REG - Dekel Agri-Vision - Half Year Operational Update

Dekel Agri-VisionAnnouncement

12/07/2023 07:00

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RNS Number : 7125F  Dekel Agri-Vision PLC  12 July 2023

 

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.

 

12 July 2023

 

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

 

Dekel Agri-Vision Plc

('Dekel' or the 'Company')

Half Year 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 half year production update for the period ending 30 June 2023
('H1 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 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.

·      The high season was much later than we have experienced in
previous years including June 2023 CPO monthly production being 261% higher
than June 2022.  Early guidance from July also indicates we will record a
5(th) successive month of significantly higher production but lower extraction
rates compared to 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.
This CPO will be sold during H2 2023 which we expect will drive strong sales
quantities over the coming months.

·      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 local price has slightly softened over the past few weeks to
around €875-900 due to excess local CPO supply resulting from the late high
season, however, we expect local prices to firm in comparison to the
international price during the upcoming low season as local CPO supplies
typically decrease.

·      The CPO extraction rate for H1 2023 of 21.9% was slightly lower
than H2 2022 but remains well in line with expectations.

·      Overall, we expect to deliver a strong H1 financial performance
for the Palm Oil operation and with higher than normal CPO and PKO stock on
hand at the end of H1 2023, we expect H2 2023 is well positioned to outperform
H2 2022.

 

                                              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%

 

Cashew Operation Update

·      It was necessary to slow down the gradual increase in daily
production we saw in late March and early April 2023 to:

o  Ensure an orderly transition of the Cashew Operation from a batch process
to a full continuous process more carefully than expected.

o  Deal with some teething issues in the continuous process mainly related to
the continuous operation of the 10 new shelling machines.  A large majority
of the machines have been operating well in the past few days.

o  Undertake the onsite review component of our BRC Global Food standard
assessment ('BRC') which commenced in June 2023 and included an extensive
review and testing of each operating station.  The BRC assessment is a
critical part of our strategy to extract premium pricing and the onsite review
is one of the final stages to obtain BRC certification.

·      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.

 

                                 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: "Four consecutive months of
very strong CPO production coupled together with continued high CPO prices has
delivered an excellent H1 2023 operating performance for the Palm Oil
operation.  With significant levels of CPO and PKO stock on hand at the end
of H1 2023 due to the late high season, the platform is set for a strong
performance in H2 2023 compared to H2 2022 as well."

 

"It was necessary to slow down the ramp up of the Cashew Operation to ensure
an orderly transition to a full continuation process.  In addition, we also
commenced the onsite BRC Food Standard assessment in June 2023 which slowed
production but is a key milestone to achieve in order to obtain premium
pricing.  With the other key value drivers including the extraction rate, raw
material prices and sales prices operating in line with expectations we expect
to deliver continued improvement in the Cashew Operation over the coming weeks
and months."

 

 

** 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

 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.

 

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