 2024 a lender has agreed to postpone the
first loan principal instalment in the amount of €900 thousand due in August
2024 by one year, such that the loan will be repayable over 6 months from
September 2025. In addition, as described in Note 20, in June 2024 a principal
shareholder , and a director, has provided the Company an immediate loan in
the amount of €2.3 million and a loan facility in the amount of €900
thousand which facility will be available for withdrawal from 1 December 2024.
Based on the above, the Company's management believes it will have sufficient
funds necessary to continue its operations and to meet its obligations as they
become due for at least a period of twelve months from the date of approval of
the financial statements.
NOTE 2:- SIGNIFICANT ACCOUNTING POLICIES
The following accounting policies have been applied consistently in the
financial statements for all periods presented, unless otherwise stated.
a. Basis of presentation of the financial statements:
These financial statements have been prepared in accordance with International
Financial Reporting Standards as adopted by the European Union ("IFRS").
The financial statements have been prepared on a cost basis.
The Company has elected to present profit or loss items using the function of
expense method.
b. Consolidated financial statements:
The consolidated financial statements comprise the financial statements of
companies that are controlled by the Company (subsidiaries). Control is
achieved when the Company is exposed, or has rights, to variable returns from
its involvement with the investee and has the ability to affect those returns
through its power over the investee. Potential voting rights are considered
when assessing whether an entity has control. The consolidation of the
financial statements commences on the date on which control is obtained and
ends when such control ceases.
A change in the ownership interest of a subsidiary, without a change of
control, is accounted for as a change in equity by adjusting the carrying
amount of the non-controlling interests with a corresponding adjustment of the
equity attributable to equity holders of the Company less / plus the
consideration paid or received.
NOTE 2:- SIGNIFICANT ACCOUNTING POLICIES (Cont.)
d. Functional currency, presentation currency and foreign currency:
The local currency used in Cote d'Ivoire is the West African CFA Franc
("FCFA"), which has a fixed exchange rate with the Euro (Euro 1 = FCFA
655.957). A substantial portion of the Group's revenues and expenses is
incurred in or linked to the Euro. The Group obtains debt financing mostly in
FCFA linked to Euros and the funds of the Group are held in FCFA. Therefore,
the Company's management has determined that the Euro is the currency of the
primary economic environment of the Company and its subsidiaries, and thus its
functional currency. The presentation currency is Euro.
e. Cash equivalents:
Cash equivalents are considered as highly liquid investments, including
unrestricted short-term bank deposits with an original maturity of three
months or less from the date of acquisition.
f. Financial instruments:
1. Financial assets:
Financial assets are measured upon initial recognition at fair value plus
transaction costs that are directly attributable to the acquisition of the
financial assets, except for financial assets measured at fair value through
profit or loss in respect of which transaction costs are recorded in profit or
loss.
The Company classifies and measures debt instruments in the financial
statements based on the following criteria:
- The Company's business model for managing financial assets;
and
- The contractual cash flow terms of the financial asset.
NOTE 2:- SIGNIFICANT ACCOUNTING POLICIES (Cont.)
a) Debt instruments are measured at amortized cost when:
The Company's business model is to hold the financial assets in order to
collect their contractual cash flows, and the contractual terms of the
financial assets give rise on specified dates to cash flows that are solely
payments of principal and interest on the principal amount outstanding. After
initial recognition, the instruments in this category are measured according
to their terms at amortized cost using the effective interest rate method,
less any provision for impairment.
b) Equity instruments and other financial assets held for trading:
Investments in equity instruments do not meet the above criteria and
accordingly are measured at fair value through profit or loss.
Other financial assets held for trading, including derivatives, are measured
at fair value through profit or loss unless they are designated as effective
hedging instruments.
Dividends from investments in equity instruments are recognized in profit or
loss when the right to receive the dividends is established.
2. Impairment of financial assets:
The Company evaluates at the end of each reporting period the loss allowance
for financial debt instruments which are not measured at fair value through
profit or loss.
The Company has short-term financial assets such as trade receivables in
respect of which the Company applies a simplified approach and measures the
loss allowance in an amount equal to the lifetime expected credit losses. An
impairment loss on debt instruments measured at amortized cost is recognized
in profit or loss with a corresponding loss allowance that is offset from the
carrying amount of the financial asset.
As of 31 December 2023 and 2022, there were no past-due trade receivables.
NOTE 2:- SIGNIFICANT ACCOUNTING POLICIES (Cont.)
3. Financial liabilities:
Financial liabilities measured at amortized cost:
Financial liabilities are initially recognized at fair value less transaction
costs that are directly attributable to the issue of the financial liability.
After initial recognition, the Company measures all financial liabilities at
amortized cost using the effective interest rate method.
g. Borrowing costs:
The Group capitalizes borrowing costs that are attributable to the
acquisition, construction, or production of qualifying assets which
necessarily take a substantial period of time to get ready for their intended
use or sale.
The capitalization of borrowing costs commences when expenditures for the
asset are incurred, the activities to prepare the asset are in progress and
borrowing costs are incurred and ceases when substantially all the activities
to prepare the qualifying asset for its intended use or sale are complete. The
amount of borrowing costs capitalized in a reporting period includes specific
borrowing costs and general borrowing costs based on a weighted capitalization
rate.
h. Leases:
The Company accounts for a contract as a lease when the contract terms convey
the right to control the use of an identified asset for a period of time in
exchange for consideration.
NOTE 2:- SIGNIFICANT ACCOUNTING POLICIES (Cont.)
The Group as a lessee:
For leases in which the Company is the lessee, the Company recognizes on the
commencement date of the lease a right-of-use asset and a lease liability,
excluding leases whose term is up to 12 months and leases for which the
underlying asset is of low value. For these excluded leases, the Company has
elected to recognize the lease payments as an expense in profit or loss on a
straight-line basis over the lease term. In measuring the lease liability, the
Company has elected to apply the practical expedient in the Standard and does
not separate the lease components from the non-lease components (such as
management and maintenance services, etc.) included in a single contract.
On the commencement date, the lease liability includes all unpaid lease
payments discounted at the interest rate implicit in the lease, if that rate
can be readily determined, or otherwise using the Group's incremental
borrowing rate. After the commencement date, the Group measures the lease
liability using the effective interest rate method.
On the commencement date, the right-of-use asset is recognized in an amount
equal to the lease liability plus lease payments already made on or before the
commencement date and initial direct costs incurred. The right-of-use asset is
measured applying the cost model and depreciated over the shorter of its
useful life or the lease term.
Following are the periods of depreciation of the right-of-use assets by class
of underlying asset:
Years
Land 99
The Group tests for impairment of the right-of-use asset whenever there are
indications of impairment pursuant to the provisions of IAS 36.
i. Biological assets:
Biological assets of the Company are fresh fruit bunches (FFB) that grow on
palm oil trees. The period of biological transformation of FFB from blossom to
harvest and then conversion to inventory and sale is relatively short (about 2
months). Accordingly, any changes in fair value at each reporting date are
generally immaterial.
j. Property and equipment:
Property and equipment are stated at cost, net of accumulated depreciation.
Palm oil trees before maturity are measured at accumulated cost, and
depreciation commences upon reaching maturity.
NOTE 2:- SIGNIFICANT ACCOUNTING POLICIES (Cont.)
Depreciation is calculated by the straight-line method over the estimated
useful lives of the assets at the following annual rates:
%
Extraction mill 2.5
Palm oil plantations 3.33
Computers and peripheral equipment 33
Equipment and furniture 15 - 20
RCN processing mill 20
Motor vehicles 25
Agriculture equipment 15
The useful life, depreciation method and residual value of an asset are
reviewed at least each year-end and any changes are accounted for
prospectively as a change in accounting estimate. Depreciation of an asset
ceases at the earlier of the date that the asset is classified as held for
sale and the date that the asset is derecognized.
k. Impairment of non-financial assets:
The Company evaluates the need to record an impairment of non-financial assets
whenever events or changes in circumstances indicate that the carrying amount
is not recoverable.
If the carrying amount of non-financial assets exceeds their recoverable
amount, the assets are reduced to their recoverable amount. The recoverable
amount is the higher of fair value less costs of sale and value in use. In
measuring value in use, the expected future cash flows are discounted using a
pre-tax discount rate that reflects the risks specific to the asset. The
recoverable amount of an asset that does not generate independent cash flows
is determined for the cash-generating unit to which the asset belongs.
Impairment losses are recognized in profit or loss.
l. Revenue recognition:
Revenue from contracts with customers is recognized when the control over the
services is transferred to the customer. The transaction price is the amount
of the consideration that is expected to be received based on the contract
terms.
NOTE 2:- SIGNIFICANT ACCOUNTING POLICIES (Cont.)
Revenue from the sale of goods:
Revenue from sale of goods is recognized in profit or loss at the point in
time when the control of the goods is transferred to the customer, generally
upon delivery of the goods to the customer.
Contract balances:
Amounts received from customers in advance of performance by the Company are
recorded as contract liabilities/advance payments from customers and
recognized as revenue in profit or loss when the work is performed. For all
years presented in these financial statements, such advances were recognized
as revenues in the year subsequent to their receipt.
m. Inventories:
Inventories are measured at the lower of cost and net realizable value. The
cost of inventories comprises costs of purchase and costs incurred in bringing
the inventories to their present location and condition. Net realizable value
is the estimated selling price in the ordinary course of business less
estimated costs of completion and estimated costs necessary to make the sale.
The Company periodically evaluates the condition and age of inventories and
makes provisions for slow moving inventories accordingly.
Cost of finished goods inventories is determined on the basis of average costs
including materials, labor and other direct and indirect manufacturing costs
based on normal capacity.
NOTE 2:- SIGNIFICANT ACCOUNTING POLICIES (Cont.):
n. Fair value measurement:
Fair value is the price that would be received to sell an asset or paid to
transfer a liability in an orderly transaction between market participants at
the measurement date.
Fair value measurement is based on the assumption that the
transaction will take place in the asset's or the liability's principal
market, or in the absence of a principal market, in the most advantageous
market.
The fair value of an asset or a liability is measured using the assumptions
that market participants would use when pricing the asset or liability,
assuming that market participants act in their economic best interest.
Fair value measurement of a non-financial asset takes into account a market
participant's ability to generate economic benefits by using the asset in its
highest and best use or by selling it to another market participant that would
use the asset in its highest and best use.
The Group uses valuation techniques that are appropriate in the circumstances
and for which sufficient data are available to measure fair value, maximizing
the use of relevant observable inputs and minimizing the use of unobservable
inputs.
All assets and liabilities measured at fair value or for which fair value is
disclosed are categorized into levels within the fair value hierarchy based on
the lowest level input that is significant to the entire fair value
measurement:
Level 1 - quoted prices (unadjusted) in active markets for identical assets or
liabilities.
Level 2 - inputs other than quoted prices included within Level 1 that are observable
either directly or indirectly.
Level 3 - inputs that are not based on observable market data (valuation techniques
which use inputs that are not based on observable market data).
NOTE 2:- SIGNIFICANT ACCOUNTING POLICIES (Cont.)
o. Share-based payment transactions:
Equity-settled transactions:
The cost of equity-settled transactions with employees is measured by
reference to the fair value of the equity instruments at the date on which
they are granted. The fair value is determined using an acceptable option
model.
The cost of equity-settled transactions is recognized, together with a
corresponding increase in equity, over the period in which the performance
and/or service conditions are fulfilled, ending on the date on which the
relevant employees become fully entitled to the award ("the vesting date").
The cumulative expense recognized for equity-settled transactions at each
reporting date until the vesting date reflects the extent to which the vesting
period has expired and the Company's best estimate of the number of equity
instruments that will ultimately vest.
p. Taxes on income:
Current or deferred taxes are recognized in profit or loss, except to the
extent that they relate to items which are recognized in other comprehensive
income or equity.
1. Current taxes:
The current tax liability is measured using the tax rates and tax laws that
have been enacted or substantively enacted by the end of reporting period as
well as adjustments required in connection with the tax liability in respect
of previous years.
2. Deferred taxes:
Deferred taxes are computed in respect of temporary differences between the
carrying amounts in the financial statements and the amounts attributed for
tax purposes.
Deferred taxes are measured at the tax rate that is expected to apply when the
asset is realized or the liability is settled, based on tax laws that have
been enacted or substantively enacted by the reporting date.
Deferred tax assets are reviewed at each reporting date and reduced to the
extent that it is not probable that they will be utilized. Temporary
differences for which deferred tax assets had not been recognized are reviewed
at each reporting date and a respective deferred tax asset is recognized to
the extent that their utilization is probable.
NOTE 2:- SIGNIFICANT ACCOUNTING POLICIES (Cont.)
Taxes that would apply in the event of the disposal of investments in
investees have not been taken into account in computing deferred taxes, as
long as the disposal of the investments in investees is not probable in the
foreseeable future.
Also, deferred taxes that would apply in the event of distribution of earnings
by investees as dividends have not been taken into account in computing
deferred taxes, since the distribution of dividends does not involve an
additional tax liability or since it is the Company's policy not to initiate
distribution of dividends from a subsidiary that would trigger an additional
tax liability.
q. Significant accounting estimates and assumptions used in the
preparation of the financial statements:
The preparation of the financial statements requires management to make
estimates and assumptions that have an effect on the application of the
accounting policies and on the reported amounts of assets, liabilities,
revenues and expenses. Changes in accounting estimates are reported in the
period of the change in estimate.
r. Changes in accounting policies - initial application of new
financial reporting and accounting standards and amendments to existing
financial reporting and accounting standards:
Amendment to IAS 8, "Accounting Policies, Changes to Accounting Estimates and
Errors":
In February 2021, the IASB issued an amendment to IAS 8, "Accounting Policies,
Changes to Accounting Estimates and Errors" ("the Amendment"), in which it
introduces a new definition of "accounting estimates".
Accounting estimates are defined as "monetary amounts in financial statements
that are subject to measurement uncertainty". The Amendment clarifies the
distinction between changes in accounting estimates and changes in accounting
policies and the correction of errors.
The Amendment is applied prospectively for annual reporting periods beginning
on January 1, 2023 and is applicable to changes in accounting policies and
changes in accounting estimates that occur on or after the start of that
period.
The application of the Amendment did not have a material impact on the
Company's consolidated financial statements.
2. Amendment to IAS 1, "Disclosure of Accounting Policies":
In February 2021, the IASB issued an amendment to IAS 1, "Presentation of
Financial Statements" ("the Amendment"), which replaces the requirement to
disclose 'significant' accounting policies with a requirement to disclose
'material' accounting policies. One of the main reasons for the Amendment is
the absence of a definition of the term 'significant' in IFRS whereas the term
'material' is defined in several standards and particularly in IAS 1.
The Amendment is applicable for annual periods beginning on January 1, 2023.
The application of the above Amendment had an effect on the
disclosures of the Company's accounting policies, but did not affect the
measurement, recognition or presentation of any items in the Company's
consolidated financial statements.
NOTE 3:- DISCLOSURE OF NEW STANDARDS IN THE PERIOD PRIOR TO THEIR ADOPTION
a. Amendment to IAS 1, "Presentation of Financial Statements":
In January 2020, the IASB issued an amendment to IAS 1, "Presentation of
Financial Statements" regarding the criteria for determining the
classification of liabilities as current or non-current ("the Original
Amendment"). In October 2022, the IASB issued a subsequent amendment ("the
Subsequent Amendment").
According to the Subsequent Amendment:
· Only covenants with which an entity must comply on or before
the reporting date will affect a liability's classification as current or
non-current.
· An entity should provide disclosure when a liability arising
from a loan agreement is classified as non-current and the entity's right to
defer settlement is contingent on compliance with future covenants within
twelve months from the reporting date. This disclosure is required to include
information about the covenants and the related liabilities. The disclosures
must include information about the nature of the future covenants and when
compliance is applicable, as well as the carrying amount of the related
liabilities. The purpose of this information is to allow users to understand
the nature of the future covenants and to assess the risk that a liability
classified as non-current could become repayable within twelve months.
Furthermore, if facts and circumstances indicate that an entity may have
difficulty in complying with such covenants, those facts and circumstances
should be disclosed.
According to the Original Amendment, the conversion option of a liability
affects the classification of the entire liability as current or non-current
unless the conversion component is an equity instrument.
The Original Amendment and Subsequent Amendment are both effective for annual
periods beginning on or after 1 January 2024 and must be applied
retrospectively. Early application is permitted.
The Company is evaluating the possible impact of the Amendment on its current
loan agreements.
b. IFRS 18, "Presentation and Disclosure in Financial Statements":
In April 2024, the International Accounting Standards Board ("the IASB")
issued IFRS 18, "Presentation and Disclosure in Financial Statements" ("IFRS
18") which replaces IAS 1, "Presentation of Financial Statements".
IFRS 18 is aimed at improving comparability and transparency of communication
in financial statements.
IFRS 18 retains certain existing requirements of IAS 1 and introduces new
requirements on presentation within the statement of profit or loss, including
specified totals and subtotals. It also requires disclosure of
management-defined performance measures and
NOTE 3:- DISCLOSURE OF NEW STANDARDS IN THE PERIOD PRIOR TO THEIR ADOPTION
(Cont.)
includes new requirements for aggregation and disaggregation of financial
information.
IFRS 18 does not modify the recognition and measurement provisions of items in
the
financial statements. However, since items within the statement of profit or
loss must be classified into one of five categories (operating, investing,
financing, taxes on income and discontinued operations), it may change the
entity's operating profit. Moreover, the publication of IFRS 18 resulted in
consequential narrow scope amendments to other accounting standards, including
IAS 7, "Statement of Cash Flows", and IAS 34, "Interim Financial Reporting".
IFRS 18 is effective for annual reporting periods beginning on or after
January 1, 2027, and is to be applied retrospectively. Early adoption is
permitted but will need to be disclosed.
The Company is evaluating the effects of IFRS 18, including the effects of the
consequential amendments to other accounting standards, on its consolidated
financial statements.
NOTE 4:- INVENTORY
31 December
2023 2022
Euros in thousands
Raw cashew nuts 1,022 1,248
Spare parts, tools and materials 1,367 986
Kernel cashew nuts 300 350
Palm oil mill final products 291 334
Plants 57 240
3,037 3,158
NOTE 5:- OTHER ACCOUNTS RECEIVABLE
31 December
2023 2022
Euros in thousands
Advance payment to suppliers and prepaid expenses 885 904
Loans to employees 50 38
Government authorities (VAT) 6 5
Other receivables 76 3
1,017 950
NOTE 6:- INVESTMENT IN PEARLSIDE HOLDINGS LTD.
As described in Note 1c, Pearlside Holdings Ltd. ("Pearlside") is a subsidiary
of the Company. As of 1 January 2022, the Company had a 70.7% equity interest
in Pearlside.
On 30 December 2022, the Company signed an agreement to purchase the remaining
29.3% held by the non-controlling interests by way of issuing 19,968,701
Ordinary shares of the Company. Based on the market price of the Company's
shares on the date of the purchase, the total fair value of the shares amounts
to €714 thousand.
Following this acquisition, the Company holds 100% of Pearlside.
Concurrently, it was agreed that the loan in the amount of €915 thousand
provided by the non-controlling interests, would only be repaid from the
available cash flow from Pearlside, as to be determined in the sole discretion
of the board of directors of Pearlside. The Company believes that no
repayments of the loan will be made prior to 1 January 2025, and accordingly,
the loan has been classified as a non-current loan from a shareholder. As the
loan bears no interest, the fair value of the loan in the amount of €630
thousand was calculated based on the present value of estimated future
repayments discounted using the prevailing market rate of interest (7.75%) for
a similar type of loan.
NOTE 6:- INVESTMENT IN PEARLSIDE HOLDINGS LTD. (Cont.)
Of the total fair value of the shares issued in the amount of €714 thousand,
€285 thousand is attributed to the difference (discount) between the nominal
amount of the loan from the shareholder and the fair value of the loan. The
aggregation of remaining portion of the fair value (€429 thousand) and the
negative carrying amount (€176 thousand) of the non-controlling interests,
in the amount of €605 thousand, has been recorded as a charge to "capital
reserve from transactions with non-controlling interests" in equity.
NOTE 7:- PROPERTY AND EQUIPMENT, NET
Composition and movement:
Computers Equipment and Motor vehicles Agriculture equipment Extraction mill Palm oil plantations Cashew processing mill under construction and land Total
and peripheral equipment furniture and land
Euros in thousands
Cost:
Balance as of 1 January, 2022 369 559 2,126 490 26,528 7,632 15,212 52,916
Additions during the year 22 302 482 292 105 - 1,797 3,000
Disposals during the year - - (352) - (57) - - (409)
Balance as of 31 December, 2022 391 861 2,256 782 26,576 7,632 17,009 55,507
Additions during the year 18 - 245 - 48 1,386 225 1,952
Disposals during the year (68) (68)
Balance as of 31 December, 2023 409 861 2,433 782 26,624 9,018 17,264 57,391
Accumulated depreciation:
Balance as of 1 January 2022 208 114 1,033 435 5,430 1,804 - 9,024
Depreciation 55 88 281 68 737 320 5 1,554
Disposals during the year - - (306) - - - - (306)
Balance as of 31 December 2022 263 202 1,008 503 6,167 2,124 5 10,272
Depreciation 56 95 355 41 846 355 2,355 4,103
Disposals during the year (68) (68)
Balance as of 31 December 2023 319 297 1,295 544 7,013 2,479 2,360 14,307
Depreciated cost at 31 December 2023 90 564 1,138 238 19,611 6,539 14,904 43,084
Depreciated cost at 31 December 2022 128 659 1,249 278 20,409 5,508 17,004 45,235
Substantially all property and equipment are located in Coite d'Ivoire.
NOTE 8:- OTHER ACCOUNTS PAYABLE
31 December
2023 2022
Euros in thousands
Employees and payroll accruals 641 1,015
VAT payable 231 467
Other accounts payable and accrued expenses 2,579 2,370
3,451 3,852
NOTE 9:- RIGHT-OF-USE ASSETS AND LEASE LIABILITIES
On 24 June 2008, DekelOil CI SA signed a lease agreement for 42 hectares near
the village of Ayenouan, Cote d'Ivoire. The agreement is with the village of
Adao and the people occupying the land in Ayenouan. The lease is for 90 years
and the payment for the lease is FCFA 3,000,000 (app. €4,573) per annum.
A subsidiary signed a lease agreement with the government authorities for 6
hectares near the village of Tiabissuo, Cote d'Ivoire. The agreement is for a
lease of 99 years with an annual lease payment of 6 million FCFA (app.
€9,146)
The right-of-use assets in respect of the above leases are included in
Property and Equipment (Note 7). The balance of the lease liabilities at 31
December 2023 amounted to €128 (2022 - €128).
NOTE 10:- LOANS
a. Long-term loans:
Interest
31 December 31 December
Currency 2023 2023 2022
Euros in thousands
SOGEBOURSE (c.1) In FCFA 8.4% 931 2,750
SIB (c.2) In FCFA 6.85% - 124
AgDevCo (c.3) In Euro 7% 3,600 3,600
BGFI (c.4) In FCFA 7.5% 462 711
BIDC (c.5) In FCFA 7.25% 4,350 4,573
NSIA (c.6) In FCFA 8.5% 1,833 2,287
NSIA (c.7) In FCFA 7.75% 635 762
BGFI (c.8) In FCFA 7.75% 1,174 1,441
HUDSON (c.9) In FCFA 7.5% 15,138 15,138
Poalim (c.10) In NIS 4.2% 57 76
Mizrachi (c.10) In NIS 4.2% 50 72
Total loans 28,280 31,534
Less - current maturities (4,708) (4,293)
23,572 27,241
NOTE 10:- LOANS (Cont.)
b. Short-term loans and current maturities:
31 December
2023 2022
Euros in thousands
Bank credit line (c.11) 3,762 1,378
Current maturities - per a. above 4,708 4,293
8,470 5,671
c. 1. In September 2016 DekelOil CI SA signed a
long-term financing facility agreement with a consortium of institutional
investors arranged by SOGEBOURSE for a long-term loan of up to FCFA 10 billion
(approximately €15.2 million). Of this amount, FCFA 5.5 billion
(approximately €8.4 million) was utilized to refinance the West Africa
Development Bank ("BOAD") loan The loan is repayable over 7 years in fourteen
semi annual payments and bears interest at a rate of 6.85% per annum.
On 22 October 2016 SOGEBOURSE transferred the funds and the BOAD loan was
repaid in full.
On 1 February 2018 the DekelOil CI SA drew down a second tranche of FCFA 2.8
billion (€4.34 million) from its FCFA 10 billion (€15.2 million) long-term
Syndicated Loan Facility with Sogebourse CI. On the same terms as the first
tranche. Part of the funds were used to repay a short-term loan in the
amount of €1,524 thousand and a long-term loan in the amount of €497
thousand.
2. In October 2018 DekelOil CI SA signed a loan agreement with
Societe Ivorienne de Banque ("SIB") for FCFA 400 million (approximately €610
thousand). The loan is for 5 years and bears interest at a rate of 8.2% per
annum. One of the boilers in the CPO extraction mill serves as a security for
the loan. The loan was repaid in 2023.
3. In July 2019 DekelOil CI SA signed an agreement with AgDevCo
Limited ("AgDevCo"), a leading African agriculture sector impact investor for
a €7.2 million loan for a term of 10 years, 4 years of principal grace and 6
years of repayment, with a gross interest rate of 7.5% per annum, variable and
based on 12-month Euro Short Term Rate published by the European Central Bank
(which replaced the Euro Libor used previously) plus a pre-defined spread, and
collared with a minimum rate of 6% per annum and a maximum rate of 9% per
annum. In August 2022 DekelOil CI SA repaid €3.6 million out of the €7.2
million. Following this repayment, it was agreed that the interest will be
fixed at 7% per annum, and that the remaining loan will be paid in 4 equal
annual instalments starting in July 2024. It was also agreed that all
financial covenants were canceled. The fixed assets of DekelOil CI SA serves
as a security for this loan.
NOTE 10:- LOANS (Cont.)
4. On 7 July 2020 DekelOil CI SA signed a loan agreement with
Banque Gabonaise Francaise International ("BGFI") for FCFA 800 million
(approximately €1,220 thousand). The loan is for 5 years and bears interest
at a rate of 7.25% per annum.
5. On 16 March 2016 Capro CI SA signed a loan agreement with the
Bank of Investment and Development of CEDEAO ("EBID") according to which EBID
agreed to grant Capro CI SA a facility of 3,000 million FCFA (€4,573
thousand). During 2022 Capro CI SA made the last withdrawal under this loan
agreement of the amount of €520.
The EBID loan shall bear interest at a rate of 8.5% per annum. The loan has a
tenure of seven years and shall be repaid in 20 quarterly installments over
five years, commencing after a grace period on principal payments of two
years. Principal payments start in January 2022. According to the loan
agreement as a security for this loan there is a lien over the equipment of
Capro CI SA and an amount of €97 thousand has been deposited in a bank by
Capro CI SA (non-current bank deposits).
6. In 2018 Capro CI SA signed a loan agreement with NSIA bank,
Togo ("NSIA Togo") according to which NSIA Togo agreed to grant Capro CI SA a
facility of 1,500 million FCFA (€2,278 thousand).
NSIA Togo loan shall bear interest at a rate of 7.25%% per annum. The loan has
a tenure of seven years and shall be repaid in 20 quarterly installments over
five years, commencing after a grace period on principal payments of two years
from the first withdrawal made on 20 February 2020. As a security for this
loan there is a lien over the equipment of Capro CI SA and an amount of €49
thousand has been deposited in a bank by Capro CI SA (non-current bank
deposits).
7. On 30 March 2020 Capro CI SA signed a loan agreement with NSIA
bank Cote d'Ivoire ("NSIA") according to which NSIA agreed to grant Capro CI
SA a facility of 500 million FCFA (€762 thousand).
NSIA loan shall bear interest at a rate of 7.25% per annum. The loan is for
two years with one year grace period on principal payments. The loan was fully
repaid in 2022.
In August 2022 Capro CI SA signed a new loan agreement with NSIA for the same
amount. The loan will bear interest at a rate of 7.75%. The loan is for two
years with one year grace period on principal payments.
8. On 3 February 2020 Capro CI SA signed a loan agreement with
Banque Gabonaise Francaise International ("BGFI") for FCFA 1,000 million
(approximately €1,542 thousand). The loan shall bear interest at a rate of
7.5% per annum. The loan has a tenure of seven years and shall be repaid in
monthly installments over five years, commencing after a grace period on
principal payments of two years from the first withdrawal made in September
2020. According to the loan agreement as a security for this loan an amount of
€114 thousand has been deposited in a bank by Capro CI SA (non-current bank
deposits).
NOTE 10:- LOANS (Cont.)
9. On 25 January 2021 DekelOil CI SA signed an agreement with
Hudson for issuance of a long-term bond of up to 10,000 million FCFA )€15.2
million(. The first tranche of 3,930 million FCFA (€6 million) was received
on 27 January 2021, and the second tranche of 6 billion FCFA )€9.1 million)
was received on 24 July 2022. The bond is for 7 years with a 3-year grace for
principal repayments. The first tranche of the bond bears annual interest of
7.75% and the second tranche of the bond bears annual interest of 7.25%.
According to the agreement DekelOil CI SA accumulates the funds for each
payment prior to each payment by a monthly payment to be made for that purpose
to a designated deposit account. In addition, a fixed amount has been
deposited in a separate bank account. As of 31 December 2023, the current
deposit amounts to €661 thousand (2022 - €649 thousand) and the
non-current deposit amounts to €763 thousand (€588 thousand),
respectively.
10. In August and in October 2022 a subsidiary of the Company signed
two loan agreements for two vehicles in the amount of €148 thousand
(denominated in NIS). The loan is for 5 years with annual interest of 4.2%
which is linked to the prime interest rate in Israel.
11. The Company has a line of credit of €3.5 million from various
banks in Cote d'Ivoire. The lines of credit are revolving annually and bear an
annual interest rate of 7.75%.
NOTE 11:- EQUITY
a. Composition of share capital:
Authorized Issued and outstanding
31 December 31 December
2023 2022 2023 2022
Number of shares
Ordinary shares of €0.0003367 par value each 1,000,000,000 1,000,000,000 559,404,153 557,373,476
Each Ordinary share confers upon its holder voting rights, the right to
receive cash and share dividends, and the right to share in excess assets upon
liquidation of the Company.
Commencing from December 2019, pursuant to his remuneration contract, the
General Manager of the company's subsidiary, shall be issued 400,000 Ordinary
Shares per year at par value over the next 3 years, vesting on a monthly
basis. The fair value of the Ordinary shares to be issued at the date of grant
amounts to €34 thousand. As of 31 December 2023, all 1,200,000 Ordinary
shares were issued.
NOTE 11:- EQUITY (Cont.)
In 2022 the Company issued 645,037 ordinary shares to certain brokers and
suppliers in consideration for services provided and issued 496,169 ordinary
shares to a director as a remuneration for his services. The fair value of the
shares issued amounting to €44 thousand was recorded in general and
administrative expenses.
See Note 6 for details of issuance of 19,968,701 Ordinary shares valued at
€714 thousand (based on the market price of the shares) upon acquisition of
non-controlling interest in Pearlside.
In 2023 the Company issued 867,800 ordinary shares to certain brokers and
suppliers in consideration for services provided and issued 1,162,877 ordinary
shares to a director as a remuneration for his services. The fair value of the
shares issued amounting to €82 thousand was recorded in general and
administrative expenses.
b. Share option plan:
As of 31 December 2023 and 2022 there are 35,522,314 options outstanding to
purchase Ordinary shares at a weighted average exercise price of €0.033.
There are 5,866,667 options outstanding with a weighted average exercise price
of €0.023 that may only be exercised if at any point following the date of
grant, the 30-day Volume Weighted Average Price of the Ordinary Shares
achieves a price per share equal to or exceeding 6.0 pence. This condition has
not been met as of 31 December 2023.
Accordingly, as of 31 December 2023 and 2022 there are 29,655,647 options that
are exercisable at a weighted average exercise price of €0.035.
During 2023 and 2022, no options were granted, exercised, forfeited or
expired.
c. Capital reserve:
The capital reserve comprises the contribution to equity of the Company by the
controlling shareholders.
NOTE 12:- REVENUES
a. Substantially all the revenues are derived from the sales of
Palm Oil, Palm Kernel Oil and Palm Kernel Cake in Cote d'Ivoire, see also Note
19.
b. Major customers:
Year ended
31 December
2023 2022
Euros in thousands
Revenues from major customers which each account for 10% or more of total
revenues reported in the financial statements:
Customer A 15,170 9,403
Customer B 6,124 8,811
Customer C 5,515 -
Customer D 3,952 -
NOTE 13:- FAIR VALUE MEASUREMENT
The fair value of accounts and other receivables, loans, and trade and other
payables approximates their carrying amount due to their short-term
maturities. The fair value of long-term loans with a carrying amount of
€28,280 thousands and €31,534 thousands (including current maturities) as
of 31 December, 2023 and 2022, respectively, approximates their fair value
(level 3 of the fair value hierarchy).
NOTE 14:- INCOME TAXES
a. Tax rates applicable to the income of the Company and its
subsidiaries:
The Company and its subsidiaries, CS DekelOil Siva Ltd. and Pearlside Holdings
Ltd., were incorporated in Cyprus and are taxed according to Cyprus tax laws.
The statutory tax rate is 12.5%.
The carryforward losses (which may be carried forward indefinitely) of the
Company are approx. €43 thousand of CS DekelOil Siva Ltd. are approximately
€20 thousand, and of Pearlside are approximately €16 thousand.
The subsidiary, DekelOil CI SA, was incorporated in Cote d'Ivoire and is taxed
according to Cote d'Ivoire tax laws. Based on its investment plan, DekelOil CI
SA received a full tax exemption from local income tax, "Tax on Industrial and
Commercial profits," for the thirteen years starting 1 January 2014, 50% tax
exemption for the fourteenth year and 25% tax exemption for the fifteenth
year.
The tax exemptions were conditional upon meeting the terms of the investment
plan, which the Group has met.
NOTE 14:- INCOME TAXES (Cont.)
The subsidiary, Capro CI SA, was incorporated in Cote d'Ivoire and is taxed
according to Cote d'Ivoire tax laws. Based on its investment plan, Capro CI SA
received a full tax exemption from local income tax, "Tax on Industrial and
Commercial profits," for the thirteen years starting from commencement of
production, 50% tax exemption for the fourteenth year and 25% tax exemption
for the fifteenth year.
The tax exemptions were conditional upon meeting the terms of the investment
plan, which the Group has met.
The subsidiary DekelOil Consulting Ltd. was incorporated in Israel and is
taxed according to Israeli tax laws.
b. Tax assessments:
The Company's subsidiaries, DekelOil CI SA and Capro CI SA received a final
tax assessment through 2021.
As of 31 December 2023, the Company had not yet received final tax
assessments. For DekelOil Consulting Ltd. the tax assessment prior to 2015 is
deemed to be final.
c. The tax expense during the year ended 31 December, 2023,
relates to tax of the Company's subsidiaries DekelOil CI SA and DekelOil
Consulting Ltd.
NOTE 15:- SUPPLEMENTARY INFORMATION TO THE STATEMENT OF COMPREHENSIVE INCOME
Year ended
31 December
2023 2022
Euros in thousands
a. Cost of revenues:
Cost of fruit 25,454 19,072
Maintenance and other operating costs 3,594 3,092
Salaries and related benefits 2,326 1,788
Depreciation 3,947 1,304
Cultivation and nursery costs 510 717
Vehicles 408 212
36,239 26,185
NOTE 15:- SUPPLEMENTARY INFORMATION TO THE STATEMENT OF COMPREHENSIVE INCOME
(Cont.)
Year ended
31 December
2023 2022
Euros in thousands
b. General and administrative expenses:
Salaries and related benefits 2,044 1,741
Subcontractors 97 515
Legal, accounting, and professional fees 336 274
Depreciation 156 250
Office expenses 204 182
Travel expenses 153 167
Vehicle maintenance 160 148
Insurance 90 111
Brokerage and nominated advisor fees 69 56
Other 253 401
3,562 3,845
c. Finance cost:
Interest on loans 2,230 1,675(*)
Bank fees 645 638
Exchange rate differences 6 162
2,881 2,475
*) Net of interest capitalized of €434 thousand
NOTE 16:- INCOME (LOSS) PER SHARE
The following reflects the income (loss) and share data used in the basic and
diluted earnings per share computations:
Year ended
31 December
2023 2022
Euros in thousands
Net income (loss) attributable to equity holders of the Company (4,458) (833)
Weighted average number of Ordinary shares used for computation of:
Basic earnings (loss) per share 558,623,932 537,209,718
Diluted earnings (loss) per share 558,623,932 537,209,718
In 2023 and 2022, share options are excluded from the calculation of diluted
loss per share as their effect is antidilutive.
NOTE 17:- BALANCES AND TRANSACTIONS WITH RELATED PARTIES
a. Balances:
31 December
2023 2022
Euros in thousands
Current:
Other accounts payable 173 286
Non-current:
Loan from shareholder (see Note 6) 679 630
b. Compensation of key management personnel of the Company:
Year ended
31 December
2023 2022
Euros in thousands
Short-term employee benefits 933 820
c. Significant agreements with related parties:
1. In February 2008, DekelOil Consulting Limited ("Consulting")
signed an employment agreement with a shareholder, who is a director of the
Company, the CEO of the Company and the chairman of the Board of Directors of
DekelOil CI SA. Under the employment agreement, the CEO is entitled to a
monthly salary of €20,000 per month. The agreement is terminable by the
Company with 24 months' notice. The total annual salary, social benefits,
bonuses and management fee paid to the CEO during 2023 and 2022 was
approximately €249 thousand and €239 thousand, respectively.
2. In March 2008, DekelOil Consulting Limited signed an employment
agreement with a shareholder, who is a director of the Company, its Deputy CEO
and Chief Financial Officer. The agreement was amended on 11 July 2014, by the
board of the subsidiary to reflect the same salary terms as those of the CEO
described in c (1) above. The total annual salary and social benefits paid to
the employee during 2023 and 2022 was approximately €232 thousand and €239
thousand, respectively.
NOTE 18:- FINANCIAL INSTRUMENTS
a. Classification of financial liabilities:
The financial liabilities in the statement of financial position are
classified by groups of financial instruments pursuant to IFRS 9:
31 December
2023 2022
Euros in thousands
Financial liabilities measured at amortized cost:
Trade and other payables 2,795 5,211
Short-term loans 5,125 1,378
Long-term lease liabilities 128 128
Loan from shareholder 679 630
Long-term loans (including current maturities) 28,280 31,534
Total 37,007 38,881
b. Financial risks factors:
The Group's activities expose it to market risk (foreign exchange risk).
Foreign exchange risk:
The Company is exposed to foreign exchange risk resulting from the exposure to
different currencies, mainly, NIS and GBP. Since the FCFA is fixed to the
Euro, the Group is not exposed to foreign exchange risk in respect of the
FCFA. As of 31 December 2023, the foreign exchange risk is immaterial.
Liquidity risk:
The table below summarizes the maturity profile of the Group's financial
liabilities based on contractual undiscounted payments (including interest
payments):
31 December 2023
Less than one year 1 to 2 years 2 to 3 3 to 4 years 4 to 5 years > 5 Total
years years
Euros in thousands
Long-term loans (1) 5,956 7,189 8,863 6,784 4,639 2,342 35,773
Loan from shareholder 915 915
Short-term loan 5,125 5,125
Trade payables and other accounts payable 6,249 6,249
Long-term lease liabilities 15 15 15 15 15 1,344 1,419
17,342 7,204 8,878 6,799 4,654 4,601 48,479
NOTE 18:- FINANCIAL INSTRUMENTS (Cont.)
31 December 2022
Less than one year 1 to 2 years 2 to 3 3 to 4 years 4 to 5 years > 5 Total
years years
Euros in thousands
Long-term loans (1) 6,519 6,942 6,487 7,931 5,423 3,262 36,564
Loan from shareholder - - - - - 915 915
Short-term loan 1,378 - - - - - 1,378
Trade payables and other accounts payable 5,211 - - - - - 5,211
Long-term lease liabilities 44 44 44 44 34 1,350 1,559
13,152 6,986 6,531 7,975 5,457 5,527 45,627
Movement in financial liabilities:
Short term loans Long term loans (1) Lease liabilities Loan from non-controlling interest (2) Total
Euros in thousands
Balance as of 1 January 2021 3,040 26,943 169 915 31,067
Receipt of short-term loan 1,378 - - - 1,378
Receipt of long-term loan - 4,591 - - 4,591
Repayment of long-term lease - - (41) - (41)
Repayment of loans (3,040) - - - (3,040)
Loan discount (2) - - - (285) (285)
Balance as of 31 December 2022 1,378 31,534 128 630 33,670
Receipt of short-term loan 5,125 5,125
Receipt of long-term loan
Repayment of loans (1,378) (3,254) (4,632)
Loan discount (2) 49 49
Receipt of long-term loans
Balance as of 31 December 2023 5,125 28,280 128 679 34,212
(1) Including current maturities and accrued interest.
(2) Loan from shareholder, see Note 6.
NOTE 19:- OPERATING SEGMENTS
a. General:
The operating segments are identified based on information that is reviewed by
the Company's management to make decisions about resources to be allocated and
assess its performance. Accordingly, for management purposes, the Group is
organized into two operating segments based on the two business units the
Group has. The two business units are incorporated under two separate
subsidiaries of the Company, the CPO production unit is incorporated under CS
DekelOil Siva Ltd. and its subsidiary and the RCN processing plant in the
initial production phase is incorporated under Pearlside Holdings Ltd. and its
subsidiary (see Note 1).
Segment performance (segment income (loss)) and the segment assets and
liabilities are derived from the financial statements of each separate group
of entities as described above. Unallocated items are mainly the Group's
headquarter costs.
b. Reporting operating segments:
Crude Raw cashew nut Unallocated Total
palm oil
Euros in thousands
Year ended 31 December 2023:
Revenues-external customers 37,220 1,079 38,299
Segment operating profit (loss) 3,741 (4,207) (1,036) (1,502)
Finance cost (1,976) (884) (21) (2,878)
Profit (loss) before taxes on income 1,765 (5,091) (1,057) (4,383)
Depreciation and amortization 1,566 2,508 29 4,103
NOTE 19:- OPERATING SEGMENTS (Cont.)
Crude Raw cashew nut Unallocated Total
palm oil
Euros in thousands
Year ended 31 December 2022:
Revenues-external customers 30,459 746 - 31,205
Segment operating profit (loss) 3,727 (1,430) (1,122) 1,175
Finance cost (2,182) (265) (28) (2,475)
Other income 103 - - 103
Profit (loss) before taxes on income 1,648 (1,695) (1,150) (1,197)
Depreciation and amortization 1,383 146 25 1,554
Crude Raw cashew nut Unallocated Total
palm oil
Euros in thousands
As of 31 December 2023:
Segment assets 34,815 15,616 185 50,616
Segment liabilities 28,665 10,568 433 39,666
As of 31 December 2022:
Segment assets 36,055 18,291 334 54,680
Segment liabilities 28,935 10,927 492 39,354
NOTE 20:- EVENTS AFTER THE REPORTING DATE
1. As described in Note 10, a subsidiary of the Company has an outstanding
loan in the amount of €3.6 million from AgDevCo. In June 2024 AgDevCo
agreed to postpone the first principal installment of €900 thousand due in
August 2024 by one year, such that the first principal installment will be
repayable over 6 months from September 2025. The remaining principal
installments will continue as per the loan agreement. Interest will increase
from 7% to 9% per annum of the outstanding balance from August 2024.
Proceeds of any IPO of the subsidiary or group restructuring will be partly
used to reduce the AgDevCo loan to a maximum of €1.8 million. The interest
rate will step down back to 7% if the loan balance is reduced to €1.8
million by 9 July 2025.
2. In June 2024, a principal shareholder of the Company has provided a loan to
the Company in the amount of €2.3 million. The loan bears interest at an
annual rate of 10%. The principal and accrued interest are repayable in two
years from the date of receipt of the loan. The loan may be prepaid, in whole
or in part, at any time at the sole discretion of the Company.
In addition, the shareholder has agreed to provide a loan facility in the
amount of €900 thousand which will be available from 1 December 2024. The
terms of the loan facility are identical to those of the loan discussed above.
This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact
rns@lseg.com (mailto:rns@lseg.com)
or visit
www.rns.com (http://www.rns.com/)
.
RNS may use your IP address to confirm compliance with the terms and conditions, to analyse how you engage with the information contained in this communication, and to share such analysis on an anonymised basis with others as part of our commercial services. For further information about how RNS and the London Stock Exchange use the personal data you provide us, please see our
Privacy Policy (https://www.lseg.com/privacy-and-cookie-policy)
. END FR BLGDLDDDDGSIRecent news on Dekel Agri-Vision
See all newsREG - Dekel Agri-Vision - Q1 2025 Palm Oil and Cashew Production Update
AnnouncementREG - Dekel Agri-Vision - Holding(s) in Company
AnnouncementREG - AIM - AIM Notice - 12/03/2025
AnnouncementREG - Dekel Agri-Vision - February Palm Oil & Cashew Operation Update & TVR
AnnouncementREG - Dekel Agri-Vision - January Palm Oil & Cashew Operation Update
Announcement