REG - Dekel Agri-Vision - H1 2022 Operating Update

Dekel Agri-VisionAnnouncement

11/07/2022 07:00

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RNS Number : 9251R  Dekel Agri-Vision PLC  11 July 2022

 

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

 

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

H1 2022 Operating 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 half year production update for the period ending 30 June 2022
('H1 2022') on the 100%-owned Ayenouan palm oil project in Côte d'Ivoire (the
'Palm Oil Operation') and an update on the ramp-up of production of our
large-scale cashew processing plant at Tiebissou, Côte d'Ivoire (the 'Cashew
Project').

 

Highlights

·      Despite unusually low high season volumes, the record high prices
of Crude Palm Oil ('CPO') and Palm Kernel Oil ('PKO') and strong extraction
rates achieved mean H1 2022 financial results of the Palm Oil Operation have
remained strong with increased gross margin percentage largely offsetting
lower volumes

·      36.3% decrease in CPO production to 16,893 tonnes in H1 2022
compared to 26,515 in H1 2021

·      24.0% increase in average realised CPO prices to a record level
of €1,013 per tonne in H1 2022 (H1 2021: €817)

·      83.6% increase in average realised PKO prices to a record level
of €1,454 per tonne in H1 2022 (H1 2021: €792)

 

Lincoln Moore, Dekel's Executive Director, said: "We remain optimistic that
the strong current international CPO prices will continue to trade at levels
above historical averages of €750 per tonne. In addition, given the high
levels of oil palm estates planted over the past 5-10 years in our region, we
expect the current low levels of fresh fruit bunches ('FFB') volumes are a
temporary agronomic variation.  Therefore, together with continued high
prices, the Palm Oil Operation is well-positioned to deliver a sustained
period of operating profitability.

 

"We are also pleased to confirm that the remaining key shipments for the
Cashew Operation, most notably the outstanding shelling machines, have taken
place. We remain on track to meet market expectations of cashew production
forecasts in 2022 and will provide a detailed update on the Cashew Operation
in due course as we continue the final assembly process and move towards full
production capacity".

 

                              H1 2022      H1 2021             Change

 FFB processed (tonnes)       75,448    123,684  -39.0%
 CPO production (tonnes)      16,893    26,515   -36.3%
 CPO Extraction Rate          22.4%     21.4%    4.7%
 CPO Sales (tonnes)           16,996    24,784   -31.4%
 Average CPO price per tonne  €1,013    €817     24.0%
 PKO production (tonnes)      1,162     1,554    -25.2%
 PKO Sales (tonnes)           1,180     1,223    -3.5%
 Average PKO price per tonne  €1,454    €792     83.6%
 PKC production (tonnes)      1,762     2,428    -27.4%
 PKC Sales (tonnes)           692       1,707    -59.5%
 Average PKC price per tonne  €86       €77      11.7%

 

* Numbers subject to half-year interim audit including final audit cut-offs

 

Crude Palm Oil

·      Production: 36.3% decrease in CPO production to 16,893 tonnes in
H1 2022 compared to H1 2021

o  The typical high season, which normally takes place from February to May,
was at historically low levels

o  CPO extraction rate in H1 2022 increased to 22.4% (H1 2021: 21.4%),
partially offsetting 39% lower FFB quantities compared to H1 2021

·      Sales: 31.4% fall in CPO sales to 16,996 tonnes in H1 2022 (H1
2021: 24,784 tonnes) largely due to the lower CPO production

·      Prices: 24.0% increase in average realised CPO prices to a record
level of €1,013 per tonne in H1 2022 compared to H1 2021

o  International CPO prices have steadied but continue to trade at multi-year
highs of approximately €1,150 - 1,250 per tonne

 

Palm Kernel Oil ('PKO')

·      Production: H1 2022 PKO production 25.2% lower than H1 2021 due
to lower FFB volumes

·      Sales: 3.5% decrease in H1 2022 compared to H1 2021 as a patient
sales approach is adopted to capitalise on rising PKO prices

·      Prices: 83.6% higher in H1 2022 (€1,454) than H1 2021 (€792),
which is a record half-year average price achieved

·      The high prices reflect the successful strategy to export a
significant amount of PKO production in regional Africa to gain access to
higher international prices

 

Palm Kernel Cake ('PKC')

·      Similarly to PKO, we are also taking a patient approach to sales
prices to capitalise on rising PKC price levels

·      Dekel currently holds approximately 2,100 tonnes of stock at the
end of H1 2022 which we expect to sell gradually in H2 2022 to take advantage
of rising PKC prices

·      Prices: 11.7% increase in average realised PKC prices to €86
per tonne in H1 2022 compared to €77 per tonne in H1 2021

 

Cashew Project

·      As announced on 13 June 2022, the colour sorter arrived on 12
June and the remaining shelling machines have now been shipped. This will
enable the Company to significantly expand its production capacity and we will
provide material updates regarding the assembly milestones over the coming
weeks.

 

Issue of Equity

In addition, application has been made to the London Stock Exchange for the
admission of a total of 306,334 ordinary shares of €0.0003367 each
("Ordinary Shares") issued to certain advisers in settlement of fees for
services provided ("Admission"). It is expected that Admission will become
effective on or around 15 July 2022. Following Admission, the Company's issued
share capital will consist of 537,404,775 Ordinary Shares which may be used by
shareholders as the denominator for the calculations by which to determine if
they are required to notify their interest in, or a change to their interest
in, the Company under the FCA's Disclosure and Transparency Rules.

 

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 2021.

 

 

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