TIDMDKL
RNS Number : 7262M
Dekeloil Public Limited
10 January 2019
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
10 January 2019
DekelOil Public Limited ('DekelOil' or the 'Company')
Full Year Production Update
DekelOil Public Limited, the West African focused agricultural
company, is pleased to provide a production update for its
100%-owned vertically integrated Ayenouan palm oil project in Côte
d'Ivoire (the 'Project') for the year ended 31 December 2018.
Full year Crude Palm Oil ('CPO') production at the Project
totalled 33,077 tonnes in 2018. This represents a 14.6% decrease in
CPO volumes compared to the previous year mainly due to the weak
peak harvesting season experienced across the region in H1 2018, as
previously announced by the Company. Palm Kernel Oil ('PKO') and
Palm Kernel Cake ('PKC') production increased significantly as a
result of concerted efforts to bring in greater levels of external
kernels, which partially mitigated the lower CPO production.
Importantly, despite weak international CPO pricing conditions
during the year, DekelOil continued to achieve pricing premiums on
its CPO sales.
Q4 2018 Q4 2017 Change FY 2018 FY 2017 Change
FFB collected (tonnes) 24,903 32,364 -23.1% 146,036 171,696 -14.9%
CPO production (tonnes) 5,464 7,055 -22.6% 33,077 38,736 -14.6%
CPO sales (tonnes) 4,950 6,586 -24.8% 32,692 38,373 -14.8%
PKO production (tonnes) 598 442 +35.3% 2,918 2,554 +14.3%
PKO sales (tonnes) 803 544 +47.7% 2,862 2,570 +11.4%
PKC production (tonnes) 843 578 +45.8% 3,721 3,444 +8.0%
PKC sales (tonnes) 848 433 +95.8% 3,796 3,330 +14.0%
These figures remain subject to full year audit and year end
stock adjustments
Crude Palm Oil Production
-- 33,077 tonnes of CPO produced in 2018 (FY 2017: 38,736 tonnes), a 14.6% reduction due to:
o Q4 2018 CPO production of 5,464 tonnes was lower than the
record Q4 CPO volumes recorded in 2017 which were in turn driven by
unseasonably high volumes of fresh fruit bunches ('FFB') harvested
across the region in Q4 2017. However, Q4 2018 production of 5,464
tonnes was 15.3% higher than CPO production achieved in Q4
2016.
o CPO production in H2 2018 represents a more normal seasonal
level of production compared to the challenging conditions
experienced in H1 2018 - 10,835 tonnes of CPO produced in H2 2018
(H2 2017: 11,789 tonnes)
o Production of 22,242 tonnes of CPO in H1 2018 compared to
26,947 in H1 2017 following poor region-wide FFB harvest during
2018 peak season
-- CPO sold at average prices of EUR517 in Q4, an 18.6% premium
to international prices of EUR436, resulting in quarter-on-quarter
improvement in Q4 2018 gross margins compared to Q3 2018
o Driven by increased local demand following expansion in key
customers' refining capacity
o Premiums are expected to continue into Q1 2019 particularly if
low global prices persist
-- 22.7% extraction rate achieved in FY 2018 (FY 2017: 22.6%)
remains stronger than DekelOil's competitors
Palm Kernel Oil ('PKO') and Palm Kernel Cake ('PKC')
Production
-- Significant success in increasing PKO and PKC production in
Q4 2018 due to successful efforts to aggressively purchase raw
kernel from other mills to counter challenging FFB conditions
experienced in 2018
o 35% increase in PKO production to 598 tonnes in Q4 2018 (Q4
2017: 442 tonnes)
o 46% increase in PKC production to 843 tonnes in Q4 2018 (Q4
2017: 578 tonnes)
o 48% increase in Q4 2018 PKO sales compared with Q4 2017
o 96% increase in Q4 2018 PKC sales compared with Q4 2017
Preparations for 2019 Peak Harvesting Season
-- A fourth logistics centre located to the south of the mill
recently established to facilitate delivery of fruit to the mill
and increase DekelOil's market share of FFB in this region
-- All routine mill maintenance work programmes on track to be
completed in time for the 2019 high season
DekelOil Executive Director Lincoln Moore said:
"In terms of the peak harvesting season, 2018 was a challenging
year for the industry in Cote d'Ivoire with volumes of fruit
available for processing significantly lower than the previous
year, resulting in today's reported drop in full year CPO
production. Having seen a normalisation in seasonal patterns in the
second half, we are optimistic the recovery will extend into 2019
and beyond. We have been working hard to ensure DekelOil secures as
much available fruit as possible in the upcoming high season and we
are working with our customers to maximise sales prices for our
CPO. The establishment of a fourth logistics centre, the premium
prices secured for our CPO and the step-up in PKO and PKC
production ought to be viewed against this backdrop. With the above
in mind, we are looking forward to the commencement of the 2019
high season.
"In terms of corporate development, 2018 was a landmark year for
the Company. Notably, our acquisition of an initial 43.8% stake in
the large scale Tiebissou cashew processing project in Cote
d'Ivoire has accelerated our strategy to transform DekelOil into a
multi-project, multi-commodity agricultural company focused on West
Africa with diverse and scalable revenue streams. With construction
of an initial 10,000tpa cashew processing plant due to be
completed, and first revenues expected, by early 2020, the year
ahead is on course to be the last in which all our revenues are
generated from just one commodity. This is an exciting period in
the development of DekelOil as a leading West African focused
agricultural company and I look forward to providing further
updates on our progress in the year ahead."
** ENDS **
For further information please visit the Company's website at
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)
Frank Buhagiar
Cosima Akerman +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 including its
recent 43.8% investment in a cashew processing company. 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
capacity of 1 million seedlings per year.
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contact rns@lseg.com or visit www.rns.com.
END
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