Dekel Agri-vision Share Discussion Threads

[outlawinvestor] 05/11/2020 20:56

Malaysian CPO futures today hit MYR 3211 and closed at MYR 3208.
The last time it came close to this level was in Dec 2016 when it peaked at MYR 3202.
The last time it traded above the level was in May 2012 when it dropped from MYR 3242.


Indian CPO futures extended its all time high and closed 2% up at INR 871.6.


Bodes well for DKL's Q4 particularly if FFB harvest is as good as last year.

[outlawinvestor] 05/11/2020 13:50

Yes, thank you @burtond1. In addition to @rivaldo's notes:

- External analysts value the 14.2% stake at €4.5 - €5 million
- 14.2% stake projected to eventually generate EBITDA of up to €2 million
- DKL goal is at least 65-70% stake in cashew project and maximise exposure in future.
- Arden likely to post updated note with price upgrade once transaction completes.

[rivaldo] 05/11/2020 10:43

Cheers burtond1...highlights:

- with CPO price now up to $800, palm oil will have "improved materially" on last year
- to get back to the previous £40m m/cap DKL would have to achieve €6m EBITDA
- in 2017, with similar CPO prices to now, DKL achieved €4.7m EBITDA
- cashews have the potential to achieve higher EBITDA than the palm oil division
- for the two divisions combined it loooks like well over €10m+ EBITDA is the target

[burtond1] 05/11/2020 07:46

Time for the @DekelAgriVision share price to go nuts?"...Dekel Agri-Vision's cashew nut project presents a low hanging opportunity for finances and investors ..."Here, @copytaster catches up with #DKL Managing Director Lincoln Moore to expand more...https://total-market-solutions.com/2020/11/05/dekel-agri-vision_november-2020/

[rivaldo] 04/11/2020 15:17

The CPO price is now up to $800....

[2vdm] 04/11/2020 07:38

Thanks outlaw. Makes sense.

[rightnellie] 03/11/2020 15:40

Thanks outlaw -useful and detailed analysis

[rivaldo] 03/11/2020 14:24

I note that CPO Futures are now at multi-year highs:



Nice summary OutlawInvestor. Today's deal values DKL's 52% of the cashew nut JV at around £2.4m, leaving the rest of DKL's activities worth just over £7m at the current m/cap. That's pretty minimal imo.

Especially if you go by the valuation mentioned in today's RNS, which imply a valuation of €9m for the JV and therefore €4.7m for DKL's 52% share.

[outlawinvestor] 03/11/2020 11:40

Dilutes the shares a bit

I don't really think it is dilutive but of course that depends on how one defines dilution.

DKL is effectively receiving (roughly) €2 for £1 - 14% of €9m in exchange for 6% of £9.5m. It's like adding two parts cordial and one part water to the jug! In a way one could say Concordia was paying a premium for DKL shares.

At the same time one can see the undervaluation of DKL: Pearlside has a PBV of 4.5 (€9m for €2m NAV) as at 30-Jun, and the PBV for European "Food Producers" sector was 3.6 in Jan-20. This deal however is based on a PBV of 1.6 on par with the current FTSE Food Producers sector and miles better than the market cap implied multiple.

One final note for me is that the deal underscores the execution quality of DKL's board and not for the first time. IMO the quality of the team is in and of itself a reason some institutional investors should be inclined to take a position via the secondary market rather than waiting for a placing.

[edit]
Correction on FTSE Food Producers PBV - currently 1.6 not 2.2 as earlier stated.

[rightnellie] 03/11/2020 11:06

Dilutes the shares a bit but better to have control of the cashew nut project I suppose

[chadders] 03/11/2020 11:02

Tidy business.

[outlawinvestor] 03/11/2020 09:47

Acquisition of controlling stake in cashew project



Dekel Agri-Vision Plc Executive Director Lincoln Moore said: "With construction advancing well,, we believe this is the right time to deliver on our long-standing objective to secure a controlling interest in the Cashew Project at Tiebissou which we believe has taken place on materially accretive terms for Dekel.

"This Acquisition serves to demonstrate that Dekel's strategy both to diversify and scale its operations is coming to fruition. We look forward to continuing to update shareholders with the advancing construction works at the Cashew Project over the coming months."

All paper transaction - 28,551,800 shares (6.3%) issued to Concordia Corporation Ltd for additional 14.2% stake in Pearlside. The swap effectively values DKL at c. €21.3 million.

[chadders] 30/10/2020 09:32

Well that's the good news regarding the third shipment as expected. October update next...

[chadders] 28/10/2020 08:59

CPO now at $790 a tonne

[chadders] 27/10/2020 11:35

Should get an update on the third Cashew equipment shipment any time now. CPO prices and futures going well and October update due in a fortnight. All the ducks lining up nicely. At some point investors will wake up. I'm a long term holder and no advice intended.

[harvey8888] 27/10/2020 01:51

Until a broker decides to get behind this and find an institutional buyer I fear we will be subject to small purchases on both the buyer and the seller side. No real price moves will be the result. DKL is too small and below the radar.

[chadders] 26/10/2020 09:40

I share the frustration but how much of the current share price decline is down to bad management?

January share price was 3.5p and since then we've had CPO price drop to below $500 a tonne due to Covid and the share price followed the decline. The CPO price has since risen more than 50% to $775 a tonne, the company has returned to profitability, the Cashew nut project is progressing well, the debt has been restructured on significantly better terms, AgDevCo is onboard and production has been maintained during Covid etc etc.The share price is down 40% over the same period and has not followed the CPO price back up - the key parameter for performance and profitability...makes no sense on any level.

In my view there are a few occasions when poor share price performance cannot be blamed on management but this is one.

[2vdm] 26/10/2020 08:43

Me too, but I've loaded up as I think it will recover. Palm oil price up and main season still to come. Cashew plant due to be commissioned early next year. Reasonable chance to recover losses imo.

[lyceeuk] 25/10/2020 16:26

well managed for who?.they have taken the share price from 14.5p to 2.25p in 3 years.gutted long term holder

[chadders] 23/10/2020 16:06

rightnellie,yes clearly undervalued but suffering particularly from small sells that have a disproportionate effect on the share price

I've not particularly looked at cashews but there must be a chart out there.

It is a well managed company but has suffered in my opinion from over promising and under delivering in the past. However I now reckon lessons have been learned and we're ahead of the curve.

[rightnellie] 23/10/2020 10:21

It would be nice, Chadders, if more people started noticing the palm oil price rises. I've already filled my boots with these shares. Is there a similar graph for cashew nut prices? We should be seeing the prodution of those by Spring 2021. Seemingly a well managed company with a sensible, steady plan for diversification and growth. Cheap as chips at present.

[chadders] 23/10/2020 09:57

Up again to $775