Dekel Agri-vision Share Discussion Threads

[outlawinvestor] 06/10/2020 09:27

Latest corporate presentation based on HY20 results posted on website.

hxxps://dekelagrivision.com/ul/Interim%20Results%20Presentation%202020.pdf

[chadders] 05/10/2020 16:16

From the August update...

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


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

[chadders] 05/10/2020 15:50

September and Q3 update due soon. Allowing for the 5 to 6 week lag to international prices I am expecting DKL average share price to be north of $700. Since the beginning of August CPO has mostly been well above $700 per tonne apart from a short spell when it dipped to $680 but then climbed rapidly to $780.

[outlawinvestor] 05/10/2020 11:28

As if on cue, published today:

In Defense of Palm Oil: Why We Should Be Supporting the Industry’s Move Toward Sustainability – Not Demonizing It

hxxps://nextbillion.net/palm-oil-sustainability-agriculture-tech-environment/

[tradertrev] 05/10/2020 08:34

harvey, Unilever and other large food cos have generally signed up to the RTSPO to ensure their products only use/contain sustainable palm oil. As I understand it, the scheme is driven by the food cos such that CPO producers have to comply in order to be able to do business with these large cos. That is why this is a big deal for DKL.

[chadders] 04/10/2020 12:39

harvey888, as I understand it DKL have their own palm oil estates and they also outsource to small generally local growers but they process FFB from further afield courtesy of their collection hubs dotted around. For independent growers a fixed formula is used to calculate the price paid for FFB based on the international CPO price which I think is Rotterdam..but not 100% sure about that bit.

[harvey8888] 03/10/2020 20:03

One of the issues that remains unclear to me is the margin benefit of a vertically integrated and owned plantation versus buying from out growers. The former I understand that DKl will benefit from any increase in the CPO price whereas outgrowers I assume are looking for a market rate for their FFB. Hence, my guess is that outgrowers are less risky but have less opportunity for gross margin expansion. DKL should also be looked at as an ESG investment given their work with the Round Table for Sustainable Palm Oil. If consumers realised that Palm Oil was in their food, soap and cosmetics and that large amounts come from uncontrolled "slash and burn" growers that are poorly regulated they might be very disappointed in their product. More education needed here. Unulever and other CPG companies should make sure their CPO supplies are coming from susuatinable eithical farms.

[chadders] 01/10/2020 14:59

CPO currently at $750 a tonne.

[chadders] 01/10/2020 10:36

Thanks for that rivaldo. If as you hinted at earlier the CPO price remains at $700+ DKL ought to comfortably beat Arden's numbers and smash master investors numbers.

[rivaldo] 01/10/2020 08:28

Nice review overnight on Master Investor by Mark Watson-Mitchell:



"Dekel Agri-Vison (LON:DKL) – Ready to harvest a higher price?

Wow, did you see the dealing volumes over the last few days, several times the 315,000 daily average figure? Over 1.3m yesterday.

Yesterday’s interim results statement goes some way to underline the reasons for such investor interest in the little palm oil and cashew plantation group.

Revenues for the six months to end-June were up 5.5% to €15.4m, with EBITDA some 36% better at €1.9m, and the company recording a net profit after tax of €0.4m against a minus €0.1m previously.

Generally, the first half is the strongest which is why brokers Arden are estimating a full year €1.9m loss adjusted pre-tax.

But next year they estimate that the pre-tax adjusted loss will be down to just €0.7m – however, by then it will be showing an adjusted operating profit of €0.5m, which is very positive indeed for the group, as it is still in a very early stage of its growth.

Arden have put out a 7.6p per share objective, which is more than twice my own aim. So much more upside to go for with the shares closing at 2.75p up 10% on yesterday’s interim news."

[chadders] 29/9/2020 15:39

Seems to have been a bigger emphasis this time on the additional plantations since 2012/13 and their coming to fruition. A march towards 60000 tonnes pa of CPO would have a very significant impact at current and historical price norms.

September monthly and Q3 update due soon so with luck current momentum can be sustained.

[chadders] 29/9/2020 15:10

Cheers Pug. I guess you rarely get surprised on the downside then as you come across as a glass half empty guy. Good luck anyhow and hopefully we've seen the bottom.

[rivaldo] 29/9/2020 13:45

It's worth noting that Arden's forecasts this year are predicated on a CPO price in H2 of €575, or $672.

The CPO price has been above $672 ever since mid-July, and in fact well above it in August and September, currently at around $745.

If the CPO price now drops back to $672 and stays around there for the last 3 months of the year, then DKL may beat expectations quite nicely assuming FFB volumes etc continue to be good as indicated today.

[pugugly] 29/9/2020 13:05

chadders Long - No facilites to go short -

[rivaldo] 29/9/2020 12:04

Thanks for the Arden update OutlawInvestor.

Quite some upside to 7.65p :o))

[chadders] 29/9/2020 11:15

Pug, thanks for that. That's two of us then at least...long or short?

[outlawinvestor] 29/9/2020 11:11

From Arden Partners morning note:

We are not making any changes to our forecasts. For FY2020E, we forecast FFBs processed of 154,785MT, CPO sold of 33,883MT and an average CPO price for the year of €575/MT. We forecast FY2020E revenue of €21.9m, EBITDA of €0.8m, a post tax loss of -€1.99m and EPS of -0.5 Euro cents.

On the basis of our sum of parts valuation we value the company at 7.6p per share, equivalent a market capitalisation of £32.2m. This compares with the current share price of 2.45p and a market cap of £10.4m. We maintan our Buy recommendation.

hxxps://research.arden-partners.com/portal/portal.html#/home

[pugugly] 29/9/2020 11:04

chadders - yes significant -

[chadders] 29/9/2020 10:09

You have a position in this Pug? Pretty feeble attempt at a deramp matey.

Excellent results good to see surprise on the upside for a change.

[rivaldo] 29/9/2020 09:43

Buys almost equating to sells so far today, and the total sells are only just over £10k anyway!

More to the point, any selling is being mopped up nicely without a problem. Which indicates that there's decent background demand out there. WHY?!!

Perhaps something to do with this morning's rather good results and outlook.

[pugugly] 29/9/2020 09:32

seller around unloading in 6 figure slugs - Looks to be taking advantage of the results. I wonder how much they have left to unload and WHY?

[tradertrev] 29/9/2020 09:12

Don't disagree at all. If they can bring the mooted and known projects on line without further share issuance the shares look like a multi-bagger.
I might even make all my money back!

[rivaldo] 29/9/2020 07:58

Excellent stuff in the H1 results.....$1.9m EBITDA in H1 - and a $0.46m profit before tax :o))

Plus higher extraction rates being continued into H2, with CPO prices much higher than in H1.

The cashew preparations are now going well and will be producing in March-June next year, so not long to go. Plus DKL will be able to take advantage of the high production season from February as it can store its purchases for later production.

The balance sheet could do with some improvement, but current CPO prices and sales should help nicely.

At a mere £10m m/cap things are about as optimistic as they can be at present methinks.

[outlawinvestor] 27/9/2020 09:26

@mr doughnut1 - thanks for tolerating me on my soapbox!

You're absolutely right about patience being the key here. The estate planting undertaken the past should just about start reaching maturity although it will never yield enough to achieve mill capacity of 60,000 MT CPO. The difficulty in acquiring significant contiguous plantation acreage close to Ayenouan means they will always be dependent on smallholders and cooperatives with inferior yields and competing interests.

I'm keen to hear more about the new commodity planned for processing at Ayenouan which should drive up mill utilisation. I really hope it is coconut oil since it is very high value.