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| Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
|---|---|---|---|---|---|
| Dekel Agri-Vision Plc | AQSE:DKL.GB | Aquis Stock Exchange | Ordinary Share | CY0106502111 |
| Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
|---|---|---|---|---|---|---|---|---|---|---|
| 0.00 | 0.00% | 1.25 | 1.10 | 1.40 | 1.25 | 1.25 | 1.25 | 0.00 | 07:00:22 |
| Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
|---|---|---|---|---|---|
| 0 | 0 | N/A | 0 |
From May 2023 to May 2024
TIDMDKL
RNS Number : 8971N
Dekel Agri-Vision PLC
28 September 2023
28 September 2023
Dekel Agri-Vision Plc / Index: AIM / Epic: DKL / Sector: Food Producers
Dekel Agri-Vision Plc
('Dekel', the 'Company' or the 'Group')
2023 Interim Results and Investor Presentation
Dekel Agri-Vision Plc (AIM: DKL) , the West African agribusiness company focused on building a portfolio of sustainable and diversified projects, is pleased is to announce its unaudited interim results for the six months ended 30 June 2023.
The Company will be hosting an investor presentation in the form of a Q&A session at 12.30 p.m. UK time on 11 October 2023. The call will be hosted by Lincoln Moore (Executive Director), Youval Rasin (CEO) and Shai Kol (Deputy CEO and CFO), who will discuss the interim results and provide an update on activity across its portfolio of projects. Further information about the call can be found at the end of this announcement.
Key Highlights
Palm Oil Operation
-- H1 2022 revenue of EUR20.7m, a 5.1% increase from EUR19.7m in H1 2022 - includes sales of CPO, Palm Kernel Oil ('PKO'), Palm Kernel Cake ('PKC') and Nursery Plants
-- We achieved a 49% increase in H1 2023 CPO production compared to H1 2022, however, the H1 2022 gross margin - EUR3.5m, EBITDA - EUR2.3m and net profit after tax EUR1.2m were below H1 2022 comparisons due to the timing difference of a high volume of sales occurring post H1 2023 due to the late and strong production high season:
o H1 2023 CPO inventory of 4,870 tonnes compared to 650 tonnes at H1 2022
o H1 2023 PKO inventory of 1,080 tonnes compared to 300 tonnes at H2 2022
-- H1 2023 stock on hand has been sold in H2 2023 and whilst CPO and PKO prices traded lower than the record prices in 2022, our current sales prices remain historically strong and together with continued strong production H2 2023 is currently tracking significantly ahead of H2 2022.
Cashew Operation
-- The Cashew Operation commenced commercial operations in H1 2023 recording first revenue of EUR0.6m and a loss after tax of EUR1.1m. The loss is due to daily production volumes achieved being below operational capacity during the ramp-up phase of the operation.
-- The Cashew Operation production volumes continue to gradually improve in H2 2023 which should drive improvement in financial outcomes.
-- The other main value drivers of the Cashew Operation including the price of Raw Cashew Nut ('RCN'), the Cashew extraction rate and sales prices are delivering in line with expectations.
Financial Highlights
Hot Features
Premium
Six months ended 30 June H1 2023 H1 2022
Palm Oil Operation
---------- ----------
Revenue EUR20.7m EUR19.7m
---------- ----------
Gross Margin EUR3.8m EUR5.0m
---------- ----------
Gross Margin % 17.4% 25.4%
---------- ----------
EBITDA EUR3.3m EUR4.2m
---------- ----------
Net profit / (loss) after tax EUR1.5m EUR2.5m
---------- ----------
Cashew Operation
---------- ----------
Revenue EUR0.6m nil
---------- ----------
Gross Margin (EUR0.4m) n/a
---------- ----------
EBITDA (EUR0.8m) n/a
---------- ----------
Net profit/ (loss) after tax (EUR1.1m) (EUR0.2m)
---------- ----------
Dekel Group
---------- ----------
Revenue EUR21.3m EUR19.7m
---------- ----------
EBITDA EUR2.5m EUR4.0m
---------- ----------
Dekel Group Net profit / (loss) after
tax EUR0.4m EUR2.3m
---------- ----------
Operational Highlights - Palm Oil Operation
-- The Palm Oil Operation experienced a significantly stronger high season compared to H1 2022 with Fresh Fruit Bunch ('FFB') volumes and Crude Palm Oil ('CPO') production increasing 52.1% and 49.0% respectively compared to H1 2022.
-- CPO sales quantities increased 22.4% in H1 2023 compared to last year. Given the high season arrived much later than normal our CPO stock levels at the end of H1 2023 are much higher than typical at over 4,800tn.
-- The H1 2023 average CPO sales price achieved was historically strong at EUR934 per tonne, albeit 7.8% below the record H1 2022 CPO sales price.
-- The CPO extraction rate for H1 2023 of 21.9% was slightly lower than H2 2022 but remains well in line with expectations.
H1-2023 H1-2022 Change
FFB processed (tonnes) 114,745 75,448 52.1%
CPO Extraction Rate 21.9% 22.4% -2.2%
CPO production (tonnes) 25,166 16,893 49.0%
CPO Sales (tonnes) 20,758 16,966 22.4%
Average CPO price per tonne EUR934 EUR1,013 -7.8%
Palm Kernel Oil ('PKO')
production (tonnes) 1,442 1,162 24.1%
PKO Sales (tonnes) 515 1,180 -56.3%
Average PKO price per tonne EUR947 EUR1,454 -34.9%
Operational Highlights - Cashew Operation
-- The Cashew Operation achieved a number of key milestones during H1 2023 including, increasing ownership to 100%, commencing commercial operations, first operational sales and post period end completing the BRC global food standard assessment.
-- The ramp up of daily production whilst slower than expected, is continually increasing which should be reflected in the upcoming Q3 2023 production volumes.
-- All other key elements of the value chain from raw material purchasing to sales prices with the exception of daily production volumes are in line with expectations.
H1-2023
RCN Inventory
Opening RCN Inventory (tonnes) 1,841
RCN Purchased (tonnes) 1,378
RCN Processed (tonnes) 759
Closing RCN Inventory (tonnes) 2,460
Cashew Processing
Opening Cashews (tonnes) 111
RCN Processed (tonnes) 759
Cashew Extraction Rate 23.3%
Cashew Produced (tonnes) 177
Cashew Sales (tonnes) 170
Closing Cashews (tonnes) 118
Average Sales prices per
tonne
* Unpeeled Cashews EUR3,500
* Peeled Cashews EUR4,500
Lincoln Moore, Dekel 's Executive Director , said: "The Palm Oil Operation is experiencing potentially its best year in terms of both relatively strong production volumes and sales price which sets up a strong full year financial performance. The Cashew Operation has significant upside as daily production volumes continue to increase since transitioning to commercial production in early 2023 and we look forward to seeing the benefits of both operations working well in tandem as 2023 progresses".
Conference Call
The Company is pleased to announce that Youval Rasin CEO, Shai Kol CFO and Lincoln Moore Executive Director will provide a live Investor Presentation via Investor Meet Company on 11th Oct 2023 at 12:30pm BST.
The presentation is open to all existing and potential shareholders. Questions can be submitted pre-event via your Investor Meet Company dashboard up until 9am the day before the meeting or at any time during the live presentation.
Investors can sign up to Investor Meet Company for free and add to meet DEKEL AGRI-VISION PLC via:
https://www.investormeetcompany.com/dekel-agri-vision-plc/register-investor
Investors who already follow DEKEL AGRI-VISION PLC on the Investor Meet Company platform will automatically be invited.
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.
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 WH Ireland Ltd (Nomad and Joint Broker) James Joyce Darshan Patel Isaac Hooper +44 (0) 20 7220 1666 Optiva Securities Limited (Joint Broker) Christian Dennis Daniel Ingram +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 capacity crude palm oil mill and a cashew processing project in Tiebissou, which is currently transitioning to full commercial production in 2023.
CHAIRMAN'S STATEMENT
Palm Oil Operation
Although the production high season commenced later than typical, we saw an excellent period of production from March to June 2023 which culminated in an increase in CPO production of 49% in H1 2023 compared to H1 2022. The period of relatively high CPO production has continued into H2 where in September 2023 we expect to record our 8(th) consecutive month of higher like for like production compared to 2022. The improvement in production volumes is largely due to a much stronger FFB harvesting season compared to 2022 and a period of smooth operating performance from our logistics and milling teams who have been able to take full advantage of improved market volumes. CPO sales volumes in H1 2023 also increased 22.4% compared to H1 2022 although the strong and late timing of the high season meant we held over 4,000tn of additional CPO stock at the end of H1 2023. This stock has been sold subsequent to half year end and we are tracking to achieve annual CPO production and sales volumes close to record levels in 2023.
International CPO and PKO sales prices traded well above historically averages, albeit lower than the record levels achieved in 2022. International CPO prices currently sit at around EUR875-900 per tonne and whilst we have seen some recent pressure on our local CPO prices largely due to high inventory levels resulting from the late strong high season, CPO prices currently remain very supporting for our Palm Oil Operation.
The combined balance of relatively strong CPO production and relatively high CPO prices positions the Palm Oil Operation very well to exceed our record 2021 results.
Cashew Operation
The Cashew Operation achieved a number of key milestones during H1 2023 including commencing commercial operations, first operational sales and post period end completing the BRC global food standard assessment. All other key elements of the value chain from raw material purchasing to sales prices with the exception of daily production volumes are in line with expectations. The ramp up of daily production has been slower than we would like due to teething problems particularly in the shelling and peeling machinery. We are however seeing gradual improvement which should be reflected in the upcoming Q3 2023 production volumes data and we are hopeful to see a move towards operational profitability in Q4 2023.
As previously stated, the Cashew Operation is integral to our short and medium term growth plans. It has a nameplate capacity of 15,000 tonnes per annum ('tpa'), production at the plant can be ramped up by 50% at no extra cost by simply increasing the number of shifts from two to three per day. From 15,000tpa and at a capex cost of EUR5-6 million, the mill's capacity can be doubled to 30,000tpa, which the Directors estimate could generate revenues in the region of approximately EUR35 million per annum based on current prices.
Other Projects
Whilst we have further expansion plans, including the processing of a third commodity in addition to clean energy aspirations, these projects are on hold as we focus on enhancing the production volumes of the Cashew Operation.
Group Financial
A summary of the financial performance for H1 2023, in addition to the comparatives for the previous 5 years, is outlined in the table below.
H1 2023 H1 2022 H1 2021 H1 2020 H1 2019 H1 2018
CPO production (tonnes) 25,166 16,893 26,515 23,882 28,934 22,242
---------- ---------- ---------- ---------- ---------- ----------
Average CPO price
per tonne EUR934 EUR1,013 EUR817 EUR602 EUR505 EUR549
---------- ---------- ---------- ---------- ---------- ----------
Total Revenue (all
products) EUR21.3m EUR19.7m EUR21.7m EUR15.4m EUR14.6m EUR14.1m
---------- ---------- ---------- ---------- ---------- ----------
Gross Margin EUR3.4m EUR5.0m EUR4.9m EUR2.6m EUR2.3m EUR2.1m
---------- ---------- ---------- ---------- ---------- ----------
Gross Margin % 15.5% 25.4% 22.6% 16.9% 15.8% 14.9%
---------- ---------- ---------- ---------- ---------- ----------
Overheads (EUR1.8m) (EUR1.7m) (EUR1.7m) (EUR1.4m) (EUR1.5m) (EUR1.6m)
---------- ---------- ---------- ---------- ---------- ----------
EBITDA EUR2.5m EUR4.0m EUR3.9m EUR1.9m EUR1.4m EUR1.1m
---------- ---------- ---------- ---------- ---------- ----------
Net Profit / (Loss)
After Tax EUR0.4m EUR2.3m EUR2.0m EUR0.5m (EUR0.1m) (EUR0.5m)
---------- ---------- ---------- ---------- ---------- ----------
Dekel achieved H1 2023 EBITDA of EUR2.2m and net profit after tax of EUR0.4m compared to EUR4m EBITDA and EUR2.3m net profit after tax in H1 2022. This result was driven by:
-- A decrease in the H1 2023 Palm Oil Operation EBITDA was largely due to timing differences associated with the sale of significant quantities of H1 2023 CPO and PKO production taking place after H1 2023 period end. Conversely the significant increase in sales volumes in H2 2023 should set up a strong H2 2023 compared to H2 2022.
-- A decrease in CPO and PKO selling prices in H1 2023 compared to record prices in achieved in H1 2022 as well as a small decrease in the CPO extraction rate.
-- The commercial commencement of the Cashew Operation in 2023 meaning previous costs which were capitalised pre commercial production being recorded as operational costs resulting in an increase in the Net loss .
Outlook
In the past, we have seen the Palm Oil operation have periods of strong pricing and weak volumes or vice versa. 2023 is arguably the best year we have seen in terms of both relatively strong volumes and pricing which sets us up for a strong financial performance. The Cashew Operation has significant upside as daily production volumes continue to improve and we look forward to seeing the benefits of both operations working well in tandem as quickly as possible.
I would like to thank the Board, Management, our employees and advisers for their support and hard work over the course of the year.
Andrew Tillery
Non-Executive Chairman Date: 27 September 2023
CONSOLIDATED STATEMENTS OF FINANCIAL POSITION
30 June 31 December
2023 2022
--------- -----------
Unaudited Audited
--------- -----------
Euros in thousands
----------------------
ASSETS
CURRENT ASSETS:
Cash and cash equivalents 212 2,240
Trade receivables 881 1,568
Inventories 6,556 3,158
Deposits in banks 898 679
Accounts and other receivables 1,593 950
--------- -----------
Total current assets 10,140 8,595
--------- -----------
NON-CURRENT ASSETS:
Deposits in banks 878 850
Property and equipment, net 46,140 45,235
--------- -----------
Total non-current assets 47,018 46,085
--------- -----------
Total assets 57,158 54,680
========= ===========
The accompanying notes are an integral part of the consolidated financial statements.
CONSOLIDATED STATEMENTS OF FINANCIAL POSITION
30 June 31 December
2023 2022
--------- -----------
Unaudited Audited
--------- -----------
Euros in thousands
----------------------
LIABILITIES AND EQUITY
CURRENT LIABILITIES:
Short-term loans and current maturities of
long-term loans 5,098 5,671
Trade payables 3 ,676 1,359
Advance payments from customers 704 346
Other accounts payable and accrued expenses 4,626 3,852
--------- -----------
Total current liabilities 14,104 11,228
--------- -----------
NON-CURRENT LIABILITIES:
Long-term lease liabilities 128 128
Accrued severance pay, net 122 127
Loan from shareholder 654 630
Long-term loans 26,448 27,241
--------- -----------
Total non-current liabilities 27,352 28,126
--------- -----------
Total liabilities 41,456 39,354
--------- -----------
EQUITY ATTRIBUTABLE TO EQUITY HOLDERS OF THE
COMPANY
Share capital 177 177
Additional paid-in capital 40,736 40,736
Accumulated deficit (18,428) (18,804)
Capital reserve 2,532 2,532
Capital reserve from transactions with non-controlling
interests (9,315) (9,315)
--------- -----------
15,702 15,326
Total equity 15,702 15,326
--------- -----------
Total liabilities and equity 57,158 54,680
========= ===========
The accompanying notes are an integral part of the interim consolidated financial statements.
,
27 Sept 2023
-----------------
Date of approval Youval Rasin Yehoshua Shai Lincoln John Moore
of the financial Director and Chief Kol Director and Executive Director
statements Executive Officer Chief Finance
Officer
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
Six months ended Year ended
30 June 31 December
------------------ ------------
2023 2022 2022
-------- -------- ------------
Unaudited Audited
------------------ ------------
Euros in thousands
(except per share amounts)
--------------------------------
Revenues 21,332 19,661 31,205
Cost of revenues 17,887 14,651 26,185
-------- -------- ------------
Gross profit 3,445 5,010 5,020
General and administrative 1,847 1,650 3,845
-------- -------- ------------
Operating profit 1,598 3,360 1,175
Other income - - 103
Finance cost 1,185 881 2,475
-------- -------- ------------
Income (loss) before taxes on income 413 2,479 (1,197)
Taxes on income 37 196 141
-------- -------- ------------
Net income (loss) and total comprehensive
income (loss) 376 2,283 (1,338)
======== ======== ============
Attributed to:
Equity holders of the Company 376 2,338 (833)
Non-controlling interest - (55) (505)
-------- -------- ------------
376 2,283 (1,338)
======== ======== ============
Income per share attributable to equity
holders of the Company (in Euros):
Basic and diluted income per share 0.00 0.00 0.00
======== ======== ============
The accompanying notes are an integral part of the interim consolidated financial statements.
CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY
Attributable to equity holders of the Company
----------------------------------------------------------------------
Capital
reserve
from
transactions
Additional with
Share paid-in Accumulated Capital non-controlling Total
capital capital deficit reserve interests Total equity
-------- ---------- ----------- -------- ---------------- ------- -------
Euros in thousands
----------------------------------------------------------------------------------
Balance as of 1
January 2023
(audited) 177 40,736 (18,804) 2,532 (9,315) 15,326 15,326
Net income and
total
comprehensive
income - - 376 - - 376 376
Balance as of 30
June 2023 (18, 428
(unaudited) 177 40,736 ) 2,532 (9,315) 15, 702 15, 702
======== ========== =========== ======== ================ ======= =======
Attributable to equity holders of the Company
------------------------------------------------------------------
Capital
reserve
from
transactions
Additional with Non -
Share paid-in Accumulated Capital non-controlling controlling Total
capital capital deficit reserve interests Total interest equity
------- ---------- ----------- ------- --------------- ------ ----------- ------
Euros in thousands
---------------------------------------------------------------------------------------
Balance as of 1
January 2022
(audited) 170 39,985 (17,971) 2,532 (8,710) 16,006 329 16,335
Net income and
total
comprehensive
income - - 2,338 - - 2,338 (55) 2,283
Issuance of
shares - *) 49 - - - 49 - 49
Balance as of
30
June 2022
(unaudited) 170 40,034 (15,633) 2,532 (8,710) 18,393 274 18,667
======= ========== =========== ======= =============== ====== =========== ======
The accompanying notes are an integral part of the interim consolidated financial statements.
CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY
Attributable to equity holders of the Company
------------------------------------------------------------------
Capital
reserve
from
transactions
Additional with Non -
Share paid-in Accumulated Capital non-controlling controlling Total
capital capital deficit reserve interests Total interest equity
------- ---------- ----------- ------- --------------- ------ ----------- -------
Euros in thousands
----------------------------------------------------------------------------------------
Balance as of 1
January 2022
(audited) 170 39,985 (17,971) 2,532 (8,710) 16,006 329 16,335
Net loss and
total
comprehensive
loss - - (833) - - (833) (505) (1,338)
Issue of shares
for services
provided - 4 9 - - - 4 9 - 4 9
Issue of shares
upon acquisition
of
non-controlling
interests 7 70 2 - - (605) 10 4 176 28 0
Balance as of 31
December 2022
(audited) 177 40,736 (18,804) 2,532 (9,315) 15,326 - 15,326
======= ========== =========== ======= =============== ====== =========== =======
The accompanying notes are an integral part of the interim consolidated financial statements.
CONSOLIDATED STATEMENTS OF CASH FLOWS
Six months ended Year ended
30 June 31 December
------------------ ------------
2023 2022 2022
---------- ------ ------------
Unaudited Audited
------------------ ------------
Euros in thousands
--------------------------------
Cash flows from operating activities:
Net income (loss) 376 2,283 (1,338)
Adjustments to reconcile net income(loss)
to net cash provided by operating
activities:
Adjustments to the profit or loss
items:
Depreciation 873 679 1,554
Finance expense, net 1,178 898 1,421
Change in employee benefit liabilities,
net (5) 44 (8)
Gain from sale of property and equipment - - (103)
Changes in asset and liability items:
Decrease (increase) in inventories (3,398) (130) 82
Decrease (increase) in trade receivables 687
Decrease (increase) in accounts and
other receivables (606) 1,628 (531)
Decrease in bank deposit - 222 -
Increase (decrease) in trade payables 2,317 (567) 28
Increase in advance from customers 358 726 238
Increase (decrease) in accrued expenses
and other accounts payable 774 (72) 1,206
---------- ------ ------------
2,178 3,428 3,887
---------- ------ ------------
Cash paid during the period for:
Income taxes (37) - (135)
Interest (1,174) (898) (1,848)
---------- ------ ------------
(1, 211
) (898) (1,983)
---------- ------ ------------
Net cash provided by operating activities 1,343 4,813 566
---------- ------ ------------
The accompanying notes are an integral part of the interim consolidated financial statements.
CONSOLIDATED STATEMENTS OF CASH FLOWS
Six months ended Year ended
30 June 31 December
------------------
2023 2022 2022
-------- -------- ------------
Unaudited Audited
------------------ ------------
Euros in thousands
--------------------------------
Cash flows from investing activities:
Increase in deposits (227) - (433)
Sale of property and equipment - - 206
Purchase of property and equipment (1,778) (2,573) (2,566)
-------- -------- ------------
Net cash used in investing activities (2,005) (2,573) (2,793)
-------- -------- ------------
Cash flows from financing activities:
Long-term lease - (130) (41)
Receipt (payment) of short-term loans,
net 399 (2,279) (1,668)
Receipt of long-term loans - 520 10,577
Repayment of long-term loans (1,765) (1,218) (5,995)
-------- -------- ------------
Net cash provided by (used in) financing
activities (1,366) (3,107) 2,873
-------- -------- ------------
Increase (decrease) in cash and cash
equivalents (2,028) (867) 645
Cash and cash equivalents at beginning
of period 2,240 1,595 1,595
-------- -------- ------------
Cash and cash equivalents at end of
period 212 756 2,240
======== ======== ============
Supplemental disclosure of non-cash
activities:
Issuance of shares in consideration
for investment in Pearlside - 403 714
======== ======== ============
The accompanying notes are an integral part of the interim consolidated financial statements.
NOTE 1:- GENERAL
a. These financial statements have been prepared in a condensed format as of 30 June 2023, and for the six months then ended ("interim consolidated financial statements"). These financial statements should be read in conjunction with the Company's annual financial statements as of 31 December 2022 and for the year then ended and accompanying notes ("annual consolidated financial statements").
b. Dekel Agri-Vision PLC (the "Company") is a public limited company incorporated in Cyprus on 24 October 2007. The Company's Ordinary shares are admitted for trading on the AIM, a market operated by the London Stock Exchange. The Company is engaged through its subsidiaries in developing and cultivating palm oil plantations in Cote d'Ivoire for the purpose of producing and marketing Crude Palm Oil ("CPO"), as well as constructing a Raw Cashew Nut ("RCN") processing plant, which is currently in the initial production phase.. The Company's registered office is in Limassol, Cyprus.
c. CS DekelOil Siva Ltd. ("DekelOil Siva") a company incorporated in Cyprus, is a wholly-owned subsidiary of the Company. DekelOil CI SA, a subsidiary in Cote d'Ivoire currently held 99.85% by DekelOil Siva, is engaged in developing and cultivating palm oil plantations for the purpose of producing and marketing CPO. DekelOil CI SA constructed and is currently operating its palm oil mill.
d. Pearlside Holdings Ltd. ("Pearlside") a company incorporated in Cyprus, is a wholly-owned subsidiary of the Company. Pearlside has a wholly-owned subsidiary in Cote d'Ivoire, Capro CI SA ("Capro"). Capro is currently engaged in the initial production phase of its RCN processing plant in Cote d'Ivoire near the village of Tiebissou.
e. DekelOil Consulting Ltd. a company located in Israel and a wholly-owned subsidiary of DekelOil Siva and is engaged in providing services to the Company and its subsidiaries.
NOTE 1:- GENERAL (Cont.) f. Cash flow from operations and working capital deficiency.
As of 30 June 2023, the Group has a working capital deficiency of EUR4 million (EUR2.6 million as of 31 December 2022). The Palm Oil operation is performing well in 2023 recording operating profit of EUR2.8 million (including depreciation of EUR0.8 millions) for the 6 months ending 30 June 2023 (see also note 3 operating segments). When combined with record inventory levels of CPO and PKO on 30 June 2023 due to the strong late palm oil high season, Palm Oil operation is expected to generate close to record operating profit and generate material operating cash flows for the full year ending 31 December 2023. In addition, the Cashew Operation is gradually increasing daily production and is forecast to deliver positive operating cash flows in the coming months. The Group has prepared detailed forecasted cash flows through the end of 2024, which indicate that the Group should have positive cash flows from its Group operations. However, the operations of the Group are subject to various market conditions, including quantity and quality of fruit harvests and market prices that are not under the Group's control that could have an adverse effect on the Group's future cash flows.
Based on the above, the Company's management believes it will have sufficient funds necessary to continue its operations and to meet its obligations as they become due for at least a period of twelve months from the date of approval of the financial statements.
NOTE 2:- SIGNIFICANT ACCOUNTING POLICIES a. Basis of preparation of the interim consolidated financial statements:
The interim consolidated financial statements have been prepared in accordance with IAS 34, "Interim Financial Reporting".
The significant accounting policies applied in the preparation of the interim consolidated financial statements are consistent with those followed in the preparation of the annual consolidated financial statements for the year ended 31 December 2022, except as described in c. below.
b. Fair value of financial instruments:
The carrying amounts of the Company's financial instruments approximate their fair value.
NOTE 2:- SIGNIFICANT ACCOUNTING POLICIES (Cont.) c. Initial adoption of amendments to existing financial reporting and accounting standards: 1. Amendment to IAS 8, "Accounting Policies, Changes to Accounting Estimates and Errors":
In February 2021, the IASB issued an amendment to IAS 8, "Accounting Policies, Changes to Accounting Estimates and Errors" ("the Amendment"), in which it introduces a new definition of "accounting estimates".
Accounting estimates are defined as "monetary amounts in financial statements that are subject to measurement uncertainty". The Amendment clarifies the distinction between changes in accounting estimates and changes in accounting policies and the correction of errors.
The Amendment is to be applied prospectively for annual reporting periods beginning on or after 1 January 2023 and is applicable to changes in accounting policies and changes in accounting estimates that occur on or after the start of that period.
The application of the Amendment did not have a material impact on the Company's interim financial statements.
2. Amendment to IAS 12, "Income Taxes":
In May 2021, the IASB issued an amendment to IAS 12, "Income Taxes" ("IAS 12"), which narrows the scope of the initial recognition exception under IAS 12.15 and IAS 12.24 ("the Amendment").
According to the recognition guidelines of deferred tax assets and liabilities, IAS 12 excludes recognition of deferred tax assets and liabilities in respect of certain temporary differences arising from the initial recognition of certain transactions. This exception is referred to as the "initial recognition exception". The Amendment narrows the scope of the initial recognition exception and clarifies that it does not apply to the recognition of deferred tax assets and liabilities arising from transactions that are not a business combination and that give rise to equal taxable and deductible temporary differences, even if they meet the other criteria of the initial recognition exception.
The Amendment is effective for annual reporting periods beginning on or after 1 January 2023. In relation to leases and decommissioning obligations, the Amendment is applied commencing from the earliest reporting period presented in the financial statements in which the Amendment is initially applied. The cumulative effect of the initial application of the Amendment is recognized as an adjustment to the opening balance of retained earnings (or another component of equity, as appropriate) at that date.
The application of the Amendment did not have a material impact on the Company's interim financial statements.
NOTE 2:- SIGNIFICANT ACCOUNTING POLICIES (Cont.) 3. Amendment to IAS 1 - Disclosure of Accounting Policies:
In February 2021, the IASB issued an amendment to IAS 1, "Presentation of Financial Statements" ("the Amendment"), which replaces the requirement to disclose 'significant' accounting policies with a requirement to disclose 'material' accounting policies. One of the main reasons for the Amendment is the absence of a definition of the term 'significant' in IFRS whereas the term 'material' is defined in several standards and particularly in IAS 1.
The Amendment is effective for annual periods beginning on or after 1 January 2023.
The above Amendment did not have an effect on the Company's interim consolidated financial statements. However, the Company is evaluating whether the Amendment will affect the disclosures of accounting policies in the Company's annual consolidated financial statements.
NOTE 3:- OPERATING SEGMENTS a. General:
The operating segments are identified based on information that is reviewed by the Company's management to make decisions about resources to be allocated and assess its performance. Accordingly, for management purposes, the Group is organized into two operating segments based on the two business units the Group has. The two business units are incorporated under two separate subsidiaries of the Company, the CPO production unit is incorporated under CS DekelOil Siva Ltd and its subsidiary and the RCN processing plant in commissioning stage is incorporated under Pearlside Holdings Ltd and its subsidiary.
Segment performance (segment income (loss)) and the segment assets and liabilities are derived from the financial statements of each separate group of entities as described above. Unallocated items are mainly the Group's headquarter costs .
NOTE 3:- OPERATING SEGMENTS (Cont.)
b. Reporting operating segments:
Crude Palm Raw Cashew
Oil Nut Unallocated Total
---------- ---------- ----------- -------
Euros in thousands
Six months ended
30 June 2023 (unaudited):
Revenues-External
customers 20,718 614 - 21,332
========== ========== =========== =======
Segment operating
profit (loss) 2,801 (666) (537) 1,598
========== ========== =========== =======
Finance cost (1,038) (118) (29) (1,185)
Profit (loss) before
taxes on income 1,763 (784) (566) 413
---------- ---------- ----------- -------
Depreciation 774 88 11 873
---------- ---------- ----------- -------
Crude Palm Raw Cashew
Oil Nut Unallocated Total
---------- ---------- ----------- ------
Euros in thousands
-------------------------------------------
Six months ended
30 June 2022 (unaudited):
Revenues-External
customers 19,661 - - 19,661
========== ========== =========== ======
Segment profit
(loss) 3,742 (188) (195) 3,359
Finance cost (833) (47) - (880)
Profit before taxes
on income 2,909 (235) (195) 2,479
Depreciation (679) - - (679)
Crude Palm Raw Cashew
Oil Nut Unallocated Total
---------- ---------- ----------- -------
Euros in thousands
Year ended 31
December 2022 (audited):
Revenues-External
customers 30,459 746 - 31,205
========== ========== =========== =======
Segment operating
profit (loss) 3,727 (1,430) (1,122) 1,175
========== ========== =========== =======
Finance cost (2,182) (265) (28) (2,475)
Other income 103 - - 103
---------- ---------- ----------- -------
Profit (loss) before
taxes on income 1,648 (1,695) (1,150) (1,197)
---------- ---------- ----------- -------
Depreciation 1,383 146 25 1,554
---------- ---------- ----------- -------
NOTE 3:- OPERATING SEGMENTS (Cont.)
Crude Palm Raw Cashew
Oil Nut Total
---------- ---------- ------
Euros in thousands
------------------------------
As of 30 June
2023 (unaudited):
Segment assets 38,182 18,976 57,158
========== ========== ======
Segment liabilities 31,281 10,175 41,456
========== ========== ======
As of 31 December
2022 (audited):
Segment assets 36,389 18,291 54,680
========== ========== ======
Segment liabilities 28,427 10,927 39,354
========== ========== ======
- - - - - - - - - - -
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END
IR PPUQPBUPWGQM
(END) Dow Jones Newswires
September 28, 2023 02:00 ET (06:00 GMT)
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