Dekeloil Public Limited Q3 2019 Production & Sales Update (3541P)

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RNS Number : 3541P

Dekeloil Public Limited

10 October 2019

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.

DekelOil Public Limited / Index: AIM / Epic: DKL / Sector: Food Producers

10 October 2019

DekelOil Public Limited ('DekelOil' or the 'Company')

Q3 2019 Production & Sales Update

DekelOil Public Limited, the West African focused agriculture company, is pleased to provide a production and sales update for its Ayenouan palm oil project in Côte d'Ivoire (the 'Project') for the quarter ended 30 September 2019. This includes quarterly production of crude palm oil ('CPO') of 4,803 tonnes at the Project's mill resulting in total volume produced during the nine months to 30 September 2019 of 33,746 tonnes, a 22.2% increase on the 27,613 tonnes produced during the equivalent period in 2018. In addition, the Company is reporting a 30.5% increase in Q3 crude palm oil sales ('CPO') to 7,138 tonnes (Q3 2018: 5471 tonnes), driven in part by the sale of CPO stock on hand at the beginning of the review period.

Q3 2019 production and sales figures for the Project are detailed in the table below:

 
                            Q3 2019   Q3 2018        Increase   H1 2019 
                                                 / (Decrease) 
 FFB collected (tonnes)      24,665    24,938           -1.1%   131,917 
 CPO production (tonnes)      4,803     5,371          -10.6%    28,943 
 CPO sales (tonnes)           7,138     5,471          +30.5%    26,702 
 Average CPO price per 
  tonne                      EUR456    EUR544          -16.2%    EUR505 
 PKO production (tonnes)        538       526           +2.3%     1,896 
 PKO sales (tonnes)             819       578          +41.7%     1,539 
 Average PKO price per 
  tonne                      EUR487    EUR691          -29.5%    EUR589 
 PKC production (tonnes)      1,158       681          +70.0%     2,525 
 PKC sales (tonnes)           1,459       643         +126.9%     2,274 
 Average PKC price per 
  tonne                       EUR56     EUR52           +7.7%     EUR55 
 

Production

-- Q3 CPO production of 4,803 tonnes compares to 5,371 tonnes produced in Q3 2018 - follows record Q2 2019 production of 14,013 tonnes

-- Brings CPO production for 9 months to 30 September 2019 to 33,746 tonnes, representing a 22.2% increase from the 27,613 tonnes produced over the nine month period ended 30 September 2018

-- 1.1% decrease in fresh fruit bunches ('FFB') delivered to the mill to 24,665 tonnes follows excellent H1 2019 peak harvest during which a record 131,917 tonnes FFB were delivered to the mill

-- CPO extraction rate lower than in Q3 2018, due to early harvesting by farmers looking to supplement their income during the low pricing environment

o As part of its efforts to support the smallholder community, DekelOil has been accepting lower quality FFB, resulting in a circa 2% reduction in the mill's extraction rate compared with Q3 2018

-- 2.3% and 70% increase in palm kernel oil ('PKO') and palm kernel cake ('PKC') production to 538 and 1,158 tonnes respectively, as successful strategy of sourcing external supplies of kernels for processing continues to yield results

Sales

-- 30.5% increase in Q3 CPO sales to 7,138 tonnes (Q3 2018: 5471 tonnes) as 3,000 tonnes of CPO stock held at the beginning of the quarter was sold in an improving CPO pricing environment

-- Average CPO price of EUR456 per tonne achieved in Q3 represents a 16.2% decrease on Q2 2019's EUR488 with CPO international benchmark prices reaching a low of EUR430 in July

-- A partial recovery in international CPO prices seen through Q3 has flowed through to local CPO prices which have been above EUR510 in late Q3 and in early Q4

   --    41.7% increase in PKO sales to 819 tonnes and 126.9% increase in PKC sales to 1,459 tonnes 

DekelOil Executive Director Lincoln Moore said, "With 33,746 tonnes of CPO produced during the nine months to the end of September, full year production at Ayenouan is on track to return and likely exceed the levels we reported prior to 2018's anomalous peak harvest season. A recovery of CPO prices from cyclical lows would further assist Ayenouan in boosting profitability to and above previous levels, hence, we are encouraged by the recent gradual recovery in CPO prices. Despite CPO prices continuing to be well below historical averages of EUR725 per tonne, we remain very optimistic of improved pricing in the next 6-12 months and beyond.

"Together with the recent strengthening of our balance sheet following the AgDevCo debt refinancing in July 2019, this is an exciting period in our development, particularly with work underway at our cashew processing project in Tiebissou where an initial 10,000 tonnes per annum plant is on course to be commissioned in H2 2020. At this point, DekelOil will not only be known as Dekel Agri-Vision, but will also have two producing projects each generating material and diversified revenue streams. I look forward to providing further updates on our progress."

** ENDS **

For further information please visit the Company's website www.dekeloil.com or contact:

 
 DekelOil Public Limited 
  Youval Rasin 
  Shai Kol 
  Lincoln Moore                                 [phone] 
 Cantor Fitzgerald Europe (Nomad and 
  Joint Broker) 
  David Foreman 
  Keith Dowsing                                 [phone] 
 VSA Capital (Joint Broker) 
  Andrew Monk (Corporate Broking) 
  Andrew Raca (Corporate Finance)               [phone] 
 Optiva Securities Limited (Joint Broker) 
  Christian Dennis 
  Jeremy King                                   [phone] 
 St Brides Partners Ltd (Investor Relations) 
  Frank Buhagiar 
  Cosima Akerman                                [phone] 
 

Notes:

DekelOil Public Limited is a multi-project, multi-commodity agricultural 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 70,000tpa crude palm oil mill; a cashew processing project in Tiebissou, which is due to commence production in 2020; and a second palm oil project in Guitry which is under development.

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October 10, 2019 02:00 ET (06:00 GMT)