REG - Dekel Agri-Vision - 2023 Interim Results
28/09/2023 07:00
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RNS Number : 8971N Dekel Agri-Vision PLC 28 September 2023
28 September 2023
Dekel Agri-Vision Plc / Index: AIM / Epic: DKL / Sector: Food Producers
Dekel Agri-Vision Plc
('Dekel', the 'Company' or the 'Group')
2023 Interim Results and Investor Presentation
Dekel Agri-Vision Plc (AIM: DKL), the West African agribusiness company
focused on building a portfolio of sustainable and diversified projects, is
pleased is to announce its unaudited interim results for the six months ended
30 June 2023.
The Company will be hosting an investor presentation in the form of a Q&A
session at 12.30 p.m. UK time on 11 October 2023. The call will be hosted by
Lincoln Moore (Executive Director), Youval Rasin (CEO) and Shai Kol (Deputy
CEO and CFO), who will discuss the interim results and provide an update on
activity across its portfolio of projects. Further information about the call
can be found at the end of this announcement.
Key Highlights
Palm Oil Operation
· H1 2022 revenue of €20.7m, a 5.1% increase from €19.7m in H1
2022 - includes sales of CPO, Palm Kernel Oil ('PKO'), Palm Kernel Cake
('PKC') and Nursery Plants
· We achieved a 49% increase in H1 2023 CPO production compared to
H1 2022, however, the H1 2022 gross margin - €3.5m, EBITDA - €2.3m and net
profit after tax €1.2m were below H1 2022 comparisons due to the timing
difference of a high volume of sales occurring post H1 2023 due to the late
and strong production high season:
o H1 2023 CPO inventory of 4,870 tonnes compared to 650 tonnes at H1 2022
o H1 2023 PKO inventory of 1,080 tonnes compared to 300 tonnes at H2 2022
· H1 2023 stock on hand has been sold in H2 2023 and whilst CPO and
PKO prices traded lower than the record prices in 2022, our current sales
prices remain historically strong and together with continued strong
production H2 2023 is currently tracking significantly ahead of H2 2022.
Cashew Operation
· The Cashew Operation commenced commercial operations in H1 2023
recording first revenue of €0.6m and a loss after tax of €1.1m. The loss
is due to daily production volumes achieved being below operational capacity
during the ramp-up phase of the operation.
· The Cashew Operation production volumes continue to gradually
improve in H2 2023 which should drive improvement in financial outcomes.
· The other main value drivers of the Cashew Operation including
the price of Raw Cashew Nut ('RCN'), the Cashew extraction rate and sales
prices are delivering in line with expectations.
Financial Highlights
Six months ended 30 June H1 2023 H1 2022
Palm Oil Operation
Revenue €20.7m €19.7m
Gross Margin €3.8m €5.0m
Gross Margin % 17.4% 25.4%
EBITDA €3.3m €4.2m
Net profit / (loss) after tax €1.5m €2.5m
Cashew Operation
Revenue €0.6m nil
Gross Margin (€0.4m) n/a
EBITDA (€0.8m) n/a
Net profit/ (loss) after tax (€1.1m) (€0.2m)
Dekel Group
Revenue €21.3m €19.7m
EBITDA €2.5m €4.0m
Dekel Group Net profit / (loss) after tax €0.4m €2.3m
Operational Highlights - Palm Oil Operation
· The Palm Oil Operation experienced a significantly stronger high
season compared to H1 2022 with Fresh Fruit Bunch ('FFB') volumes and Crude
Palm Oil ('CPO') production increasing 52.1% and 49.0% respectively compared
to H1 2022.
· CPO sales quantities increased 22.4% in H1 2023 compared to last
year. Given the high season arrived much later than normal our CPO stock
levels at the end of H1 2023 are much higher than typical at over 4,800tn.
· The H1 2023 average CPO sales price achieved was historically
strong at €934 per tonne, albeit 7.8% below the record H1 2022 CPO sales
price.
· The CPO extraction rate for H1 2023 of 21.9% was slightly lower
than H2 2022 but remains well in line with expectations.
H1-2023 H1-2022 Change
FFB processed (tonnes) 114,745 75,448 52.1%
CPO Extraction Rate 21.9% 22.4% -2.2%
CPO production (tonnes) 25,166 16,893 49.0%
CPO Sales (tonnes) 20,758 16,966 22.4%
Average CPO price per tonne €934 €1,013 -7.8%
Palm Kernel Oil ('PKO') production (tonnes) 1,442 1,162 24.1%
PKO Sales (tonnes) 515 1,180 -56.3%
Average PKO price per tonne €947 €1,454 -34.9%
Operational Highlights - Cashew Operation
· The Cashew Operation achieved a number of key milestones during
H1 2023 including, increasing ownership to 100%, commencing commercial
operations, first operational sales and post period end completing the BRC
global food standard assessment.
· The ramp up of daily production whilst slower than expected, is
continually increasing which should be reflected in the upcoming Q3 2023
production volumes.
· All other key elements of the value chain from raw material
purchasing to sales prices with the exception of daily production volumes are
in line with expectations.
H1-2023
RCN Inventory
Opening RCN Inventory (tonnes) 1,841
RCN Purchased (tonnes) 1,378
RCN Processed (tonnes) 759
Closing RCN Inventory (tonnes) 2,460
Cashew Processing
Opening Cashews (tonnes) 111
RCN Processed (tonnes) 759
Cashew Extraction Rate 23.3%
Cashew Produced (tonnes) 177
Cashew Sales (tonnes) 170
Closing Cashews (tonnes) 118
Average Sales prices per tonne
- Unpeeled Cashews €3,500
- Peeled Cashews €4,500
Lincoln Moore, Dekel's Executive Director, said: "The Palm Oil Operation is
experiencing potentially its best year in terms of both relatively strong
production volumes and sales price which sets up a strong full year financial
performance. The Cashew Operation has significant upside as daily production
volumes continue to increase since transitioning to commercial production in
early 2023 and we look forward to seeing the benefits of both operations
working well in tandem as 2023 progresses".
Conference Call
The Company is pleased to announce that Youval Rasin CEO, Shai Kol CFO and
Lincoln Moore Executive Director will provide a live Investor
Presentation via Investor Meet Company on 11th Oct 2023 at 12:30pm BST.
The presentation is open to all existing and potential shareholders. Questions
can be submitted pre-event via your Investor Meet Company dashboard up until
9am the day before the meeting or at any time during the live presentation.
Investors can sign up to Investor Meet Company for free and add to meet DEKEL
AGRI-VISION PLC via:
https://www.investormeetcompany.com/dekel-agri-vision-plc/register-investor
(https://www.investormeetcompany.com/dekel-agri-vision-plc/register-investor)
Investors who already follow DEKEL AGRI-VISION PLC on the Investor Meet
Company platform will automatically be invited.
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.
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 in 2023.
CHAIRMAN'S STATEMENT
Palm Oil Operation
Although the production high season commenced later than typical, we saw an
excellent period of production from March to June 2023 which culminated in an
increase in CPO production of 49% in H1 2023 compared to H1 2022. The period
of relatively high CPO production has continued into H2 where in September
2023 we expect to record our 8(th) consecutive month of higher like for like
production compared to 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 H1 2023 also increased 22.4% compared to H1 2022 although the
strong and late timing of the high season meant we held over 4,000tn of
additional CPO stock at the end of H1 2023. This stock has been sold
subsequent to half year end and we are tracking to achieve annual CPO
production and sales volumes close to record levels in 2023.
International CPO and PKO sales prices traded well above historically
averages, albeit lower than the record levels achieved in 2022. International
CPO prices currently sit at around €875-900 per tonne and whilst we have
seen some recent pressure on our local CPO prices largely due to high
inventory levels resulting from the late strong high season, CPO prices
currently remain very supporting for our Palm Oil Operation.
The combined balance of relatively strong CPO production and relatively high
CPO prices positions the Palm Oil Operation very well to exceed our record
2021 results.
Cashew Operation
The Cashew Operation achieved a number of key milestones during H1 2023
including commencing commercial operations, first operational sales and post
period end completing the BRC global food standard assessment. All other key
elements of the value chain from raw material purchasing to sales prices with
the exception of daily production volumes are in line with expectations. The
ramp up of daily production has been slower than we would like due to teething
problems particularly in the shelling and peeling machinery. We are however
seeing gradual improvement which should be reflected in the upcoming Q3 2023
production volumes data and we are hopeful to see a move towards operational
profitability in Q4 2023.
As previously stated, the Cashew Operation is integral to our short and medium
term growth plans. It has a nameplate capacity of 15,000 tonnes per annum
('tpa'), production at the plant can be ramped up by 50% at no extra cost by
simply increasing the number of shifts from two to three per day. From
15,000tpa and at a capex cost of €5-6 million, the mill's capacity can be
doubled to 30,000tpa, which the Directors estimate could generate revenues in
the region of approximately €35 million per annum based on current prices.
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
A summary of the financial performance for H1 2023, in addition to the
comparatives for the previous 5 years, is outlined in the table below.
H1 2023 H1 2022 H1 2021 H1 2020 H1 2019 H1 2018
CPO production (tonnes) 25,166 16,893 26,515 23,882 28,934 22,242
Average CPO price per tonne €934 €1,013 €817 €602 €505 €549
Total Revenue (all products) €21.3m €19.7m €21.7m €15.4m €14.6m €14.1m
Gross Margin €3.4m €5.0m €4.9m €2.6m €2.3m €2.1m
Gross Margin % 15.5% 25.4% 22.6% 16.9% 15.8% 14.9%
Overheads (€1.8m) (€1.7m) (€1.7m) (€1.4m) (€1.5m) (€1.6m)
EBITDA €2.5m €4.0m €3.9m €1.9m €1.4m €1.1m
Net Profit / (Loss) After Tax €0.4m €2.3m €2.0m €0.5m (€0.1m) (€0.5m)
Dekel achieved H1 2023 EBITDA of €2.2m and net profit after tax of €0.4m
compared to €4m EBITDA and €2.3m net profit after tax in H1 2022. This
result was driven by:
· A decrease in the H1 2023 Palm Oil Operation EBITDA was largely
due to timing differences associated with the sale of significant quantities
of H1 2023 CPO and PKO production taking place after H1 2023 period end.
Conversely the significant increase in sales volumes in H2 2023 should set up
a strong H2 2023 compared to H2 2022.
· A decrease in CPO and PKO selling prices in H1 2023 compared to
record prices in achieved in H1 2022 as well as a small decrease in the CPO
extraction rate.
· The commercial commencement of the Cashew Operation in 2023
meaning previous costs which were capitalised pre commercial production being
recorded as operational costs resulting in an increase in the Net loss.
Outlook
In the past, we have seen the Palm Oil operation have periods of strong
pricing and weak volumes or vice versa. 2023 is arguably the best year we
have seen in terms of both relatively strong volumes and pricing which sets us
up for a strong financial performance. The Cashew Operation has significant
upside as daily production volumes continue to improve and we look forward to
seeing the benefits of both operations working well in tandem as quickly as
possible.
I would like to thank the Board, Management, our employees and advisers for
their support and hard work over the course of the year.
Andrew Tillery
Non-Executive
Chairman
Date: 27 September 2023
CONSOLIDATED STATEMENTS OF FINANCIAL POSITION
30 June 31 December
2023 2022
Unaudited Audited
Euros in thousands
ASSETS
CURRENT ASSETS:
Cash and cash equivalents 212 2,240
Trade receivables 881 1,568
Inventories 6,556 3,158
Deposits in banks 898 679
Accounts and other receivables 1,593 950
Total current assets 10,140 8,595
NON-CURRENT ASSETS:
Deposits in banks 878 850
Property and equipment, net 46,140 45,235
Total non-current assets 47,018 46,085
Total assets 57,158 54,680
The accompanying notes are an integral part of the consolidated financial
statements.
CONSOLIDATED STATEMENTS OF FINANCIAL POSITION
30 June 31 December
2023 2022
Unaudited Audited
Euros in thousands
LIABILITIES AND EQUITY
CURRENT LIABILITIES:
Short-term loans and current maturities of long-term loans 5,098 5,671
Trade payables 3,676 1,359
Advance payments from customers 704 346
Other accounts payable and accrued expenses 4,626 3,852
Total current liabilities 14,104 11,228
NON-CURRENT LIABILITIES:
Long-term lease liabilities 128 128
Accrued severance pay, net 122 127
Loan from shareholder 654 630
Long-term loans 26,448 27,241
Total non-current liabilities 27,352 28,126
Total liabilities 41,456 39,354
EQUITY ATTRIBUTABLE TO EQUITY HOLDERS OF THE COMPANY
Share capital 177 177
Additional paid-in capital 40,736 40,736
Accumulated deficit (18,428) (18,804)
Capital reserve 2,532 2,532
Capital reserve from transactions with non-controlling interests (9,315) (9,315)
15,702 15,326
Total equity 15,702 15,326
Total liabilities and equity 57,158 54,680
The accompanying notes are an integral part of the interim consolidated
financial statements.
,
27 Sept 2023
Date of approval of the financial statements Youval Rasin Yehoshua Shai Kol Director and Chief Finance Officer Lincoln John Moore Executive Director
Director and Chief Executive Officer
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
Six months ended Year ended
30 June 31 December
2023 2022 2022
Unaudited Audited
Euros in thousands
(except per share amounts)
Revenues 21,332 19,661 31,205
Cost of revenues 17,887 14,651 26,185
Gross profit 3,445 5,010 5,020
General and administrative 1,847 1,650 3,845
Operating profit 1,598 3,360 1,175
Other income - - 103
Finance cost 1,185 881 2,475
Income (loss) before taxes on income 413 2,479 (1,197)
Taxes on income 37 196 141
Net income (loss) and total comprehensive income (loss) 376 2,283 (1,338)
Attributed to:
Equity holders of the Company 376 2,338 (833)
Non-controlling interest - (55) (505)
376 2,283 (1,338)
Income per share attributable to equity holders of the Company (in Euros):
Basic and diluted income per share 0.00 0.00 0.00
The accompanying notes are an integral part of the interim consolidated
financial statements.
CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY
Attributable to equity holders of the Company
Share Additional paid-in capital Accumulated deficit Capital reserve Capital reserve from transactions with non-controlling interests Total Total
capital equity
Euros in thousands
Balance as of 1 January 2023 (audited) 177 40,736 (18,804) 2,532 (9,315) 15,326 15,326
Net income and total comprehensive income - - 376 - - 376 376
Balance as of 30 June 2023 (unaudited) 177 40,736 (18,428) 2,532 (9,315) 15,702 15,702
Attributable to equity holders of the Company
Share Additional paid-in capital Accumulated deficit Capital reserve Capital reserve from transactions with non-controlling interests Total Non - controlling interest Total
capital equity
Euros in thousands
Balance as of 1 January 2022 (audited) 170 39,985 (17,971) 2,532 (8,710) 16,006 329 16,335
Net income and total comprehensive income - - 2,338 - - 2,338 (55) 2,283
Issuance of shares - *) 49 - - - 49 - 49
Balance as of 30 June 2022 (unaudited) 170 40,034 (15,633) 2,532 (8,710) 18,393 274 18,667
The accompanying notes are an integral part of the interim consolidated
financial statements.
CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY
Attributable to equity holders of the Company
Share Additional paid-in capital Accumulated deficit Capital reserve Capital reserve from transactions with non-controlling interests Total Non - controlling interest Total
capital equity
Euros in thousands
Balance as of 1 January 2022 (audited) 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 - 49 - - - 49 - 49
Issue of shares upon acquisition of non-controlling interests 7 702 - - (605) 104 176 280
Balance as of 31 December 2022 (audited) 177 40,736 (18,804) 2,532 (9,315) 15,326 - 15,326
The accompanying notes are an integral part of the interim consolidated
financial statements.
CONSOLIDATED STATEMENTS OF CASH FLOWS
Six months ended Year ended
30 June 31 December
2023 2022 2022
Unaudited Audited
Euros in thousands
Cash flows from operating activities:
Net income (loss) 376 2,283 (1,338)
Adjustments to reconcile net income(loss) to net cash provided by operating
activities:
Adjustments to the profit or loss items:
Depreciation 873 679 1,554
Finance expense, net 1,178 898 1,421
Change in employee benefit liabilities, net (5) 44 (8)
Gain from sale of property and equipment - - (103)
Changes in asset and liability items:
Decrease (increase) in inventories (3,398) (130) 82
Decrease (increase) in trade receivables 687
Decrease (increase) in accounts and other receivables (606) 1,628 (531)
Decrease in bank deposit - 222 -
Increase (decrease) in trade payables 2,317 (567) 28
Increase in advance from customers 358 726 238
Increase (decrease) in accrued expenses and other accounts payable 774 (72) 1,206
2,178 3,428 3,887
Cash paid during the period for:
Income taxes (37) - (135)
Interest (1,174) (898) (1,848)
(1,211) (898) (1,983)
Net cash provided by operating activities 1,343 4,813 566
The accompanying notes are an integral part of the interim consolidated
financial statements.
CONSOLIDATED STATEMENTS OF CASH FLOWS
Six months ended Year ended
30 June 31 December
2023 2022 2022
Unaudited Audited
Euros in thousands
Cash flows from investing activities:
Increase in deposits (227) - (433)
Sale of property and equipment - - 206
Purchase of property and equipment (1,778) (2,573) (2,566)
Net cash used in investing activities (2,005) (2,573) (2,793)
Cash flows from financing activities:
Long-term lease - (130) (41)
Receipt (payment) of short-term loans, net 399 (2,279) (1,668)
Receipt of long-term loans - 520 10,577
Repayment of long-term loans (1,765) (1,218) (5,995)
Net cash provided by (used in) financing activities (1,366) (3,107) 2,873
Increase (decrease) in cash and cash equivalents (2,028) (867) 645
Cash and cash equivalents at beginning of period 2,240 1,595 1,595
Cash and cash equivalents at end of period 212 756 2,240
Supplemental disclosure of non-cash activities:
Issuance of shares in consideration for investment in Pearlside - 403 714
The accompanying notes are an integral part of the interim consolidated
financial statements.
NOTE 1:- GENERAL
a. These financial statements have been prepared in a condensed
format as of 30 June 2023, and for the six months then ended ("interim
consolidated financial statements"). These financial statements should be read
in conjunction with the Company's annual financial statements as of 31
December 2022 and for the year then ended and accompanying notes ("annual
consolidated financial statements").
b. 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.
c. 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.
d. Pearlside Holdings Ltd. ("Pearlside") a company incorporated in
Cyprus, is a wholly-owned subsidiary of the Company. 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 Tiebissou.
e. DekelOil Consulting Ltd. a company located in Israel and a
wholly-owned subsidiary of DekelOil Siva and is engaged in providing services
to the Company and its subsidiaries.
NOTE 1:- GENERAL (Cont.)
f. Cash flow from operations and working capital deficiency.
As of 30 June 2023, the Group has a working capital
deficiency of €4 million (€2.6 million as of 31 December 2022). The Palm
Oil operation is performing well in 2023 recording operating profit of €2.8
million (including depreciation of €0.8 millions) for the 6 months ending 30
June 2023 (see also note 3 operating segments). When combined with record
inventory levels of CPO and PKO on 30 June 2023 due to the strong late palm
oil high season, Palm Oil operation is expected to generate close to record
operating profit and generate material operating cash flows for the full year
ending 31 December 2023. In addition, the Cashew Operation is gradually
increasing daily production and is forecast to deliver positive operating cash
flows in the coming months. The Group has prepared detailed forecasted cash
flows through the end of 2024, which indicate that the Group should have
positive cash flows from its Group operations. However, the operations of the
Group are subject to various market conditions, including quantity and quality
of fruit harvests and market prices that are not under the Group's control
that could have an adverse effect on the Group's future cash flows.
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
a. Basis of preparation of the interim consolidated financial
statements:
The interim consolidated financial statements have been prepared in accordance
with IAS 34, "Interim Financial Reporting".
The significant accounting policies applied in the preparation of the interim
consolidated financial statements are consistent with those followed in the
preparation of the annual consolidated financial statements for the year ended
31 December 2022, except as described in c. below.
b. Fair value of financial instruments:
The carrying amounts of the Company's financial instruments approximate their
fair value.
NOTE 2:- SIGNIFICANT ACCOUNTING POLICIES (Cont.)
c. Initial adoption of amendments to existing financial reporting
and accounting standards:
1. 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 to be applied prospectively for annual reporting periods
beginning on or after 1 January 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 interim financial statements.
2. Amendment to IAS 12, "Income Taxes":
In May 2021, the IASB issued an amendment to IAS 12, "Income Taxes" ("IAS
12"), which narrows the scope of the initial recognition exception under IAS
12.15 and IAS 12.24 ("the Amendment").
According to the recognition guidelines of deferred tax assets and
liabilities, IAS 12 excludes recognition of deferred tax assets and
liabilities in respect of certain temporary differences arising from the
initial recognition of certain transactions. This exception is referred to as
the "initial recognition exception". The Amendment narrows the scope of the
initial recognition exception and clarifies that it does not apply to the
recognition of deferred tax assets and liabilities arising from transactions
that are not a business combination and that give rise to equal taxable and
deductible temporary differences, even if they meet the other criteria of the
initial recognition exception.
The Amendment is effective for annual reporting periods beginning on or after
1 January 2023. In relation to leases and decommissioning obligations, the
Amendment is applied commencing from the earliest reporting period presented
in the financial statements in which the Amendment is initially applied. The
cumulative effect of the initial application of the Amendment is recognized as
an adjustment to the opening balance of retained earnings (or another
component of equity, as appropriate) at that date.
The application of the Amendment did not have a material impact on the
Company's interim financial statements.
NOTE 2:- SIGNIFICANT ACCOUNTING POLICIES (Cont.)
3. 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 effective for annual periods beginning on or after 1 January
2023.
The above Amendment did not have an effect on the Company's
interim consolidated financial statements. However, the Company is evaluating
whether the Amendment will affect the disclosures of accounting policies in
the Company's annual consolidated financial statements.
NOTE 3:- 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 commissioning stage is incorporated under Pearlside
Holdings Ltd and its subsidiary.
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 .
NOTE 3:- OPERATING SEGMENTS (Cont.)
b. Reporting operating segments:
Crude Palm Oil Raw Cashew Nut Unallocated Total
Euros in thousands
Six months ended 30 June 2023 (unaudited):
Revenues-External customers 20,718 614 - 21,332
Segment operating profit (loss) 2,801 (666) (537) 1,598
Finance cost (1,038) (118) (29) (1,185)
Profit (loss) before taxes on income 1,763 (784) (566) 413
Depreciation 774 88 11 873
Crude Palm Oil Raw Cashew Nut Unallocated Total
Euros in thousands
Six months ended 30 June 2022 (unaudited):
Revenues-External customers 19,661 - - 19,661
Segment profit (loss) 3,742 (188) (195) 3,359
Finance cost (833) (47) - (880)
Profit before taxes on income 2,909 (235) (195) 2,479
Depreciation (679) - - (679)
Crude Palm Oil Raw Cashew Nut Unallocated Total
Euros in thousands
Year ended 31 December 2022 (audited):
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 1,383 146 25 1,554
NOTE 3:- OPERATING SEGMENTS (Cont.)
Crude Palm Oil Raw Cashew Nut Total
Euros in thousands
As of 30 June 2023 (unaudited):
Segment assets 38,182 18,976 57,158
Segment liabilities 31,281 10,175 41,456
As of 31 December 2022 (audited):
Segment assets 36,389 18,291 54,680
Segment liabilities 28,427 10,927 39,354
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