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

Dekel Agri-VisionAnnouncement

13/06/2022 07:00

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RNS Number : 5606O  Dekel Agri-Vision PLC  13 June 2022

 

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

 

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

May 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 May production update for its Ayenouan palm oil project in Côte
d'Ivoire the ('Palm Oil Operation'), 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

·    The recent trend of very strong Crude Palm Oil ('CPO') and Palm Kernel
Oil ('PKO') prices and exceptionally strong CPO extraction rates offset by
weak fresh fruit bunches ('FFB') volumes continued in May.

·    Further to the Company's announcement of 9 June 2022, the colour
sorter was shipped from China and arrived at Abidjan port, Côte d'Ivoire on
12 June. Once installed, this will enable the Company to materially increase
production capacity.

 

                                               May-22    May-21  Change

 FFB processed (tonnes)                        9,207     16,335

                                                                 -43.6%
 CPO Extraction Rate                           23.5%     20.8%   13.0%
 CPO production (tonnes)                       2,167     3,403   -36.3%
 CPO Sales (tonnes)                            4,025     1,071   275.8%
 Average CPO price per tonne                   €1,056    €774    36.4%
 PKO production (tonnes)                       165       233     -29.2%
 PKO Sales (tonnes)                            148       40      270.0%
 Average PKO price per tonne                   €1,606    €838    91.6%
 Palm Kernel Cake ('PKC') production (tonnes)  251       385     34.8%
 PKC Sales (tonnes)                            138       151     -8.6%
 Average PKC price per tonne                   €85       €80     6.3%

 

CPO Production

·     We saw improved rainfall in May which may have assisted with the very
strong CPO extraction rate; however, FFB quantities remain low across the
region.

·     The CPO extraction rate achieved in May of 23.5% is close to a record
extraction rate and together with high CPO prices is driving improved gross
margins percentages compared to 2021.

CPO and PKO Price

·   International CPO prices continue to remain at near record levels of
around €1,500 per tonne and international prices remain significantly higher
than local prices. We are now exporting a portion of our product to gain
access to these higher prices; however, as is the case globally, there is
pressure on food supplies in Côte d'Ivoire which means we also have
obligations to support the local market.

·     International PKO prices have recently stabilised around
€1,600-1,700. Our current ex-factory price achieved of over €1,600 in May
was a record monthly price.

CPO Sales

·    May was a strong month in terms of CPO sales increasing 276% compared
to May 2021. This is partly as a result of a portion of expected April sales
taking place in May and also strong demand caused by local supply shortages
resulting from the weak high season.

Cashew Project

·   The colour sorter arrived on 12 June and will enable the Company to
significantly increase production capacity once installed.

·     As stated last month, the arrival of the colour sorter together with
the utilisation of the shelling machines the Company already has on site
should see production materially increase to over 50%.

·    The first 11 of the 15 shelling machines are assembled and are
expected to be delivered to the port in Italy shortly. Even if there are
delays, we have sufficient substitute shelling machines on site that we
purchased in case of this issue so this shipment should not present a
significant bottleneck to the ramp up of production.

 

Lincoln Moore, Dekel's Executive Director, said: "It has been an extraordinary
first 5 months of 2022 with record CPO prices and near record CPO extraction
rates, coupled with the weakest high season volumes local industry experts
have ever seen. Importantly, financial performance of the Palm Oil Operation
has remained robust, driven by healthy gross margin percentages. Shipping
issues continue to be a big challenge; however, with the colour sorter having
arrived on 12 June, the Company will be able to ramp up production of the
Cashew Operation. We look forward to providing operational and financial
metric data as the operation settles into a rhythm."

 

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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