REG - Dekel Agri-Vision - Full Year 2023 Operational Update

Dekel Agri-VisionAnnouncement

11/01/2024 07:00

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RNS Number : 3178Z  Dekel Agri-Vision PLC  11 January 2024

 

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.

 

11 January 2024

 

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

 

Dekel Agri-Vision Plc

('Dekel' or the 'Company')

Full Year 2023 Operational 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 its unaudited full year production update for the year ending 31
December 2023 ('FY-2023') for the Ayenouan palm oil project in Côte d'Ivoire
('Palm Oil Operation') and the cashew processing plant at Tiebissou, Côte
d'Ivoire (the 'Cashew Operation').

 

Palm Oil Operation Update

·      The Palm Oil operation performed very well during FY 2023 driven
by close to record Crude Palm Oil ('CPO') production and relatively high
historical CPO prices as outlined in the table below.

 

                                              FY-2023  FY-2022   Change

 FFB processed (tonnes)                       182,362  116,733   56.2%
 CPO Extraction Rate                          21.4%    22.1%     -3.2%
 CPO production (tonnes)                      39,073   25,751    51.7%
 CPO Sales (tonnes)                           38,896   26,016    49.5%
 Average CPO price per tonne                  €869     €1,025    -15.2%
 Palm Kernel Oil ('PKO') production (tonnes)  2,420    1,824     32.7%
 PKO Sales (tonnes)                           2,404    1,991     20.7%
 Average PKO price per tonne                  €828     €1,381    -40.0%

 

·      Fresh Fruit Bunch ('FFB') volumes and Crude Palm Oil ('CPO')
production increased 56.1% and 51.7% respectively compared to FY 2022.

o  December 2023 FFB and CPO was 11.8% and 4.8% respectively higher than
December 2022. CPO sales were up 48.3% in December 2023 compared to December
2022.

·      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. As the FY 2023 year progressed, local CPO prices traded below
international CPO prices but in turn, our FFB purchase prices also decreased
resulting in healthy gross margins being achieved. International CPO prices
ended 2023 at c.€850 per tonne which remains supportive for the performance
of the Palm Oil Operation in 2024.

·      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.

 

Cashew Operation Update

·      FY 2023 was the first year of commercial production from the
Cashew Operation and a summary of the key performance indicators ('KPIs') are
outlined in the table further below.

·      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 machinery provided by our supplier.

·      Alternate machinery including additional shelling machines were
ordered in Q4 2023, which have been tested and commissioned. However, as the
Company started to ramp up production, the percentage of unpeeled cashews
remained high creating a bottleneck in the process. During Q4, an independent
expert was appointed to assess the equipment performance and full production
chain. This expert is currently finalising recommendations which includes
replacement of parts of the shelling and peeling section which requires a
modest investment of c.€250,000 from existing cash resources. Whilst daily
production and quality should improve during Q1 2024, any significant uplift
in production and quality is more likely during Q2 2024 when the
recommendations of the external expert can be fully implemented.

·      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.

 

                                   FY-2023

 Raw Cashew Nut ('RCN') Inventory
 Opening RCN Inventory (tonnes)    1,841
 RCN Purchased (tonnes)            1,419
 RCN Processed (tonnes)            1,509
 Closing RCN Inventory (tonnes)    1,751

 Cashew Processing
 Opening Cashews (tonnes)          111
 RCN Processed (tonnes)            1,509
 Cashew Extraction Rate            21.9%
 Cashew Produced (tonnes)          330
 Cashew Sales (tonnes)             265
 Closing Cashews (tonnes)          176

 Average Sales prices per tonne
 -       Unpeeled Cashews          €3,200
 -       Peeled Cashews            €3,900

 

Lincoln Moore, Dekel's Executive Director, said: "Ten consecutive months of
stronger like for like CPO production resulted in a 51.7% increase in 2023 CPO
production compared to last year which was an excellent outcome.  Coupled
together with continued relatively high CPO prices compared to historical
levels, FY2023 has been one of the best annual financial performances
delivered by the Palm Oil operation.

 

The Cashew Operation achieved a number of key milestones during its first year
of commercial production, however, daily production rates continues to be
impacted by the performance of the shelling and peeling sections.  Solutions
are being implemented and we will continue to update the market as we increase
production."

** 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.

 

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