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Dekel Agri-Vision (DKL)

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Thursday 10 September, 2020

Dekel Agri-Vision

August 2020 Palm Oil Production Update

RNS Number : 5470Y
Dekel Agri-Vision PLC
10 September 2020
 

 

Dekel Agri-Vision Plc / Index: AIM / Epic: DKL / Sector: Food Producers

 

Dekel Agri-Vision Plc ('Dekel' or the 'Company')

August 2020 Palm Oil Production Update

 

Dekel Agri-Vision Plc, the West African focused agriculture company, is pleased to provide a production and sales update for its Ayenouan palm oil project in Côte d'Ivoire (the 'Project') for August 2020.  Year on year crude palm oil ('CPO') production rose 3.6% to 1,551 tonnes in August as materially higher extraction rates more than offset a 9.7% reduction in fresh fruit bunches ('FFB') delivered to the mill for processing.  Together with a 25.7% increase in global CPO prices for August 2020 (compared to August 2019), September 2020 is expected to see a continuation of the recent trend of improving year on year financial metrics.  A table providing a breakdown of production, sales and pricing levels achieved at Ayenouan during August 2020 is set out below.

 

As previously announced, the Company is issuing CPO production figures on a monthly basis to provide shareholders with increased visibility on operations and trading during the pandemic and associated market volatility.  The Company intends to continue providing monthly data until 30 September at which point it will consider reverting to quarterly data. 

 

August 2020 Production

 


Aug 2020

Aug 2019

Increase/

(decrease)

FFB processed (tonnes)

7,044

8,083

-12.85%

CPO production (tonnes)

1,551

1,497

3.61%

CPO sales (tonnes)

1,482

2,140

-30.75%

Average CPO price per tonne

€538

€428

25.70%

PKO production (tonnes)

101

197

-48.73%

PKO sales (tonnes)

203

442

-54.07%

Average PKO price per tonne

€554

€486

14.00%

PKC production (tonnes)

196

295

-33.56%

PKC sales (tonnes)

239

273

-12.45%

Average PKC price per tonne

€60

€56

7.14%

 

Production

· 3.61% increase in CPO produced at the mill in August 2020 to 1,551 tonnes (August 2019: 1,497 tonnes)

· Higher extraction rates due to higher oil content in FFB offset lower volumes of fruit delivered to the mill

o 22% extraction rate in Aug 2020 compared to 18.5% in Aug 2019

o Lower volumes of FFB delivered to the mill in line with experience of all operators in the region

· PKO and PKC production of 101 tonnes and 196 tonnes respectively - lower than Aug 2019 due to lower volumes of FFB delivered to the mill and lower outside kernel purchasing

 

Sales and Pricing

· Year on year CPO sales performance comparison continues to be distorted by the 3,000 tonnes of CPO which were held in storage in June 2019 and sold in Jul/Aug 2019

· 1,482 tonnes of CPO sold at average prices of €538 per tonne in Aug 2020 compares to 2,140 tonnes sold at €428 per tonne in Aug 2019

o 25.7% year on year increase in CPO prices reflects the 4-5 weeks it takes for local pricing to reflect the improvement in international benchmarks seen following the reopening of global markets

o Current international prices of CPO have traded around and over US$700 per tonne since late July 2020 which points to further improvement in CPO prices achieved at Ayenouan in September 2020

· Timings of sales and deliveries continue to distort PKO sales which came in lower at 203 tonnes in August 2020 compared to 442 tonnes in August 2020

o Currently 860tn of stock held which has been sold but has yet to leave the tanks - expected to have a very positive impact in next couple of months

 

Dekel Agri-Vision Executive Director Lincoln Moore said, "The theme of lower volumes, at least in terms of fruit delivered to the mill, being more than offset by significantly higher extraction rates and CPO prices continued in August 2020.  While it is too early to draw meaningful conclusions on the volumes of fruit delivered to the mill during September, Ayenouan's trading performance is expected to continue to benefit from the improving pricing environment.  We know this because CPO is currently trading at $730 which is materially higher than the reported average realised price for August.  The 4-5 week lag it takes for local prices to catch up with international benchmarks gives us confidence that September's realised prices will show an increase on the €538 per tonne achieved in August. 

 

"With the upcoming half year report expected to show a more profitable H1 financial performance compared to last year, and with the large scale cashew processing project on course to commence first production in Q2 2021, Dekel is entering an exciting period in its development and I look forward to providing further updates in due course." 

 

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.

 

** ENDS **

 

For further information please visit the Company's website at 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 /

Dan Gee-Summons (Corporate Finance)

Simon Johnson (Corporate Broking)

 

+44 (0) 207 614 5900

Optiva Securities Limited (Joint Broker)

Christian Dennis

Jeremy King

 

+44 (0) 203 137 1903

St Brides Partners Ltd (Investor Relations)

Frank Buhagiar

Cosima Akerman

Megan Dennison

+44 (0) 207 236 1177


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 including 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 and a cashew processing project in Tiebissou, which is due to commence production in Q2 2021. 

 

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