REG - Dekel Agri-Vision - April Palm Oil Production & Cashew Project Update

Dekel Agri-VisionAnnouncement

10/05/2022 07:00

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RNS Number : 8580K  Dekel Agri-Vision PLC  10 May 2022

 

Dekel Agri-Vision Plc / Index: AIM / Epic: DKL / Sector: Food Producers

 

Dekel Agri-Vision Plc ('Dekel' or the 'Company')

April Palm Oil Production Update and Cashew Project Update

 

Dekel Agri-Vision Plc (AIM: DKL), the West African agriculture company focused
on building a portfolio of sustainable and diversified projects, is pleased to
provide an April production update for its Ayenouan palm oil project in Côte
d'Ivoire, and an update on the timing of the ramp-up of production of our
large-scale cashew processing plant at Tiebissou, Côte d'Ivoire (the 'Cashew
Project').

 

Key Highlights

 

Palm Oil Project

·      The Crude Palm Oil ('CPO') high season volumes have continued to
remain weak in line with guidance provided in our announcement dated 10 March
2022, with April 2022 production 42.4% lower than April 2021.

o  Our agronomist currently advises that low recent rainfall has continued to
delay the typical ripening timing of fresh fruit bunches ('FFB') and they
remain cautiously optimistic we will see some improvement in the shortfall of
monthly FFB over the next two months, provided the levels of rainfall increase
over the coming weeks.

·      CPO sales quantities in April 2022 were lower as a percentage of
production than April 2021 as we seek to carefully manage sales in order to
maximise prices, given local Ivory Coast prices continue to remain materially
lower than international prices.

·      CPO prices achieved continue to strengthen with prices of
€1,061 per tonne achieved in April 2022, a 32.1% increase compared to April
2021. In addition, PKO prices remain significantly higher than the prior year
with prices achieved of €1,448, a 72.8% increase compared to April 2021.

·      CPO extraction rate continued its higher trend at 22.5% in April
2022, 1.1 percentage points higher than April 2021.

·      Overall, despite the weak FFB volumes, the Company is delivering
a strong year-to-date financial performance driven by high CPO and Palm Kernel
Oil ('PKO') prices, in addition to the relatively greater extraction rate
compared to prior year.

 

Cashew Project

·      Colour sorter due to arrive in the coming weeks and the shelling
machines shortly thereafter which will enable Dekel to significantly increase
production.

 

 

                                               Apr-22    Apr-21   Change

 FFB processed (tonnes)                        13,168

                                                         24,010   -45.2%
 CPO production (tonnes)                       2,965     5,147    -42.4%
 CPO sales (tonnes)                            1,788     4,971    -64.0%
 Average CPO price per tonne                   €1,061    €803     32.1%
 PKO production (tonnes)                       197       322      -38.8%
 PKO sales (tonnes)                            212       216      -1.9%
 Average PKO price per tonne                   €1,448    €838     72.8%
 Palm Kernel Cake ('PKC') production (tonnes)  300       529      -43.3%
 PKC sales (tonnes)                            61        349      -82.5%
 Average PKC price per tonne                   €97       €80      21.3%

 

CPO Production

·      The local region continues to experience a relatively weak high
season compared to 2021. With the benefit of further local market
intelligence, we can confirm this is the case throughout the eastern part of
Côte d'Ivoire and further to the east in Ghana. The western part of Côte
d'Ivoire and Liberia are now experiencing more typical high season volumes.

·      Local agronomists advise that weak recent rainfall is delaying
the timing of the FFB ripening process. There remain quite healthy levels of
FFB on estates which may lead to some uplift in FFB.  However, we also expect
that given the relatively low high season volumes, competition for FFB will
also be strong and our guidance is H1 2022 production will be materially
softer than last year.

·      We will continue to update the market monthly and provide forward
guidance where appropriate.

CPO and PKO Price

·      International CPO prices continue to remain significantly higher
than local prices.  We are now pleased to confirm we are accessing regional
export markets which resulted in a 7.5% increase in CPO sales prices in April
2022 compared to March 2022.

·      We anticipate our CPO prices for May 2022 should continue to
gradually increase from our strategy to partially utilise export markets where
appropriate, while balancing our obligations to local stakeholders.

·      International PKO prices have recently stabilised at
approximately €1,800-€1,850 cif Rotterdam. Our current ex-factory prices
achieved of over €1,400 remain healthy and over 70% higher than last year.

CPO Sales

·      CPO Sales were low due to both the weak volumes and the
continuing strategy to manage our sales quantities carefully with the goal of
increasing our prices closer to the international price.

 

Cashew Project

·      A colour sorter is scheduled to arrive from China on 25 May 2022
with customs release, transportation to site and commissioning expected to
take place in approximately 3 weeks.

·      The first 11 of the 21 shelling machines are scheduled to be
shipped from Italy in late May.  15 shelling machines are required to operate
at full capacity.

·      Importantly, the arrival of the colour sorter together with the
utilisation of the shelling machines we have on site should see production
gradually increase to over 50% of full capacity in June 2022.

·      Whilst the Company's main supplier has experienced logistical
challenges, particularly in relation to raw materials and shipping, it is
pleasing to see we are now getting closer to completing the commissioning of
the Cashew Project which is an important part of the Company's short and
medium term growth strategy.

 

Lincoln Moore, Dekel's Executive Director, said: "The recent monthly trend of
weak FFB volumes being largely offset by continued strong CPO and PKO sales
prices, in addition to a relatively strong CPO extraction rate has continued
in April 2022. Whilst there is cautious optimism we may see some improvement
in the recent monthly shortfall of FFB volumes compared to prior years over
the next two months, we also remain focused on areas we control, specifically
maximising our prices and completing the delivery of the Cashew Project.

 

"We would also like to take this opportunity to welcome our new nominated
advisor and joint broker, WH Ireland Ltd, and we look forward to working with
their team on executing our strategy to increase the scale and diversification
of our agri-processing and logistics operations in Côte d'Ivoire."

 

 

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

 Ben Good

 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 commenced production in early January 2022.

 

 

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