TIDMDKL
RNS Number : 3425L
Dekeloil Public Limited
18 July 2017
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.
DekelOil Public Limited / Index: AIM / Epic: DKL / Sector: Food
Producers
DekelOil Public Limited ('DekelOil' or the 'Company')
Half Year Production Update
DekelOil Public Limited, operator and 100% owner of the
profitable and vertically integrated Ayenouan palm oil project in
Côte d'Ivoire (the 'Project'), is pleased to provide a production
update for the half year ended 30 June 2017.
A 22.1% increase in product sales (including CPO, Palm Kernel
Oil ('PKO') and Palm Kernel Cake ('PKC')) to EUR18.8 million (H1
2016: EUR15.4 million) is expected to be reported in the half year
to 30 June 2017, primarily due to stronger CPO pricing resulting
from higher global prices and increased CPO storage capacity at the
Project which enabled the Company to improve local pricing terms.
Record like-for-like CPO production was recorded in Q1 2017, which
was followed by curtailed production at the Mill in Q2 due to now
rectified mechanical issues during May and June. H1 production of
CPO was therefore marginally lower at 26,947 tonnes (H1 2016:
28,550 tonnes).
As a result of the strong first half performance, the Company
expects EBITDA for H1 2017 to be materially higher than H1 2016's
EBITDA of EUR3.1m.
H1 2017 H1 2016 Increase
/ Decrease
Product Sales (excluding EUR15.4
nursery)* EUR18.8 m m 22.1%
Fresh Fruit Bunches
('FFB') collected
(tonnes) 117,706 123,157 -4.4%
CPO production (tonnes) 26,947 28,550 -5.6%
CPO Sales (tonnes) 24,570 25,225 -2.6%
Average CPO price
per tonne 707 542 30.4%
Palm Kernel Oil ('PKO')
production (tonnes) 1,648 1,998 -17.5%
PKO Sales (tonnes) 1,322 1,828 -27.7%
Average PKO price
per tonne 1,015 781 30.0%
Palm Kernel Cake
('PKC') production
(tonnes) 2,204 2,360 -6.6%
PKC Sales (tonnes) 2,229 2,615 -14.8%
Average PKC price
per tonne 51 40 27.5%
* Product sales subject to final audit cut off
-- 22.1% increase in H1 product sales to EUR18.8m primarily due
to stronger CPO, PKC and PKO prices, in addition to increasing CPO
storage capacity from 5,000 to 8,000 tonnes, enabling the Company
to sell CPO at a premium to international prices
o 30.4% year on year increase in average CPO prices achieved by
the Company to EUR707 per tonne in H1 2017 (H1 2016: EUR542), a 5%
premium to average international CPO prices of EUR674 per tonne
during H1 2017
o New 3,000 tonne storage tank provides DekelOil with
flexibility over timing of CPO sales to maximise prices
o All H1 2017 stock on hand pre-sold at an average price of
EUR715, representing a 31.9% year on year increase compared to H1
2016 pre sales as the Company was able to capitalise on higher
prices
o At 30 June 2017, CPO inventory was 2,483 tonnes
o H1 2016 sales prices were impacted by the local currency
crisis in Nigeria which is long since resolved
-- Strong product sales to translate into an expected record H1 financial performance
o Year on year H1 gross margins expected to be higher than the
26% achieved in H1 2016 primarily driven by improved pricing
o EBITDA for H1 2017 expected to exceed H1 2016's EBITDA of
EUR3.1m
o NPAT is also expected to benefit further due to lower interest
expense following completion of debt refinancing programme on
improved terms in 2016
-- Following record like for like CPO production in Q1 2017, the
Mill was not fully operational during May and June 2017 due to two
separate mechanical issues that have since been rectified
o The first related to blockages in production flow in the
kernel separation process
o The second related to an equipment failure within the deoiling
tank - Modipalm has taken responsibility and the Company is
discussing capital reimbursement
o Total CPO production losses in May and June as a result of
lost production hours are estimated to be approximately 3,500 -
4,000 tonnes
o Operations at the Mill returned to normal from late June
-- Year on year CPO extraction rate fractionally lower than the 23.1% achieved in H1 2016
o New Empty Fruit Bunch press became operational in March 2017
and is estimated to be contributing an additional 0.4-0.5% to the
overall extraction rate, however milling interuptions coupled with
a decreased oil content analysed in FFB offset the improved like
for like extraction rate
-- Year on year PKO production was lower primarily due to
storing of 550 tonnes of nuts (expected to yield approximately 275
tonnes of kernels) for processing in Q3 to maximise Mill efficiency
in low season
-- The PKO extraction rate of 42.25% is above the 41% achieved in H1 2016
DekelOil Executive Director Lincoln Moore said: "We believe we
are on course to report another set of record half yearly revenues,
EBITDA, and net profit after tax. The now resolved mechanical
issues which prevented the Mill from being fully operational during
Q2 and resulted in marginally lower year on year CPO production in
H1 were frustrating, but we are encouraged by the response from the
team on the ground who have efficiently restored the Mill to full
operation. As well as stronger international prices, the excellent
financial performance is due to the commissioning of an additional
storage tank which assisted in maximising pricing during the
period.
"With last year's first half EBITDA of EUR3.1 million set to be
exceeded, Ayenouan has proved itself to be a highly cash generative
platform upon which we will build a leading West African focused
palm oil company. With this in mind, we are moving forward with
plans to develop our second project in Côte d'Ivoire at Guitry,
while discussions are continuing with regards to the acquisition of
Norpalm, a producing palm oil project in Ghana. This is an exciting
time for shareholders and I look forward to providing further
updates on our progress."
In addition, application has been made to the London Stock
Exchange for the admission of 123,684 ordinary shares of
EUR0.0003367 each ("Ordinary Shares") issued to certain advisers in
settlement of fees for services provided ("Admission"). It is
expected that Admission will become effective on 24 July 2017.
Following Admission, the Company's issued share capital will
consist of 296,119,458 Ordinary Shares.
** ENDS **
For further information please visit the Company's website
www.dekeloil.com or contact:
DekelOil Public Limited
Youval Rasin
Shai Kol +44 (0) 207
Lincoln Moore 236 1177
Cantor Fitzgerald Europe
(Nomad and Broker)
Andrew Craig +44 (0) 207
Richard Salmond 894 7000
Beaufort Securities Limited
(Broker)
Zoe Alexander +44 (0) 207
Elliot Hance 382 8300
Optiva Securities Limited
(Broker)
Christian Dennis +44 (0) 203
Jeremy King 137 1903
St Brides Partners Ltd (Investor
Relations) +44 (0) 207
Frank Buhagiar 236 1177
Notes:
DekelOil Public Limited is a low cost producer of palm oil in
West Africa, which it is focused on rapidly expanding. To this end,
it has an 100% interest in one of the largest oil processing mills
based in Côte d'Ivoire, which has a capacity of 70,000 tons of CPO.
Feedstock for the Mill comes from several co-operatives and
thousands of smallholders, however it also has nearly 1,900
hectares of its own plantations. Furthermore, it has a world-class
nursery with a 1 million seedlings a year capacity.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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