TIDMDKL
RNS Number : 2735E
Dekel Agri-Vision PLC
10 March 2022
Dekel Agri-Vision Plc / Index: AIM / Epic: DKL / Sector: Food
Producers
Dekel Agri-Vision Plc ('Dekel' or the 'Company')
February 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 February production
update for its Ayenouan palm oil project in Côte d'Ivoire, 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 Highlight s
Palm Oil Project
-- The Crude Palm Oil ('CPO') high season, which normally ramps
up in February, has yet to commence therefore in line with the
guidance we provided last month our CPO production is 40.8% lower
than February last year. Local experts who carry out fruit bunch
counts and fruit ripening assessments currently estimate the high
season to commence in April. In terms of agronomic conditions,
there has been no material differences in rainfall and sunlight
hours noted over the past 12 months to pin point any specific
reasons for the seasonal variations which also included materially
higher FFB volumes than normal in the second half of 2021.
-- CPO of EUR979 per tonne achieved in February 2022, a 23.6%
increase compared to February 2021
o In the past two weeks international CPO prices have spiked to
all-time record levels of approximately EUR1,700.
-- CPO extraction rate increased 1 percentage point from January
to 22.3% and was 0.5 percentage points higher than February
2021.
-- Palm Kernel Oil ('PKO') prices also continued their strong
momentum following the commencement of exports achieving EUR1,447
per tonne in February 2022, an 86.0% increase compared to February
2021.
o In the past two weeks international prices have spiked to
all-time record levels of approximately EUR2,200.
Cashew Project
-- Production from the Cashew project continued at approximately
15% of production capacity in January 2022 and final equipment
delivery timings which will allow full production to commence
remain in April.
Feb-22 Feb-21 Change
Fresh Fruit Bunches ('FFB')
processed (tonnes) 13,683 23,638 -42.1%
CPO production (tonnes) 3,057 5,163 -40.8%
CPO Sales (tonnes) 3,660 4,754 -23.0%
Average CPO price per tonne EUR979 EUR 792 23.6%
PKO production (tonnes) 259 270 -4.1%
PKO Sales (tonnes) 407 406 0.2%
Average PKO price per tonne EUR1,447 EUR 778 86.0%
PKC production (tonnes) 402 390 3.1%
PKC Sales (tonnes) 366 299 22.4%
Average PKC price per tonne EUR85 EUR 69 23.2%
CPO Production
-- Following five consecutive months of production growth,
production in February, and we expect also March, will be lower
than last year. This lower level of current production is being
experienced nationwide and also in Ghana.
-- Local agronomy experts are seeing a shift in seasonality of
volumes this year and are expecting the high season will commence
later than normal in April from assessments of fruit bunch counts
on estates.
-- Revenue for the first two months of the year remains
materially higher than last year with the current lower levels of
production being more than offset by higher CPO extractions rates
and higher CPO and PKO prices
CPO Price
-- We have held a long-term view that supply levels of CPO,
which accounts for over 40% of all vegetable oil will struggle to
meet future demand resulting in a sustained period of higher
prices. This was already evident pre Covid-19 when CPO prices
started to materially increase.
-- Supply shocks relating to Covid-19 and now the devastating
conflict in Ukraine, the world's largest producer of sunflower oil,
has added to the supply challengers in the vegetable oil market
resulting in prices spiking even further to over EUR1,700 per
tonne. Whilst we expect prices may settle to a degree, we believe
supply challengers will continue and we expect CPO prices to remain
materially higher than the long-term average of EUR700 per tonne
for the foreseeable future
-- As previously announced, Côte d'Ivoire introduced price caps
during Covid-19 at around EUR900 per tonne to protect the local
market given CPO is a critical ingredient in food production.
However, due to market forces, we are currently selling at prices
around EUR1,025 - EUR1,050 per tonne.
-- The further spike in prices over the past two weeks has led
to a significant difference between local prices and international
prices. We are therefore assessing export options similar to the
strategy we executed with PKO should the CPO price differential
remain this large. This will be done while balancing our
obligations to local stakeholders.
-- Given the current disruption in global transportation and
logistics, in addition to the relatively low quantities Dekel
produces, exporting is not without its challenges. However, we are
currently in discussions with a number of groups to execute this
objective and we will keep the market informed.
CPO Sales
-- The Company currently has approximately 4,000tn of committed
sales within Côte d'Ivoire for March at approximately
EUR1,025-1,050 per tonne.
-- As outlined above, given the current price gap between local
prices and international prices that has arisen, particularly over
the past two weeks, we will limit our normal strategy of
pre-selling production with the goal of increasing our prices
closer to the international price
Palm Kernel Oil ('PKO') and Palm Kernel Cake ('PKC')
-- PKO Prices: 86% increase in PKO prices to EUR1,447 per tonne
compared to EUR778 in February 2021.
-- This is largely due to our success late last year identifying
African export alternatives for PKO at prices much higher than are
available in Côte d'Ivoire
-- Global prices have spiked further over the past two weeks. We
are assessing options to increase our prices further as outlined
above for CPO and will update the market on our progress
Cashew Project
-- The latest timeline provided by our Contractor remains
broadly the same as our previous announcement with the colour
sorter and shelling machines expected to be delivered in April. We
are assisting our contractor where we can to avoid unnecessary
further delays.
-- In the interim, the Cashew processing plant is continuing
operating well at a limited capacity and test cashew sales are
continuing locally.
-- We continue to receive strong support from our local
stakeholders. We announced last month our key debt provider, the
BIDC Bank, has extended the principal grace period of its c.EUR4.6m
loan from two to three years. The local co lenders NSIA bank who
provided a loan of EUR2.3m have also extended the principal grace
period by one year.
Lincoln Moore, Dekel 's Executive Director , said: "Short term,
we remain on track to deliver a second consecutive year of record
revenue despite the unusually late start to the high season. Based
on current market conditions, we anticipate our sales prices will
remain at record levels with the potential to increase further in
the coming months with international prices feeding into local
prices and the potential to export CPO at prices closer to the
international price, similar to our successful PKO export
strategy."
"In the medium term, it is our view CPO prices and food prices
in general will remain materially higher than long term averages
for the foreseeable future which is highly supportive of our
ongoing strategy to deliver a diversified agri-processing and
logistics business which we believe will deliver strong returns to
shareholders and provide vital support to our 1,000s of small
farmer partners."
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.
**S **
For further information please visit the Company's website
www.dekelagrivision.com or contact:
Dekel Agri-Vision Plc
Youval Rasin
Shai Kol
Lincoln Moore +44 (0) 207 236 1177
Arden Partners Plc (Nomad and Joint Broker)
Paul Shackleton / Ruari McGirr /
Elliot Mustoe (Corporate Finance) +44 (0) 207 614 5900
Optiva Securities Limited (Joint Broker)
Christian Dennis
Jeremy King +44 (0) 203 137 1903
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 crude
palm oil mill; a cashew processing project in Tiebissou, which
commenced production in early January 2021.
, 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.
RNS may use your IP address to confirm compliance with the terms
and conditions, to analyse how you engage with the information
contained in this communication, and to share such analysis on an
anonymised basis with others as part of our commercial services.
For further information about how RNS and the London Stock Exchange
use the personal data you provide us, please see our Privacy
Policy.
END
UPDJLMJTMTTMTTT
(END) Dow Jones Newswires
March 10, 2022 02:00 ET (07:00 GMT)
Dekel Agri-Vision (AQSE:DKL.GB)
Historical Stock Chart
From Jun 2024 to Jul 2024
Dekel Agri-Vision (AQSE:DKL.GB)
Historical Stock Chart
From Jul 2023 to Jul 2024