TIDMDKL
RNS Number : 5169Z
Dekel Agri-Vision PLC
13 January 2020
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.
Dekel Agri-Vision Plc / Index: AIM / Epic: DKL / Sector: Food
Producers
13 January 2020
Dekel Agri-Vision Plc ('Dekel' or the 'Company')
Full Year Production Update and
Issue of Equity
Dekel Agri-Vision Plc, the West African focused agriculture
company, is pleased to provide a production update for its
100%-owned vertically integrated Ayenouan palm oil project in Côte
d'Ivoire ('Ayenouan' or the 'Project') for the year ended 31
December 2019. Full year Crude Palm Oil ('CPO') production at the
Project totalled 37,649 tonnes in 2019, a 14% increase compared to
the 33,077 tonnes of CPO produced in 2018. Further details
regarding production and sales at the Project for Q4 and FY 2019
can be found in the table below.
The Company is also pleased to advise that global CPO prices
have increased significantly over the past three months and are
currently trading at approximately US$870 per tonne, a 70%+
increase on the sub US$500 levels seen in the summer of 2019. This
sharp increase in prices is now feeding into local Ivorian CPO
prices which are set monthly based on the proceeding five weeks
average CIF USD Rotterdam prices. As a result, Dekel's operations
at Ayenouan are expected to benefit from significantly higher CPO
prices during the upcoming peak period in H1 2020.
Q4 2019 Q4 2018 Change FY 2019 FY 2018 Change
FFB collected (tonnes) 19,437 24,903 -22% 176,019 146,036 +21%
CPO production (tonnes) 3,912 5,464 -28% 37,649 33,077 +14%
CPO sales (tonnes) 3,873 4,950 -22% 37,713 32,692 +15%
Average CPO price/tonne EUR534 EUR518 3% EUR491 EUR542 -9%
PKO production (tonnes) 339 598 -43% 2,773 2,918 -5%
PKO sales (tonnes) 262 803 -67% 2,621 2,862 -8%
Average PKO price/tonne EUR529 EUR633 -16% EUR551 EUR777 -29%
PKC production (tonnes) 623 843 -26% 4,305 3,721 +16%
PKC sales (tonnes) 624 848 -26% 4,357 3,796 +15%
Average PKC price/tonne EUR58 EUR55 +5% EUR56 EUR51 +10%
These figures remain subject to full year audit and year end
stock adjustments
Crude Palm Oil Production
-- 37,649 tonnes of CPO produced in 2019 (FY 2018: 33,077
tonnes), a year on year increase of 14%
o Follows 21% increase in fresh fruit bunches ('FFB') delivered
to the mill to 176,019 tonnes (2018: 146,036 tonnes)
-- A period of extremely high rainfall in September and October
combined with a weak low season to restrict Q4 2019 CPO production
to 3,912 tonnes (Q4 2018: 5,464 tonnes)
o 850ml of rainfall in Sept/Oct 2019, compared to the historic
average of 350ml for those two months, resulted in extended periods
of cloud cover which impacted fruit ripening, yields and the
overall quality of fruit delivered to the mill
o Dekel's agronomist team is seeing good fruit bunch numbers but
anticipate delays in fruit ripening which will result in a 4-6 week
delay in the super peak period of production in 2020, which
typically takes place in March, with overall levels of FFB for H1
2020 remaining similar to H1 2019
-- Q4 production brings H2 2019 volumes to 8,715 tonnes (H2 2018: 10,835 tonnes)
o Follows record H1 CPO production of 28,934 tonnes (H1 2018:
22,242 tonnes
-- Combination of major CPO price gains occurring in December
2019 and the five-week lag it takes for local pricing to reflect
moves in global benchmarks resulted in 3,873 tonnes of CPO being
sold at average prices of EUR534 per tonne in Q4
o CPO sales prices in Q1 2020 expected to increase each month in
line with the recent international price rises
o The average CPO sales price in January is currently EUR650
-- 21.4% extraction rate achieved in FY 2019 (FY 2018: 22.7%)
largely due to lower quality fruit during the low season and the
heavy rainfall in September and October 2019
o Extraction rate in December 2019 recovered to typical
levels
Palm Kernel Oil ('PKO') and Palm Kernel Cake ('PKC')
Production
-- 2019 PKO extraction rates also impacted by the low quality of
FFB in H2 2019 resulting in a 5% decrease in production for the
year compared to 2018
-- International PKO prices also increased significantly over
the past three months with international prices now well above
US$1,000 per tonne. As local PKO prices also tend to lag the
international market, the Company will assess storing PKO at least
in part to take advantage of the expected material ramp up in local
prices during the high season.
Large-scale cashew processing operation at Tiebissou
-- First production at initial 10,000 tonnes per annum raw
cashew nut processing facility on course for the end of 2020
-- Down payments completed to commence construction of the
Milling equipment and Earthworks contracts
-- Site clearance work was completed following the extended wet
season and earthworks are now advancing well in preparation for the
arrival of the first stage anchor and framework structure
materials
-- First shipment of anchor and framework structure materials is
scheduled for 20 January and is expected to arrive in Abidjan in
mid-March. The second shipment of anchor and framework structure
materials is scheduled to take place in March.
-- Milling equipment from Italy is scheduled for delivery over
four shipments commencing from April
DekelOil Executive Director Lincoln Moore said:
"With CPO trading at depressed levels of sub US$500 per tonne as
recently as the summer of 2019, the recovery in prices, whilst not
unexpected was eye-catching in terms of speed and strength. Due to
the peak harvest in Cote d'Ivoire falling in the first half and the
recovery in CPO prices only taking root in the latter months of the
year, the improved trading conditions will not be reflected in the
financial results for the year ended 31 December 2019. However,
with prices currently trading at US$870 per tonne and this year's
peak harvest season due to commence imminently, we expect to
deliver a substantial improvement in financial performance in
2020.
"During 2020 we will also continue laying the foundations for
future growth in 2021 and beyond with the ongoing construction of
the cashew processing facility. 2021 is expected to be the first
year to benefit from the large-scale cashew processing operations
at Tiebissou and as a result of attractive economics, a lack of
in-country processing capacity and strong underlying global market
drivers, Tiebissou has the potential to be a major income
generator. We do not intend to stop at two producing projects. As
the agreement with leading renewable energy company Green Enesys to
consider developing hybrid solar and biomass power projects
demonstrates, we are establishing a pipeline of new projects to
maintain the momentum behind the Company and in the process build a
portfolio of diversified revenue streams."
In addition, application has been made to the London Stock
Exchange for the admission of a total of 831,408 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 or around 22
January 2020. Following Admission, the Company's issued share
capital will consist of 423,895,851 Ordinary Shares.
** ENDS **
For further information please visit the Company's website at
www.dekeloil.com or contact:
DekelOil Agri-Vision PLC
Youval Rasin
Shai Kol
Lincoln Moore +44 (0) 207 236 1177
Cantor Fitzgerald Europe (Nomad and
Joint Broker)
David Foreman
Luke Philippou +44 (0) 207 894 7000
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:
Dekel Agri-Vision Plc is a multi-project, multi-commodity
agricultural company focused on West Africa. It has a portfolio of
projects in Cote 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 70,000tpa crude
palm oil mill; a cashew processing project in Tiebissou, which is
due to commence production in 2020; and a second palm oil project
in Guitry which is under development.
This information is provided by RNS, the news service of the
London Stock Exchange. RNS is approved by the Financial Conduct
Authority to act as a Primary Information Provider in the United
Kingdom. Terms and conditions relating to the use and distribution
of this information may apply. For further information, please
contact rns@lseg.com or visit www.rns.com.
END
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