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Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
---|---|---|---|---|---|
Dekel Agri-vision Plc | LSE:DKL | London | Ordinary Share | CY0106502111 | ORD EUR0.0003367 (DI) |
Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|---|---|
-0.025 | -2.04% | 1.20 | 1.15 | 1.25 | 1.225 | 1.20 | 1.225 | 264,641 | 08:42:43 |
Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
---|---|---|---|---|---|
Veg Oil Mills,ex Corn & Oth | 31.21M | -833k | -0.0015 | -8.00 | 6.71M |
TIDMDKL
RNS Number : 3494A
Dekel Agri-Vision PLC
29 September 2020
Dekel Agri-Vision Plc / Index: AIM / Epic: DKL / Sector: Food Producers
Dekel Agri-Vision Plc ('Dekel' or the 'Company')
2020 Interim Results and Shareholder Call
Dekel Agri-Vision Plc, the West African focused agriculture company, is pleased to announce its interim results for the six months ended 30 June 2020.
The Company will be hosting a shareholder conference call at 1pm UK time on 6 October 2020. The call will be hosted by Executive Director, Lincoln Moore and Deputy CEO Shai Kol, 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, as well as in the presentation, which will be uploaded to the corporate website prior to the conference call.
Financial Overview
As set out in the table below, with Revenues up 5% to EUR15.4 million; EBITDA up 36% to EUR1.9million; net profits up from a loss of EUR0.1m to positive EUR0.4m - the Company's first half financial performance has been a highly creditable one, particularly when set against the backdrop of COVID-19.
H1 2020 H1 2019 % change Revenue EUR15.4m EUR14.6m 5.5% ---------- ---------- --------- Gross Margin EUR2.6m EUR2.3m 13.0% ---------- ---------- --------- Gross Margin % 16.8% 15.7% 7.0% ---------- ---------- --------- G&A (EUR1.4m) (EUR1.5m) 7.1% ---------- ---------- --------- EBITDA EUR1.9m EUR1.4m 35.7% ---------- ---------- --------- Net profit / (loss) after tax EUR0.4m (EUR0.1m) Na ---------- ---------- ---------
Production - palm oil project, Ayenouan Côte d'Ivoire
-- Stronger year on year global Crude Palm Oil ('CPO') prices and higher extraction rates more than offset lower CPO volumes produced and sold during H1 2020
-- 19.21% increase in average realised sales price of EUR602 per tonne of CPO (H1 2019: EUR505)
o CPO prices rallied strongly to over US$850 per tonne in January 2020 but quickly retraced back to as low as US$500 in response to COVID-19 before recently recovering to around US$730 today as global logistics reopened
-- Significantly higher extraction rates due to higher quality Fresh Fruit Bunches ('FFB') than last year particularly in Q2 2020 where the extraction rate achieved was 23.6% (Q2 2019 22.4%)
-- 23,882 tonnes of CPO produced in first half (H1 2019: 28,934 tonnes) follows 19.5% decrease in FFB delivered to mill to 106,188 tonnes (H1 2019: 131,917 tonnes) - in line with experience of other operators in the region
-- 23,906 tonnes of CPO sold in H1 2020 (H1 2019: 26,702 tonnes)
-- ESG milestones achieved include roll-out of fruit traceability programme across the region and maintaining 300 plus staffing levels at Ayenouan despite COVID-19
Development - cashew processing project at Tiebissou in Côte d'Ivoire
-- Construction now advancing well following a short delay in manufacture of equipment in China and Italy due to COVID-19
-- Production on course to commence in Q2 2021 at which point Tiebissou will become Dekel's second producing asset and provide exposure to the high margin global cashew market
-- Tiebissou expected to lead to step-up in Dekel's revenue and profitability as operations commence
New Ventures - proceeding cautiously due to COVID-19 and related market uncertainty
-- Hybrid power project - feasibility study being undertaken by JV partner Green Enesys on the development of a 30MW solar PV plant and a 5-6MW biomass plant using feedstock from Ayenouan
-- New commodity project - one venture in Côte d'Ivoire being actively considered as a new project for the Company following positive results of internal feasibility study
Dekel Executive Director Lincoln Moore said, "The six month review period has not only seen us navigate what must count among the most challenging conditions seen for generations as a result of COVID-19, but also post a material uplift in our EBITDA. With global crude palm oil prices currently trading back at traditional levels of around $750 per tonne level (compared to $550 this time last year) and the trend of higher extraction rates being maintained post period, we are extremely confident that our H2 2020 results will also show material improvement compared to H2 2019.
"Looking forward into 2021 we believe that the Company is well positioned to enter a period of sustained growth in financial performance. Together with the normalisation of palm oil prices, the other key catalyst behind the step-up in performance is the commencement of operations at Tiebissou and subsequent expansion in cashew processing capacity at the project first from 10,000tpa to 15,000tpa before doubling up to 30,000 tpa. This also does not include any contribution from our pipeline of projects which are being advanced cautiously in light of the current environment. We believe that despite the very challenging macro conditions we are positioned as well as ever to deliver on our objective to build a West African focused agro-industrial group, one which benefits all stakeholders including the local communities around which our business is centred, and I look forward to providing further updates on progress made."
Conference Call
To participate in the conference call to be held at 1pm UK time on 6 October 2020, please dial 0808 109 0701 , if you are calling from outside of the UK please dial +44 (0) 20 3003 2701 and enter participant pin 0044863# when prompted to do so. Please note that all lines will be muted with the exception of Company management, however the Company invites shareholders to submit questions to its public relations adviser, St Brides Partners Ltd, ahead of the call via email. Questions should be sent to shareholderenquiries@stbridespartners.co.uk .
An updated presentation will be uploaded to the Company's website on the morning of the call which will be referred to throughout the call.
If you have any problems accessing the call, please contact St Brides Partners Ltd on shareholderenquiries@stbridespartners.co.uk or call +44 (0) 20 7236 1177.
The information contained within this announcement is deemed by the Company to constitute inside information as stipulated under the Market Abuse Regulations (EU) No. 596/2014 ('MAR'). Upon the publication of this announcement via a Regulatory Information Service ("RIS"), this inside information is now considered to be in the public domain.
*S*
For further information please visit the Company's website at www.dekelagrivision.com or contact:
Dekel Agri-Vision Plc Youval Rasin Shai Kol Lincoln Moore +44 (0) 207 236 1177 Arden Partners Plc (Nomad and Joint Broker) Paul Shackleton / Ruari McGirr / Dan Gee-Summons (Corporate Finance) Simon Johnson (Corporate Broking) +44 (0) 207 614 5900 Optiva Securities Limited (Joint Broker) Christian Dennis Jeremy King +44 (0) 203 137 1903 St Brides Partners Ltd (Investor Relations) Frank Buhagiar Cosima Akerman Megan Dennison +44 (0) 207 236 1177
CHAIRMAN'S STATEMENT
Revenues up 5% to EUR15.4 million; EBITDA up 43% to EUR1.9million; net profits up from a loss of EUR0.1m to profit of EUR0.4 million - the Company's first half financial performance, specifically that of our producing project, the crude palm oil ('CPO') operation at Ayenouan, Cote d'Ivoire, has been a highly creditable one, particularly when set against the backdrop of COVID-19.
Of course, Dekel has not been immune to the coronavirus. The H1 2020 results would likely have shown much larger percentage increases than the above as the onset of the pandemic and the associated lockdowns around the world led to a sharp contraction in global demand for palm oil and the everyday food and personal care products that the vegetable oil is used in. This in turn caused a sharp reversal in CPO prices over the course of the six-month period. Having traded as high as US$850 per tonne at the turn of the year, prices retreated towards the US$500 level before staging a recovery to today's US$730 prices.
At our large-scale cashew processing project in Tiebissou, Cote d'Ivoire, the manufacture of infrastructure and milling equipment in China and Italy respectively was temporarily suspended and as a result, the target date for the commencement of operations has been pushed out to Q2 2021, a delay of approximately three months. Construction work at the site is now well underway and I am confident that when it comes to writing next year's half year statement, there will be two producing assets.
While the pandemic has affected the timelines for business development activities, I am pleased to report that it has, to date, not had a material adverse impact on our day to day operations. In response to the coronavirus, we quickly put in place a series of protocols and procedures in line with the prevailing government advice to ensure the wellbeing of our staff and the smallholders with whom we work closely with. Encouragingly, these have not affected operations at our palm oil project in Ayenouan and we take great pride in not having had to reduce local staffing numbers from the 300 plus level it was before the pandemic. The improved H1 financial performance, uninterrupted palm oil production operations, and the progress made at the cashew project underline the resilience of Dekel's operations in the face of unprecedented challenges. With the 10,000 tpa cashew processing operation at Tiebissou due to commence in Q2 2021, we are confident that by adding a second revenue stream and by diversifying our end markets, Dekel's
resilience is only going to get stronger.
Ayenouan Palm Oil Project
The table below shows the improved first half performance at Ayenouan compared to H1 2019. It also shows how over the last six years, our palm oil operation has consistently generated positive EBITDA and, during periods when global palm oil prices have traded in line with historic averages, material net profits after tax. At EUR602 per tonne, the average CPO price achieved during H1 2020 may well have been below long term historic levels of EUR700 plus per tonne, but it was still 19.2% higher than H1 2019's EUR505 average. This along with a much higher extraction rate compared to the previous year helped to offset lower volumes of CPO sold during the period (H1 2020: 23,906 tonnes / H1 2019: 26,702 tonnes). As mentioned earlier, the H1 2020 financial performance would have been even stronger had COVID-19 not caused CPO prices to fall back from US$850 per tonne in January 2020 to lows of US$500 per tonne. Encouragingly, as global logistics reopened following COVID-19 induced lockdowns, international palm oil prices have recovered to US$730 per tonne today.
H1 2020 H1 2019 H1 2018 H1 2017 H1 2016 H1 2015 EUR19.6 Revenue EUR15.4m EUR14.6m EUR14.1m m EUR16.0m EUR12.9m --------- ---------- ---------- -------- --------- --------- EBITDA EUR1.9m EUR1.4m EUR1.1m EUR3.7m EUR3.1m EUR2.3m --------- ---------- ---------- -------- --------- --------- Net profit / (loss) after tax EUR0.45m (EUR0.1m) (EUR0.5m) EUR2.4m EUR1.8m (EUR93k) --------- ---------- ---------- -------- --------- --------- FFB collected (tonnes) 106,188 131,917 96,195 117,706 123,157 90,879 --------- ---------- ---------- -------- --------- --------- CPO production (tonnes) 23,882 28,934 22,242 26,947 28,550 21,836 --------- ---------- ---------- -------- --------- --------- Average CPO price per tonne EUR602 EUR505 EUR549 EUR707 EUR542 EUR617 --------- ---------- ---------- -------- --------- ---------
Setting out key performance indicators covering the last six half year trading periods for Ayenouan, the table above is by its nature backward looking. The table does however provide insights into the future. Keeping in mind that the name plate capacity of the processing mill is 60,000 tonnes per annum, the CPO price has been at or below long term averages and that during the above six half year periods an average of 25,398 tonnes of CPO have been produced at the mill, there is clear potential to return to at least the H1 2017 levels in terms of financial results.
For a step-up in CPO production an increase in FFB supplied to the mill by local smallholders is required. This can be achieved in two ways, firstly via protecting and potentially increasing Ayenouan's share of the local market and secondly via an increase in volumes of fruit harvested in the region. On the first count, ever since operations commenced at Ayenouan, we have worked hard to foster close relationships with the local community to secure supplies - supplying discounted plants from our nursery; setting up logistics hubs to facilitate delivery of fruit to the mill; rolling out fertiliser programmes with innovative funding mechanisms to encourage the use of fertiliser at a manageable cost to the farmer. Initiatives such as these have seen Ayenouan go from a standing start in 2014 to becoming a major local producer of CPO. To kick on from here, a material increase in regional fruit production is required. 2012 saw the start of a major multi-year planting programme in the region. It takes on average 6-8 years for plants to mature, and so we are now entering a period when the benefits of all this planting ought to bear fruit. With strong relationships with the local community, critical infrastructure in place and proven logistics networks established, Ayenouan is in a strong position to capitalise on any increase in local fruit production.
To the list can be added the substantial we are carrying out to secure RSPO certification for Ayenouan including the implementation of a traceability programme for our farmers. COVID-19 has delayed the on site RSPO certification pre audit work expected to be conducted by Proforest, an Oxford-based environmental consultancy. Internally we believe we are now in a position to meet the RSPO certification process once field inspections and the pre audit and audit process can be undertaken. Once certified, Ayenouan will be one of the few operations in the region with the RSPO stamp of approval. Set against a backdrop of increasing scrutiny of ESG obligations, having RSPO certification will differentiate Dekel from a number of its non-ESG focused peers, thereby potentially highlighting our project as an attractive destination for fruit grown by local smallholders who share our principles. We know many already do, especially after the successful roll out of our fruit traceability programme across the region which has also helped to further enhance our relationships with local farmers.
Tiebissou Cashew Project
Increasing CPO volumes produced at Ayenouan is not the only route to driving material and sustainable profits growth at Dekel over the short to medium term. Commencing cashew processing operations at our Tiebissou project (currently Dekel holds a 43.8% interest) in Q2 2021 will provide a second material revenue stream for Dekel. With an initial annual capacity to process 10,000 tonnes of raw cashew nuts, we forecast Tiebissou will generate revenues similar to those at Ayenouan in the first full year of production. Crucially, processing cashews is expected to be a higher margin activity than producing CPO. Therefore, while group revenues have the potential to double next year, net profits can be expected to increase by an even larger quantum. We are confident of securing sufficient quantities of RCN which will in turn enable the plant to achieve full capacity in a relatively short timeframe. Unlike palm oil, there is a major shortfall in cashew processing capacity in Cote d'Ivoire, which is one of the world's largest producers of raw cashew nuts. For example in 2018 c. 750,000 MT of raw cashew nuts were produced in Cote d'Ivore but only around 70,000 MT or 9% were processed in-country. Whilst local processing capacity is increasing as other groups have identified this opportunity, we believe that supply of raw cashew nuts will outstrip demand for the foreseeable future.
Such is the size of the shortfall that the mill at Tiebissou is being developed in such a way that capacity can be increased significantly in short order. With a nameplate capacity of 15,000 tonnes per annum, 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. From 15,000tpa and at a cost of EUR5-6 million, the mill's capacity can be doubled to 30,000 tpa which we estimate could generate revenues in the region of EUR40 million per annum based on today's prices. For now, our focus is to bring Tiebissou online at a rate of 10,000tpa, before looking to increase this to 15,000tpa within 12-24 months and then using cashflows generated to expand the plant to 30,000tpa. Tiebissou will not only provide a one-off major boost to revenues and profits by adding another commodity to the portfolio, it will also provide us with a series of material step-ups in the Company's financial profile in the years ahead.
While COVID-19 led to a delay in the commencement of construction work, first production is on course for Q2 2021. This will not prevent the project from capitalising on the 2021 peak cashew season in Côte d'Ivoire which typically runs from February to May. Unlike palm fruit which perishes within days, raw cashew nuts can be purchased and stored for months, allowing processing to take place during the remainder of the year. We will therefore look to secure supplies during the 2021 peak season for processing throughout the year. As a result, we expect to see Tiebissou's transformative effect on the Company's bottom line.
Other projects
With Ayenouan firmly established and Tiebissou set to commence production in early 2021, low cost work continues to be carried out to put in place a pipeline of projects in line with our objective to build Dekel into a major West African focused agro-industrial business. Proceeding cautiously is the order of the day with regards to these plans given the current uncertain macro environment.
In December 2019, we signed a joint venture agreement with established renewable energy company Green Enesys Holdings to develop a hybrid power project ('HCTPP') in Côte d'Ivoire and since then a feasibility study has been initiated on the construction of a HCTPP comprising a 30MW solar PV plant and a 5-6MW biomass plant using empty fruit bunches from Dekel's mill at Ayenouan as feedstock. At the same time, we have been in regular dialogue with the relevant government ministries regarding the application and permitting process which has resulted in the initial focus being directed towards a 5-6MW biomass project at Ayenouan. Current work on the project is low cost and it is expected this will remain the case until a sustainable improvement in the macro economic environment is in evidence.
Also as previously disclosed, we have identified a third commodity where we believe we can leverage our existing infrastructure, logistics network and technical expertise to build a state of the art processing plant just as we have done at Ayenouan and are doing at Tiebissou. As with the clean energy joint venture, current work is low cost and will remain so, at least until Tiebissou is up and running.
Financial
During the six-month period under review, total revenues at Ayenouan were EUR15.4million, a 5% increase on the EUR14.6 million reported for H1 2019. A 19% increase in CPO prices achieved and a higher extraction rate more than offset lower year on year CPO production at the mill during the period (H1 2020: 23,882 tonnes / H1 2019: 28,934 tonnes) which in turn drove a 35.7% increase in EBITDA to EUR1.9 million and a major improvement at the net profit after tax level which came in at EUR0.4million compared to a EUR0.1million loss the previous year.
While Ayenouan has always been a low-cost and efficient operation, further cost savings were secured at both the project and corporate levels during the period so that general administration expenses in H1 2020 came in 7% lower than the previous year.
In June 2020, Bloomfield Investment Corporation, the credit rating agent for West Africa, renewed the Company's credit rating as investment grade unchanged: long term BBB- and short term A3.
Outlook
COVID-19 has caused much disruption to everyday life around the world and yet, despite this, much progress has been made by the Company both at our existing palm oil business at Ayenouan, which has materially improved in terms of financial performance in line with market expectations, and at our large scale cashew project at Tiebissou, which is due to commence production in Q2 2021. Bringing Tiebissou on stream will not just scale up and diversify our revenues, it will also add to the list of organic growth opportunities we can pursue within our existing portfolio. As well as increasing CPO production at Ayenouan towards its 60,000 tpa capacity as new estates planted across the region in recent years reach maturity, shareholders can also look forward to a two stage ramp up in processing capacity at Tiebissou first to 15,000tpa from 10,000tpa at no cost, and then to 30,000tpa.
Dekel has proven processing and logistics expertise and excellent relationships with the local communities in which we operate. We believe a highly cash generative platform is being established with a pipeline of additional projects which the Board are considering to add to the mix. While we are navigating our way through a challenging period we are quietly confident that Dekel is very well placed to deliver significant value for our shareholders as we head in 2021. As always, I would like to thank the Board, management, our employees and advisers for their support and hard work over the course of H1 and I look forward to continuing working with them closely during what promises to be an exciting period for Dekel.
Andrew Tillery
Non-Executive Chairman Date: 28 September 2020
CONSOLIDATED STATEMENTS OF FINANCIAL POSITION
30 June 31 December 2020 2019 --------- ----------- Unaudited Audited --------- ----------- Euros in thousands ---------------------- ASSETS CURRENT ASSETS: Cash and cash equivalents 317 273 Trade receivables 519 - Inventory 952 917 Accounts and other receivables 152 69 --------- ----------- Total current assets 1,940 1,259 --------- ----------- NON-CURRENT ASSETS: Property and equipment , net 29,697 30,308 Investment in an associate 1,951 1,998 --------- ----------- Total non-current assets 31,648 32,306 --------- ----------- Total assets 33,588 33,565 ========= ===========
The accompanying notes are an integral part of the consolidated financial statements.
CONSOLIDATED STATEMENTS OF FINANCIAL POSITION
30 June 31 December 2020 2019 --------- ----------- Unaudited Audited --------- ----------- Euros in thousands ---------------------- EQUITY AND LIABILITIES CURRENT LIABILITIES: Short-term loans and current maturities of long-term loans 4,361 3,829 Trade payables 1,187 680 Advance payments from customers - 1,169 Other accounts payable and accrued expenses 1,726 1,016 --------- ----------- Total current liabilities 7,274 6,694 --------- ----------- NON-CURRENT LIABILITIES: Long-term lease liabilities 78 90 Accrued severance pay, net 60 33 Long-term loans 12,826 13,963 --------- ----------- Total non-current liabilities 12,964 14,086 --------- ----------- Total liabilities 20,538 20,780 --------- ----------- EQUITY Share capital 141 141 Additional paid-in capital 34,530 34,368 Accumulated deficit (16,099) (16,502) Capital reserve 2,532 2,532 Capital reserve from transactions with non-controlling interests (7,754) (7,754) --------- ----------- Total equity 13,350 12,785 --------- ----------- Total liabilities and equity 33,588 33,565 ========= ===========
The accompanying notes are an integral part of the interim consolidated financial statements.
28 September 2020 -------------------- ------------------ ------------------ ------------------ Date of approval Youval Rasin Yehoshua Shai Kol Lincoln John Moore of the financial statements Director and Chief Director and Chief Executive Director Executive Officer Finance Officer CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME Six months ended Year ended 30 June 31 December -------------------------- 2020 2019 2019 ------------ ------------ ------------- Unaudited Unaudited Audited ------------ ------------ ------------- Euros in thousands (except share and per share amounts) Revenues 15,423 14,607 20,947 Cost of revenues (12,794) (12,356) 19,252 ------------ ------------ ------------- Gross profit 2,629 2,251 1,695 General and administrative 1,413 1,528 3,158 ------------ ------------ ------------- Operating profit (loss) 1,216 723 (1,463) Other income (expense) (7) 33 - Share of loss of associate (47) Finance cost (706) (826) 1,829 ------------ ------------ ------------- Loss before taxes on income 456 (70) (3,292) Taxes on income (53) (20) 47 ------------ ------------ ------------- Net income (loss) and total comprehensive income (loss) 403 (90) (3,339)
============ ============ ============= Income (loss) per share Basic and diluted income (loss) per share 0.00 (0.00) (0.01) ============ ============ ============= Weighted average number of shares used in computing basic and diluted income (loss) per share 423,895,851 353,341,082 379,838,186 ============ ============ =============
The accompanying notes are an integral part of the interim consolidated financial statements.
CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY
Capital reserve Additional from transactions Share paid-in Accumulated Capital with non-controlling capital capital deficit reserve interests Total -------- ---------- ----------- -------- --------------------- ------ Euros in thousands ---------------------------------------------------------------------------- Balance as of 1 January 2020 (audited) 141 34,368 (16,502) 2,532 (7,754) 12,785 Net income and total comprehensive income 403 403 Issuance of shares - 15 15 Share-based compensation 147 147 Balance as of 30 June 2020 (unaudited) 141 34,530 (16,099) 2,532 (7,754) 13,350 ======== ========== =========== ======== ===================== ====== 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 2019 (audited) 99 29,862 (13,163) 2,532 (7,754) 11,576 - 11,576 Net loss and total comprehensive loss - - (90) - - (90) - (90) Issuance of shares for acquisition of Pearlside 18 1,874 - - - 1,892 - 1,892 Exercise of options *) - - - - *) - *) Non-controlling interests arising from initially consolidated company - - - - - - 1,432 1,432 Share-based compensation - 77 - - - 77 - 77 Balance as of 30 June 2019 (unaudited) 117 31,813 (13,194) 2,532 (7,754) 13,514 1,432 14,946 ======= ========== =========== ======= =============== ====== =========== ======
CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY
Capital reserve Additional from transactions Share paid-in Accumulated with non-controlling capital capital deficit Capital reserve interests Total -------- ---------- ----------- --------------- --------------------- ------- Euros in thousands ---------------------------------------------------------------------------------- Balance as of 1 January 2019 99 29,862 (13,163) 2,532 (7,754) 11,576 Net loss and total comprehensive loss - - (3,339) - - (3,339) Issuance of shares 42 4,186 - - - 4,228 Exercise of options *) - - - - *) Share-based compensation - 320 - - - 320 -------- ---------- ----------- --------------- --------------------- ------- Balance as of 31 December 2019 141 34,368 (16,502) 2,532 (7,754) 12,785 ======== ========== =========== =============== ===================== ======= *) Represents an amount lower than EUR1.
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 ------------------------- 2020 2019 2019 ------------ ----------- -------------- Unaudited Unaudited Audited ------------ ----------- -------------- Euros in thousands (except share and per share amounts) Cash flows from operating activities: Net income (loss) 403 (90) (3,339) ------------ ----------- -------------- Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities: Adjustments to the profit or loss items: Depreciation 669 655 1,357 Share-based compensation 147 77 320 Accrued interest on long-term loans and non-current liabilities 618 780 1,306 Change in employee benefit liabilities, net 27 16 1 Share of loss of associate 47 Changes in asset and liability items: Decrease (increase) in inventories (35) (687) 626 Decrease (increase) in accounts and other receivables (602) 326 351 Increase in trade payables 522 863 16 Increase (decrease) in advance payments from customers (1,169) (301) (1,302) Increase in Right-of-use lease 30 - Increase in accrued expenses and other accounts payable 710 419 420 ------------ ----------- -------------- 1,278 2,088 3,095 ------------ ----------- -------------- Cash paid during the year for: Interest (729) (511) (1,053) ------------ ----------- -------------- (729) (511) (1,053) ------------ ----------- -------------- Net cash provided by (used in) operating activities 608 1,577 (1,297) ============ =========== ==============
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 ------------------------- 2020 2019 2019 ------------ ----------- -------------- Unaudited Unaudited Audited ------------ ----------- -------------- Euros in thousands (except share and per share amounts) Cash flows from investing activities: Cash acquired upon acquisition of subsidiary 780 - Investment in Pearlside (144) - Purchase of property and equipment (58) (235) (435) ------------ ----------- -------------- Net cash provided by (used in) investing activities (58) 401 (435) ------------ ----------- -------------- Cash flows from financing activities: Issue of shares (offering net proceeds) - 2,231 Long-term lease, net (12) (5) (4) Receipt of short-term loans, net 756 209 682 Receipt of long-term loans - 7,200 Repayment of long-term loans (1,250) (1,513) (8,366) ------------ ----------- -------------- Net cash provided by (used in) financing activities (506) (1,309) 1,743 ------------ ----------- -------------- Increase in cash and cash equivalents 44 669 11 Cash and cash equivalents at beginning of period 273 262 262 ------------ ----------- -------------- Cash and cash equivalents at end of period 317 931 273 ============ =========== ============== Supplemental disclosure of non-cash activities: Issuance of shares for services 15 15 - ============ =========== ============== Issuance of shares in consideration for investment in Pearlside - 1,892 1,998 ============ =========== ==============
The accompanying notes are an integral part of the interim consolidated financial statements.
NOTE 1:- GENERAL
a. 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"). The Company's registered office is in Limassol, Cyprus.
b. As of 30 June 20 20 , the Company has a deficiency in working capital of approximately EUR5.3 million. During the first half of 2020, the Company generated positive cash flow from operations of EUR 608 thousand. This is despite cyclical low crude palm oil prices during 2019 followed by the COVID-19 pandemic that caused the CPO prices to decrease again after a short recovery at the beginning of 2020. During the three months subsequent to 30 June 2020, the CPO price is increasing back to more normal levels. Therefore, Company management expects that cash flow from operations for the entire year of 2020 will continue to be positive. 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 cash flows. See also Note 1c. below regarding the uncertainty of the impact the Coronavirus may have on the Group's future revenues, profitability, liquidity and financial position.
Based on the Company's current resources and its projected cash flows from its operations, Company management believes that it will have sufficient funds necessary to finance its operations and meet its obligations as they come due at least for the next twelve months from the date of the financial statements.
c. The recent outbreak of Coronavirus, a virus causing potentially deadly respiratory tract infections originating in China and spreading in various jurisdictions, may negatively affect economic conditions regionally as well as globally, disrupt operations situated in countries particularly exposed to the contagion, affect the Company's customers and suppliers or business practices previously applied by those entities, or otherwise impact the Company's activities. Governments in affected countries are imposing travel bans, quarantines and other emergency public safety measures. Those measures, though apparently temporary in nature, may continue and increase depending on developments in the virus' outbreak. The ultimate severity of the Coronavirus outbreak is uncertain at this time and therefore the Company cannot reasonably estimate the impact it may have on its end markets and its future revenues, profitability, liquidity and financial position.
.
NOTE 2:- SIGNIFICANT ACCOUNTING POLICIES a. Basis of preparation:
The interim condensed financial statements as of 30 June 2020 and for the six months then ended have been prepared in accordance with IAS 34, "Interim Financial Reporting", as adopted by the European Union.
The interim condensed financial statements do not include all the information and disclosures required in the annual financial statements and should be read in conjunction with the Company's annual financial statements as of 31 December 2019 and the accompanying notes.
b. Accounting policies:
The accounting policies adopted in the preparation of the interim condensed financial statements are consistent with those followed in the preparation of the Company's annual financial statements for the year ended 31 December 2019.
c. Fair value of financial instruments:
The carrying amounts of the Company's financial instruments approximate their fair value.
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IR SEIFIAESSEIU
(END) Dow Jones Newswires
September 29, 2020 02:00 ET (06:00 GMT)
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