April Palm Oil Production & Cashew Project Update

RNS Number : 8580K

Dekel Agri-Vision PLC

10 May 2022

 

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

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

April 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 an April 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 volumes have continued to remain weak in line with guidance provided in our announcement dated 10 March 2022, with April 2022 production 42.4% lower than April 2021.

o  Our agronomist currently advises that low recent rainfall has continued to delay the typical ripening timing of fresh fruit bunches ('FFB') and they remain cautiously optimistic we will see some improvement in the shortfall of monthly FFB over the next two months, provided the levels of rainfall increase over the coming weeks. 

· CPO sales quantities in April 2022 were lower as a percentage of production than April 2021 as we seek to carefully manage sales in order to maximise prices, given local Ivory Coast prices continue to remain materially lower than international prices.

· CPO prices achieved continue to strengthen with prices of €1,061 per tonne achieved in April 2022, a 32.1% increase compared to April 2021. In addition, PKO prices remain significantly higher than the prior year with prices achieved of €1,448, a 72.8% increase compared to April 2021.

· CPO extraction rate continued its higher trend at 22.5% in April 2022, 1.1 percentage points higher than April 2021.

· Overall, despite the weak FFB volumes, the Company is delivering a strong year-to-date financial performance driven by high CPO and Palm Kernel Oil ('PKO') prices, in addition to the relatively greater extraction rate compared to prior year.

Cashew Project

· Colour sorter due to arrive in the coming weeks and the shelling machines shortly thereafter which will enable Dekel to significantly increase production.

	Apr-22	Apr-21	Change
FFB processed (tonnes)	13,168	24,010	-45.2%
CPO production (tonnes)	2,965	5,147	-42.4%
CPO sales (tonnes)	1,788	4,971	-64.0%
Average CPO price per tonne	€1,061	€803	32.1%
PKO production (tonnes)	197	322	-38.8%
PKO sales (tonnes)	212	216	-1.9%
Average PKO price per tonne	€1,448	€838	72.8%
Palm Kernel Cake ('PKC') production (tonnes)	300	529	-43.3%
PKC sales (tonnes)	61	349	-82.5%
Average PKC price per tonne	€97	€80	21.3%

CPO Production

· The local region continues to experience a relatively weak high season compared to 2021. With the benefit of further local market intelligence, we can confirm this is the case throughout the eastern part of Côte d'Ivoire and further to the east in Ghana. The western part of Côte d'Ivoire and Liberia are now experiencing more typical high season volumes.

· Local agronomists advise that weak recent rainfall is delaying the timing of the FFB ripening process. There remain quite healthy levels of FFB on estates which may lead to some uplift in FFB.  However, we also expect that given the relatively low high season volumes, competition for FFB will also be strong and our guidance is H1 2022 production will be materially softer than last year.

· We will continue to update the market monthly and provide forward guidance where appropriate.

CPO and PKO Price

· International CPO prices continue to remain significantly higher than local prices.  We are now pleased to confirm we are accessing regional export markets which resulted in a 7.5% increase in CPO sales prices in April 2022 compared to March 2022.

· We anticipate our CPO prices for May 2022 should continue to gradually increase from our strategy to partially utilise export markets where appropriate, while balancing our obligations to local stakeholders.

· International PKO prices have recently stabilised at approximately €1,800-€1,850 cif Rotterdam. Our current ex-factory prices achieved of over €1,400 remain healthy and over 70% higher than last year.

CPO Sales

· CPO Sales were low due to both the weak volumes and the continuing strategy to manage our sales quantities carefully with the goal of increasing our prices closer to the international price.

Cashew Project

· A colour sorter is scheduled to arrive from China on 25 May 2022 with customs release, transportation to site and commissioning expected to take place in approximately 3 weeks.

· The first 11 of the 21 shelling machines are scheduled to be shipped from Italy in late May.  15 shelling machines are required to operate at full capacity.

· Importantly, the arrival of the colour sorter together with the utilisation of the shelling machines we have on site should see production gradually increase to over 50% of full capacity in June 2022.

· Whilst the Company's main supplier has experienced logistical challenges, particularly in relation to raw materials and shipping, it is pleasing to see we are now getting closer to completing the commissioning of the Cashew Project which is an important part of the Company's short and medium term growth strategy.

Lincoln Moore, Dekel 's Executive Director , said: "The recent monthly trend of weak FFB volumes being largely offset by continued strong CPO and PKO sales prices, in addition to a relatively strong CPO extraction rate has continued in April 2022. Whilst there is cautious optimism we may see some improvement in the recent monthly shortfall of FFB volumes compared to prior years over the next two months, we also remain focused on areas we control, specifically maximising our prices and completing the delivery of the Cashew Project.

"We would also like to take this opportunity to welcome our new nominated advisor and joint broker, WH Ireland Ltd, and we look forward to working with their team on executing our strategy to increase the scale and diversification of our agri-processing and logistics operations in Côte d'Ivoire. "

This announcement contains inside information for the purposes of Article 7 of the UK version of Regulation (EU) No 596/2014 which is part of UK law by virtue of the European Union (Withdrawal) Act 2018, as amended ("MAR"). Upon the publication of this announcement via a Regulatory Information Service, this inside information is now considered to be in the public domain.

** ENDS **

For further information please visit the Company's website www.dekelagrivision.com or contact:

Dekel Agri-Vision Plc Youval Rasin Shai Kol Lincoln Moore	[phone]
WH Ireland Ltd  (Nomad and Joint Broker) James Joyce Ben Good	[phone]
Optiva Securities Limited (Joint Broker) Christian Dennis Daniel Ingram	[phone]

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 capacity crude palm oil mill and a cashew processing project in Tiebissou, which commenced production in early January 2022. 

 

END

 

 

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