REG - Dekel Agri-Vision - 2024 Interim Results
25/09/2024 07:00
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RNS Number : 4514F Dekel Agri-Vision PLC 25 September 2024
25 September 2024
Dekel Agri-Vision Plc / Index: AIM / Epic: DKL / Sector: Food Producers
Dekel Agri-Vision Plc
('Dekel', the 'Company' or the 'Group')
2024 Interim Results
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 2024.
Financial Highlights
Palm Oil Operation
· 10.1% decrease in H1 2024 revenues to €18.6m (H1 2023: €20.7m)
due to the 17.6% decrease in Crude Palm Oil ('CPO') sales prices more than
offsetting the 7.7% increase in CPO sales volumes - includes sale of CPO, Palm
Kernel Oil ('PKO'), Palm Kernel Cake ('PKC') and Nursery Plants.
· 11.5% increase in H1 2024 gross margin percentage compared to H1
2023 primarily due to lower Fresh Fruit Bunches ('FFB') costs more than
offsetting the lower CPO sales prices. In addition, we reported a 158.8%
increase in Palm Kernel Oil ('PKO') volumes in H1 2024 compared to H1 2023.
· 12.1% increase in EBITDA to €3.7m (2023: €3.3m) due to
continued prudent cost control during an inflationary environment.
Cashew Operation
· H1 2024 revenues remained unchanged at €0.6m. The unchanged
revenue was due to previously reported issues in the peeling and shelling
sections which should be rectified over the next 6-8 weeks.
· H1 2024 EBITDA loss of €0.9m compared to an EBITDA loss of
€0.8m.
Six months ended 30 June H1 2024 H1 2023 % Change
Palm Oil Operation
Revenue €18.6m €20.7m -10.1%
Gross Margin €3.8m €3.8m Nil
Gross Margin % 20.4% 18.3% 11.5%
EBITDA €3.7m €3.3m 12.1%
Cashew Operation
Revenue €0.6m €0.6m Nil
EBITDA (€0.9m) (€0.8m) -12.5%
Dekel Group
Revenue €19.2m €21.3m -9.9%
EBITDA €2.8m €2.5m 12.0%
Operational Highlights - Palm Oil Operation
· The Palm Oil Operation experienced a consistent high season albeit
slightly below the relatively strong H1 2023 results with Fresh Fruit Bunch
('FFB') volumes and Crude Palm Oil ('CPO') production decreasing marginally by
8.1% and 7.7% respectively compared to H1 2023.
· CPO sales quantities increased 7.7% in H1 2024 compared to last
year. This is largely due to last year's high season arriving much later
than normal, leading to high CPO stock levels at the end of H1 2023.
· The H1 2024 average CPO sales price achieved was historically
strong at €770 per tonne, albeit 17.6% below H1 2023 CPO sales price.
International prices continue to remain steady at approximately €900 per
tonne and we continue to see local CPO prices gradually increase towards the
international price with June 2023 prices achieved of €773 per tonne.
· The CPO extraction rate for H1 2024 of 22.0% was slightly higher
than H1 2023.
H1-2024 H1-2023 % Change
FFB processed (tonnes) 105,444 114,745 -8.1%
CPO Extraction Rate 22.0% 21.9% 0.5%
CPO production (tonnes) 23,236 25,166 -7.7%
CPO Sales (tonnes) 22,360 20,758 7.7%
Average CPO price per tonne €770 €934 -17.6%
Palm Kernel Oil ('PKO') production (tonnes) 1,367 1,442 -5.2%
PKO Sales (tonnes) 1,333 515 158.8%
Average PKO price per tonne €803 €947 -15.2%
Cashew Operation Update
· The Cashew Operation operated on a conservative basis during H1
2024 while we awaited the arrival and commissioning of new off the shelf
shelling and peeling equipment.
· All new shelling and peeling equipment was ordered in January 2024.
Shipments related to shelling machinery arrived in late July and the items
related to the peeling section arrived on site yesterday.
· Commissioning of new equipment is underway and being overseen by a
highly credentialled cashew processing consultant and we expect to see
production volume materially increase over the next 6-8 weeks.
· Whole cashew sales prices have increased since the end of H1 2024
which should be reflected in our Q3 production and sales update which will be
reported on or around 10 October 2024.
H1-2024 H1-2023
RCN Inventory
Opening RCN Inventory (tonnes) 1,751 1,841
RCN Purchased (tonnes) 419 1,378
RCN Processed (tonnes) 588 759
Closing RCN Inventory (tonnes) 1,582 2,460
Cashew Processing
Opening Cashews (tonnes) 154* 111
RCN Processed (tonnes) 588 759
Cashew Extraction Rate 19.6% 23.3%
Cashew Produced (tonnes) 115 177
Cashew Sales (tonnes) 215 170
Closing Cashews (tonnes) 54 118
Average Sales prices per tonne
- Whole Unpeeled Cashews €3,300 €3,500
- Whole Peeled Cashews €4,250 €4,400
- Mixed Peeled Cashews €3,100 €3,750
* Opening cashew adjustment of 22tn
Lincoln Moore, Dekel's Executive Director, said: "The Palm Oil Operation
continues to perform very well with H1 2024 EBITDA increasing 12.1% compared
to H1 2023. With the replacement shelling and peeling equipment all on site
and being assembled, the Cashew Operation is on the cusp of delivering on its
promise over the coming months. We look forward to reporting the upside of
the Cashew operation and seeing the benefits of both operations working well
in tandem".
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
Zeus Capital Ltd (Nomad and Joint Broker) +44 (0) 203 829 5000
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
The Palm Oil Operation continued to perform well resulting in a 12.1% increase
in H1 2024 EBITDA compared to H1 2023. Production was solid, albeit slightly
below the relatively strong H1 2023 results with Fresh Fruit Bunch ('FFB')
volumes and Crude Palm Oil ('CPO') production decreasing marginally by 8.1%
and 7.7% respectively compared to H1 2023. CPO sales quantities increased
7.7% in H1 2024 compared to last year. This is largely due to last year's
high season arriving much later than normal, leading to high CPO stock levels
at the end of H1 2023. The CPO Mill continued to perform consistently which
is reflected in the extraction rate achieved for H1 2024 of 22.0% which was
slightly higher than H1 2023. Strong sales of PKO and prudent management of
FFB prices and overheads were the key factors driving the 12.1% increase in
EBITDA.
International CPO and PKO sales prices continue to trade well above
historically averages and remain very supportive of our Palm Oil Operation.
International CPO prices currently sit at around €900 per tonne. We
continue to see local CPO prices gradually increase back towards the
international price.
Cashew Operation
As previously reported, the Cashew Operation has been operating on a
conservative basis while we awaited replacement equipment for the
underperforming shelling and peeling sections. All new shelling and peeling
equipment was ordered in January 2024 and now all arrived at the Cashew
Operation site.
The new peeling and shelling sections should be able to be installed
relatively quickly and we should therefore see a material improvement in
production volumes in the next 6-8 weeks. This increase in cashew production
volumes together with improving cashew prices should lead to a significant
improvement in the performance of the Cashew Operations in the back end of
2024. The Cashew Operation ramp up remains the key catalyst to drive both
our short and medium term growth plans and we look forward to finally seeing
the benefits of this in our Group financial performance.
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 the Cashew Operation.
Group Financial
A summary of the financial performance for H1 2024, in addition to the
comparatives for the previous 5 years, is outlined in the table below.
H1 2024 H1 2023 H1 2022 H1 2021 H1 2020 H1 2019
CPO production (tonnes) 23,236 25,166 16,893 26,515 23,882 28,934
Average CPO price per tonne €770 €934 €1,013 €817 €602 €505
Total Revenue (all products) €19.2m €21.3m €19.7m €21.7m €15.4m €14.6m
Gross Margin €2.2m €3.4m €5.0m €4.9m €2.6m €2.3m
Gross Margin % 11.5% 15.5% 25.4% 22.6% 16.9% 15.8%
Overheads (€1.5m) (€1.8m) (€1.7m) (€1.7m) (€1.4m) (€1.5m)
EBITDA €2.8m €2.5m €4.0m €3.9m €1.9m €1.4m
Net Profit / (Loss) After Tax (€0.7m) €0.4m €2.3m €2.0m €0.5m (€0.1m)
Dekel reported H1 2024 EBITDA of €2.8m compared to €2.5m in H1 2023
EBITDA. The €0.3m increase in EBITDA was driven by:
· A €0.4m increase in the Palm Oil Operation EBITDA due to the
increase in CPO sales volumes as well as continued prudent overhead expense
management more than offsetting lower CPO prices.
· A €0.1m increase in the Cashew Operation EBITDA loss due to
operating inefficiencies resulting from technical issues with the peeling and
shelling sections.
Dekel reported a H1 2024 Net Loss after Tax of €0.7m compared to a Net
Profit after Tax of €0.4m. The difference was primarily driven by:
· An increase in H1 2024 EBITDA of €0.3m compared to H1 2023 as
described above being offset by:
o The inclusion of H1 2024 depreciation from the Cashew Operation for the
first time increasing Group depreciation by €1.1m.
o An increase in Cashew Operations interest expense of €0.2m in FY 2023
which was previously capitalised in H1 2023.
Outlook
The Palm Oil Operation continues to perform very well for the Group with H1
2024 EBITDA increasing 12.1% despite CPO prices normalising, albeit at
relatively high levels compared to H1 2023. The Cashew Operation is
hopefully on the cusp of finally delivering on its promise over the coming
months. We look forward to reporting the significant upside of the Cashew
operation and seeing the benefits of both operations working well in tandem.
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: 24
September 2024
INTERIM CONDENSED CONSOLIDATED STATEMENTS OF FINANCIAL POSITION
30 June 31 December
2024 2023
Unaudited Audited
Euros in thousands
ASSETS
CURRENT ASSETS:
Cash and cash equivalents 76 209
Trade receivables 1,129 1,571
Inventory 3,297 3,037
Bank deposits - restricted 2,858 673
Other accounts receivable 1,019 1,017
Total current assets 8,379 6,507
NON-CURRENT ASSETS:
Bank deposits - restricted 1,030 1,025
Property and equipment, net 41,651 43,084
Total non-current assets 42,681 44,109
Total assets 51,060 50,616
The accompanying notes are an integral part of the interim condensed
consolidated financial statements.
INTERIM CONDENSED CONSOLIDATED STATEMENTS OF FINANCIAL POSITION
30 June 31 December
2024 2023
Unaudited Audited
Euros in thousands
LIABILITIES AND EQUITY
CURRENT LIABILITIES:
Short-term loans and current maturities of long-term loans 9,098 8,470
Trade payables 1,437 2,795
Advances from customers 1,242 499
Other accounts payable 4,476 3,451
Total current liabilities 16,253 15,215
NON-CURRENT LIABILITIES:
Long-term lease liabilities 128 128
Accrued severance pay, net 84 72
Loan from shareholder 705 679
Long-term loans 23,638 23,572
Total non-current liabilities 24,555 24,451
Total liabilities 40,808 39,666
EQUITY:
Share capital 178 178
Additional paid-in capital 40,820 40,817
Accumulated deficit (23,963) (23,262)
Capital reserve 2,532 2,532
Capital reserve from transactions with non-controlling interests (9,315) (9,315)
Total equity 10,252 10,950
Total liabilities and equity 51,060 50,616
The accompanying notes are an integral part of the interim condensed
consolidated financial statements.
24 September, 2024
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
INTERIM CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
Six months ended Year ended
30 June 31 December
2024 2023 2023
Unaudited Audited
Euros in thousands
(except per share amounts)
Revenues 19,193 21,332 38,299
Cost of revenues (16,955_ (17,887) (36,239)
Gross profit 2,238 3,445 2,060
General and administrative (1,449) (1,847) (3,562)
Operating profit 789 1,598 (1,502)
Other income - -
Finance cost (1,405) (1,185) (2,881)
Income (loss) before taxes on income (616) 413 (4,383)
Taxes on income (85) (37) (75)
Net income (loss) and total comprehensive income (loss) (701) 376 (4,458)
Attributed to:
Equity holders of the Company (701) 376 (4,458)
Non-controlling interest - - -
(701) 376 (4,458)
Income per share attributable to equity holders of the Company (in Euros):
Basic and diluted income per share 0.00 0.00 (0.01)
The accompanying notes are an integral part of the interim condensed
consolidated financial statements.
INTERIM CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY
Share Additional paid-in capital Accumulated deficit Capital reserve Capital reserve from transactions with non-controlling interests Total
capital equity
Euros in thousands
Balance as of 1 January 2024 (audited) 178 40,817 (23,262) 2,532 (9,315) 10,950
Net income and total comprehensive income (701) (701)
Issue of shares for services provided *) 3 3
Balance as of 30 June 2024 (unaudited) 178 40,820 (23,963) 2,532 (9,315) 10,252
Share Additional paid-in capital Accumulated deficit Capital reserve Capital reserve from transactions with non-controlling interests Total
capital equity
Euros in thousands
Balance as of 1 January 2023 (audited) 177 40,736 (18,804) 2,532 (9,315) 15,326
Net income and total comprehensive income - - 376 - - 376
Balance as of 30 June 2023 (unaudited) 177 40,736 (18,428) 2,532 (9,315) 15,702
Share Additional paid-in capital Accumulated deficit Capital reserve Capital reserve from transactions with non-controlling interests Total
capital equity
Euros in thousands
Balance as of 1 January 2023 (audited) 177 40,736 (18,804) 2,532 (9,315) 15,326
Net loss and total comprehensive loss - - (4,458) - - (4,458)
Issue of shares for services provided 1 81 - - 82
Balance as of 31 December 2023 (audited) 178 40,817 (23,262) 2,532 (9,315) 10,950
The accompanying notes are an integral part of the interim condensed
consolidated financial statements.
INTERIM CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
Six months ended Year ended
30 June 31 December
2024 2023 2023
Unaudited Audited
Euros in thousands
Cash flows from operating activities:
Net income (loss) (701) 376 (4,458)
Adjustments to reconcile net income (loss) to net cash provided by operating
activities:
Adjustments to the profit or loss items:
Depreciation 1,985 873 4,103
Share-based payment - 55
Accrued interest on long-term loans and non-current liabilities 1,093 1,178 3,470
Change in employee benefit liabilities, net 12 (5) (55)
Changes in asset and liability items:
Decrease (increase) in inventories (260) (3,398) 121
Decrease in trade receivables 442 687 -
Decrease (increase) in other accounts receivable 35 (606) (33)
Increase (decrease) in trade payables (1,355) 2,317 1,436
Increase in advance from customers 743 358 153
Increase (decrease) in accrued expenses and other accounts payable 1,025 774 (374)
3,720 2,178 8,876
Cash paid during the period for:
Income taxes (37) (37) (37)
Interest (1,122) (1,174) (2,424)
(1,159) (1,211) (2,461)
Net cash provided by operating activities 1,860 1,343 1,957
The accompanying notes are an integral part of the interim condensed
consolidated financial statements.
INTERIM CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
Six months ended Year ended
30 June 31 December
2024 2023 2023
Unaudited Audited
Euros in thousands
Cash flows from investing activities:
Increase in deposits (2,170) (227) (149)
Sale of property and equipment - -
Purchase of property and equipment (552) (1,778) (1,952)
Net cash used in investing activities (2,722) (2,005) (2,101)
Cash flows from financing activities:
Receipt (payment) of short-term loans, net 1,314 399 1,367
Repayment of long-term loans (585) (1,765) (3,254)
Net cash provided by (used in) financing activities 729 (1,366) (1,887)
Decrease in cash and cash equivalents (133) (2,028) (2,031)
Cash and cash equivalents at beginning of period 209 2,240 2,240
Cash and cash equivalents at end of period 76 212 209
Supplemental disclosure of non-cash activities:
Issuance of shares to director and service providers 3 - 27
The accompanying notes are an integral part of the interim condensed
consolidated financial statements.
NOTE 1:- GENERAL
a. These financial statements have been prepared in a condensed
format as of 30 June 2024, 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 2023 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 2024, the Group has a working capital deficiency of €7.9
million (€8.7 million as of 31 December 2023). The group generated a
positive cash flow from operation of €1.9 million (€1.3 million for the
six-month ended 30 June 2023). The Palm Oil operation is performing well,
recording profit before tax of €3.1 million (including depreciation of
€0.7 millions) for the 6 months ending 30 June 2024 (see also note 3
operating segments). This profit was offset mainly by a loss at the cashew
segment to a total loss for the period of €0.7 millions (including
depreciation of €2 millions). 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 2025, 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: - INITIAL APPLICATION OF AMENDMENTS TO FINANCIAL
REPORTING STANDARDS
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 financial covenants with which an entity must comply on or before
the reporting date will affect a liability's classification as current or
non-current.
· In respect of a liability for which compliance with financial
covenants is to be evaluated within twelve months from the reporting date,
disclosure is required to enable users of the financial statements to assess
the risks related to that liability. The Subsequent Amendment requires
disclosure of the carrying amount of the liability, information about the
financial covenants, and the facts and circumstances at the end of the
reporting period that could result in the conclusion that the entity may have
difficulty in complying with the financial covenants.
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 applied
retrospectively for annual periods beginning on January 1, 2024.
NOTE 3: - INITIAL APPLICATION OF AMENDMENTS TO FINANCIAL
REPORTING STANDARDS
The Amendments did not have a material impact on the Company's
interim consolidated financial statements.
b. Disclosure of new Standards in the period prior to adoption:
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 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:- 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
Dekel Oil 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.
b. Reporting operating segments:
Crude palm oil Raw cashew nut Unallocated Total
Euros in thousands
Six months ended 30 June 2024 (unaudited):
Revenues - external customers 18,540 653 19,193
Segment operating profit (loss) 3,114 (1,907) (418) 789
Finance cost (992) (407) (6) (1.405)
Profit (loss) before taxes on income 2,122 (2,314) (424) (616)
Depreciation 728 1,242 15 1,985
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
NOTE 4:- OPERATING SEGMENTS (Cont.)
Crude palm oil Raw cashew nut Unallocated Total
Euros in thousands
Year ended 31 December 2023 (audited):
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
Crude palm oil Raw cashew nut Unallocated Total
Euros in thousands
As of 30 June 2024 (unaudited):
Segment assets 36,416 14,490 154 51,060
Segment liabilities 29,860 10,457 491 40,808
As of 31 December 2023 (audited):
Segment assets 34,815 15,616 185 50,616
Segment liabilities 28,665 10,568 433 39,666
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