TIDMDKL
RNS Number : 1312V
Dekeloil Public Limited
19 July 2018
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, the West African focused agricultural
company, is pleased to provide a production update for its 100%
owned profitable and vertically integrated Ayenouan palm oil
project in Côte d'Ivoire (the 'Project') for the half year ended 30
June 2018.
H1 2018 H1 2017 Increase
/ Decrease
Fresh Fruit Bunches ('FFB')
collected (tonnes) 96,195 117,706 -18.3%
CPO production (tonnes) 22,242 26,947 -17.5%
CPO Sales (tonnes) 22,271 24,570 -9.4%
Average CPO price per tonne 549 707 -22.3%
Palm Kernel Oil ('PKO')
production (tonnes) 1,793 1,648 8.8%
PKO Sales (tonnes) 1,480 1,322 12.0%
Average PKO price per tonne 893 1,015 12.0%
Palm Kernel Cake ('PKC')
production (tonnes) 2,197 2,204 -0.3%
PKC Sales (tonnes) 2,304 2,229 3.4%
Average PKC price per tonne 50 51 -1.9%
Production
-- Lower year on year volumes of FFBs harvested on the eastern
side of Cote d'Ivoire where Ayenouan is situated resulted in 22,242
tonnes of CPO produced at the Company's mill during H1 2018
compared to 26,947 in H1 2017
o Q1 2018: 13,605 tonnes of CPO produced compared to 2017's
record Q1 performance of 16,398 tonnes
o Q2 2018: 8,632 tonnes of CPO produced compared to Q2 2017
volumes of 10,549
-- DekelOil's market share of FFB delivered to its mill as a
proportion of total volumes harvested has remained stable
o the Directors believe this demonstrates the Company's strong
standing among the local smallholder community following increased
competition for FFBs given lower amounts harvested
-- Increase in H1 PKO production and stable Kernel Cake volumes compared to H1 2017
o follows successful strategy to acquire external kernels to
make use of lower mill utilisation
-- Consistent CPO extraction rate to 23.1% in H1 2018 compared to 23.0% in H1 2017
-- Year on year improvement in FFBs processed in early July 2018
are at this stage higher than compared to July 2017
o The Board is hopeful this trend will continue for the
remainder of Q3 2018 and beyond
Sales and Pricing
-- 9.4% decrease in H1 CPO sales to 22,271 tonnes (H1 2017:
24,570 tonnes) reflects reduced volumes of FFBs harvested
-- Further diversification of local customer base with
commencement of CPO sales to Louis Dreyfus Holding B.V., a leading
merchant and processor of agricultural goods, in March 2018
-- CPO sales prices achieved lower due to weaker international
benchmark pricing and the strong appreciation of the Euro against
the USD (palm oil's benchmark currency)
-- Lower year on year pricing and higher competition for FFBs
due to lower volumes harvested have led to a contraction in H1 2018
gross margins
-- Ongoing cost saving programme centred around logistics and
plantation management focused on optimising performance
-- Management looking to capitalise on the lower availability of
CPO in the region as a result of the poor harvest to secure sales
of CPO at a premium to international prices for the remainder of
the year
DekelOil Executive Director Lincoln Moore said: "We have little
control over unseasonable harvests and lower global CPO prices, but
we can take steps to make the best out of challenging trading
conditions. As our cost management programme and our successful
efforts to secure external supplies of kernels to make use of lower
mill utilisation demonstrate, this is what we are doing. In the
longer term, we are confident that our ongoing programme to supply
local smallholders with more productive plants grown at our state
of the art nursery will help boost overall yields in the area, both
during poor and strong harvests. Of course, unseasonable harvests
work both ways and with this in mind we are hopeful that the
stronger year on year volumes we have seen to date in July will
continue and we remain well placed to take full advantage should
both FFB levels and pricing improve.
"Meanwhile over the medium term, we are focused on transforming
DekelOil into a multi-project, multi-commodity agricultural
company, one which has diverse revenue streams that are not overly
reliant on any one region or any one commodity. It is in this
context that our recently secured option to acquire 58% of a cashew
processing project in Tiebissou and the commencement of work at our
second vertically integrated palm oil project at Guitry ought to be
seen. While the poor harvest has resulted in a challenging half
year period, we believe the prospects for DekelOil are excellent,
and I look forward to providing further updates on progress made
across our growing portfolio of agricultural projects in West
Africa."
** ENDS **
For further information please visit the Company's website
www.dekeloil.com or contact:
DekelOil Public Limited
Youval Rasin
Shai Kol
Lincoln Moore +44 (0) 207 236 1177
Cantor Fitzgerald Europe (NOMAD and
Joint Broker)
David Foreman
Richard Salmond +44 (0) 207 894 7000
VSA Capital (Joint Broker)
Andrew Monk (Corporate Broking) +44 (0) 203 005
Andrew Raca (Corporate Finance) 5000
Optiva Securities Limited (Joint Broker)
Christian Dennis
Jeremy King +44 (0) 203 137 1903
St Brides Partners Ltd (Investor Relations)
Megan Dennison
Frank Buhagiar +44 (0) 207 236 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.
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END
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