Dekel Agri-Vision PLC September Palm Oil & Q3 Cashew Operation Update (4812P)

TIDMDKL

RNS Number : 4812P

Dekel Agri-Vision PLC

10 October 2023

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.

10 October 2023

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

Dekel Agri-Vision Plc

('Dekel' or the 'Company')

September Palm Oil Production & Q3 2023 Cashew Operation 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 its Q3 2023 production for the Ayenouan palm oil project in Côte d'Ivoire ('Palm Oil Operation') and the cashew processing plant at Tiebissou, Côte d'Ivoire (the 'Cashew Operation').

Palm Oil Operation Update

-- The Palm Oil Operation continued to deliver strong volumes during Q3 2023 with Fresh Fruit Bunch ('FFB') volumes and Crude Palm Oil ('CPO') production increasing 90.7% and 78.4% respectively compared to Q3 2022. This was also our 7(th) successive month of significantly higher production compared to 2022.

-- CPO sales quantities increased 192.4% in Q3 2023 compared to last year. A large portion of the higher than normal CPO inventory at the end of H1 2023 (due to the late high season), has now been successfully sold and inventory levels have normalised.

-- The Q3 2023 average CPO sales price achieved was EUR817 per tonne, a 20.1% decrease from the record Q3 2023 CPO sales prices. The local CPO price in September 2023 increased slightly to EUR822 per tonne despite some softening of the international CPO price from c.EUR900 per tonne to c.EUR850 per tonne as local stock levels start to tighten following the strong production high season.

-- The CPO extraction rate for Q3 2023 of 19.3% was slightly lower than Q3 2022, albeit we saw an improvement in the extraction rate in September to 19.8%.

-- Overall, largely due to the 192.2% increase in CPO sales volumes in Q3 2023 compared to Q3 2022, we maintain overview our guidance that H2 2023 is well positioned to materially outperform H2 2022.

 
                            Sept-23    Sept-22   Change   Q3-2023    Q3-2022   Change 
 
 FFB processed (tonnes)      10,866      6,074    78.9%    30,084     15,777    90.7% 
 CPO Extraction Rate          19.8%      21.3%    -7.0%     19.3%      20.6%    -6.3% 
 CPO production (tonnes)      2,149      1,296    65.8%     5,797      3,249    78.4% 
 CPO Sales (tonnes)           2,734      1,076   154.1%    10,143      3,471   192.2% 
 Average CPO price 
  per tonne                  EUR822   EUR1,030   -20.2%       817      1,022   -20.1% 
 Palm Kernel Oil ('PKO') 
  production (tonnes)            97        105    -7.6%       489        286    71.0% 
 PKO Sales (tonnes)             105         53    98.1%     1,463        464   215.3% 
 Average PKO price 
  per tonne                  EUR838   EUR1,176   -28.7%    EUR783   EUR1,372   -42.9% 
 

Cashew Operation Update

-- The volume of Raw Cashew Nut ('RCN') processed in Q3 2023 increased 134.5% compared to Q2 2023. This was due to gradual improvements in the production value chain and less operational interruption following the successful completion of the BRC Global Food standard assessment which took place in Q2 2023.

-- Whilst we have seen improvements in daily processing levels, the performance of various items of equipment provided by our Italian supplier remain below technical specifications, most notably the peeling and shelling machinery. We have taken further actions to supplement the Italian equipment including ordering additional shelling machines from an external party which are expected to be installed in November 2023. We have successfully used these alternate shelling machines when initially awaiting delayed equipment from the Italian supplier and the installation of these machines should drive a further a material increase in processing volumes.

-- 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.

 
                                    Q3-2023 
 
 RCN Inventory 
 Opening RCN Inventory (tonnes)       2,460 
 RCN Purchased (tonnes)                  41 
 RCN Processed (tonnes)                 530 
 Closing RCN Inventory (tonnes)       1,971 
 
 Cashew Processing 
 Opening Cashews (tonnes)               118 
 RCN Processed (tonnes)                 530 
 Cashew Extraction Rate               22.4% 
 Cashew Produced (tonnes)               119 
 Cashew Sales (tonnes)                   35 
 Closing Cashews (tonnes)               202 
 
 Average Sales prices per 
  tonne 
 
   *    Unpeeled Cashews           EUR3,300 
 
   *    Peeled Cashews             EUR4,500 
 
 

Lincoln Moore, Dekel 's Executive Director , said: "A 192% increase in Q3 CPO sales volumes compared to Q3 2022 has kicked off a very strong start to the H2 2023 financial performance of the Palm Oil Operation which is performing at close to record levels."

"It is pleasing to see a 134% increasing in the Cashew Operation processing rate compared to Q2 2023 and we are taking further measures to drive the next step up in production volumes over the coming months as we strive to enhance production volumes and deliver positive operating cashflow from the Cashew Operation."

** 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 
  Darshan Patel 
  Isaac Hooper                               [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 is currently transitioning to full commercial production in 2023.

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October 10, 2023 02:00 ET (06:00 GMT)