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

Dekel Agri-VisionAnnouncement

11/04/2022 07:00

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RNS Number : 8742H  Dekel Agri-Vision PLC  11 April 2022

 

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

 

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

March 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 a March 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

·      In line with guidance last month, the high season which typically
peaks in March has yet to commence in earnest resulting in CPO production
being 50.5% lower than March last year.  This highly unusual change in
seasonal production is being experienced throughout Côte d'Ivoire and also in
Ghana and Nigeria.

·      Early guidance for April is that production is tracking at a
similar level to March.  Intra month production is typically significantly
higher in the last 10 days of each month so we will have better vision of any
seasonal surge later this month.

·      CPO price of €996 per tonne achieved in March 2022, a 25.6%
increase compared to March 2021

o  Following the recent spike in international prices, we have identified new
buyers at higher prices which will start to flow through from April.  We are
sensitive to meeting local commitments but we expect approximately 40-50% of
our expected April production will be sold at over €1,150 per tonne
ex-factory

·      CPO extraction rate increased a further 0.5 percentage points
from February to 22.8% and was 1.4 percentage points higher than March 2021.

·      Palm Kernel Oil ('PKO') prices also continued their strong
momentum following the commencement of exports achieving €1,486 per tonne in
March 2022, a 79.0% increase compared to March 2021.

·      High prices and excellent CPO extraction rates mean Q1 2022
Revenue remains ahead of Q1 2021

Cashew Project

·      Material progress achieved during the month relating to the
procurement and shipment of key remaining equipment in order to commence the
final assembly phase to ramp up to full production

·      In the interim, production from the Cashew project continued at
approximately 15% of production capacity

 

                              Mar-22    Mar-21  Change  Q1 2022   Q1 2021  Change

 FFB processed (tonnes)       15,673    32,261  -51.4%  47,785    71,500   -33.2%
 CPO production (tonnes)      3,567     6,895   -48.3%  10,553    15,327   -31.1%
 CPO Sales (tonnes)           2,788     6,629   -57.9%  9,751     13,921   -30.0%
 Average CPO price per tonne  €996      €793    25.6%   €989      €794     24.6%
 PKO production (tonnes)      235       329     -28.6%  703       804      -12.6%
 PKO Sales (tonnes)           125       398     -68.6%  821       967      -15.1%
 Average PKO price per tonne  €1,486    €830    79.0%   €1,392    €780     78.5%
 PKC production (tonnes)      374       505     -25.9%  1,106     1,187    -6.8%
 PKC Sales (tonnes)           75        529     -85.8%  468       978      -52.1%
 Average PKC price per tonne  €85       €78     9.0%    €85       €74      14.9%

 

 

CPO Production

·      The lower level of current production is being experienced
nationwide and also in Ghana and Nigeria.

·      Local agronomy experts throughout the region are having
difficulty pinpointing the reasons for this variation.

·      Early guidance for April suggests we are currently tracking at
similar production levels as March.  Typically, 70% of production occurs in
the last half of any given month so we will have more vision to update the
market at this time in terms of the typical high season production surge which
has yet to take place

·      Revenue for Q1 2022 remains higher than last year with the
current lower levels of production being more than offset by higher CPO
extractions rates and higher CPO and PKO prices

CPO Sales and Prices

·      As announced last month, given the current price gap between
local prices and international prices that has arisen, we have opened
discussions with a number of new groups to maximise sales prices whilst
honouring our local commitments.  This has led to sales being agreed for
40-50% of our expected production for April at over €1,150 per tonne.
Importantly, these prices continue to be achieved ex-factory.

·      Discussions also continue with parties including export partners
within African and Europe as we continue to diversify and enhance our sales
prices over the coming months.

Palm Kernel Oil ('PKO') and Palm Kernel Cake ('PKC')

·    PKO Prices: 79% increase in PKO prices to €1,486 per tonne compared
to €830 in March 2021.

·    Our success in identifying new buyers for our PKO is driving a
material increase in the profitability of the PKO business unit in 2022.

Cashew Project

·      Material progress was achieved in March as we seek to ramp up
production towards full capacity:

o  Colour sorter was shipped from China with expected arrival date in Côte
d'Ivoire in May 2022

o  10 shelling machines have been procured locally to support full scale
production whilst the machines in Italy await shipment in batches commence
over the coming weeks

o  Timelines to move towards full production are now becoming more certain
with the final assembly period taking place through May and June which should
see production levels materially increase during this period

·      The Cashew processing plant is continuing operating well at a
limited capacity.

 

Lincoln Moore, Dekel's Executive Director, said: "Production wise, it has been
an unusual period for 7 months now with high production during the period
September to December 2021 and low production during February and March
2022.  Whilst it is our expectation Q2 2022 will see improvement, it is
difficult for local agronomists to pinpoint the reasons for this variation and
therefore forecast production so we will continue to provide monthly forward
guidance."

 

"Importantly we are achieving CPO extractions higher than last year and
coupled together with high local CPO and PKO prices, which have progressively
increased over the past few months, we remain well positioned to deliver a
strong H1 2022 performance and take advantage of any surge in production
during Q2 2022."

 

The information contained within this announcement is deemed by the Company to
constitute inside information as stipulated under the Market Abuse Regulations
(EU) No. 596/2014 ("MAR").  Upon the publication of this announcement via a
Regulatory Information Service ("RIS"), 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

 Arden Partners Plc (Nomad and Joint Broker)  +44 (0) 207 614 5900

 Paul Shackleton / Ruari McGirr /

 Elliot Mustoe (Corporate Finance)

 Optiva Securities Limited (Joint Broker)     +44 (0) 203 137 1903

 Christian Dennis

 Jeremy King

 

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 crude palm oil mill; a cashew processing project in
Tiebissou, which commenced production in early January 2021.

 

 

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