Dekel Agri-Vision Plc, the West African focused agriculture company, is pleased to announce its audited results for the year ended 31 December 2019 (‘Accounts’).
Advancing a multistage portfolio of agriculture projects up the development curve
Production – palm oil project, Ayenouan Côte d’Ivoire
· 14% increase in Crude Palm Oil (‘CPO’) production to 37,649 tonnes (2018: 33,077 tonnes)
o Follows 21% increase in Fresh Fruit Bunches (‘FFB’) delivered to mill to 176,019 tonnes (2018: 146,036 tonnes), as yields recovered from 2018’s poor peak harvest season
· 15% increase in CPO sales to 37,713 tonnes (2018: 32,692 tonnes)
· Average realised sales price of €491 per tonne of CPO, a 9% reduction on 2018’s €542 average
o CPO prices rallied strongly to over US$850 per tonne in December 2019 but have since retraced back to as low as US$500 per tonne post period end in response to COVID-19 pandemic before stabilising at around US$610 today
· Ongoing roll-out of ESG initiatives included successful trial of fertiliser programme aimed at increasing yields and further strengthening Dekel’s relationship with local smallholders
Development – cashew processing project at Tiebissou in Côte d’Ivoire
· Commencement of construction phase with first production expected in Q2 2021, at which point Tiebissou will be Dekel’s second producing asset and provide exposure to global cashew market
o Manufacturing of milling equipment in Italy now underway following suspension of activities due to COVID-19
o Shipment of all infrastructure equipment consisting of 32 containers due for arrival in Côte d’Ivoire in July 2020
New Ventures
· JV signed with Green Enesys to explore feasibility of developing a hybrid power project comprised of a 30MW solar PV plant and a 5-6MW biomass plant using feedstock from Ayenouan
· Internal feasibility studies carried out on a number of potential new ventures in Côte d’Ivoire – one venture being actively considered as a new project for the Company
· New ventures proceeding cautiously due to COVID-19 uncertainty
Financial overview
· Revenue remained stable at €20.9m (2018: €20.9m) as increase in CPO production offset by the decrease in CPO prices
· Gross margin percentage also remained stable at 8.1% (2018: 8.3%) as lower raw material costs due to increased availability of fruit was offset by 8.0% lower CPO prices and 1.1 percentage point decrease in the CPO extraction rate
· 2.4% decrease in general administration expenses to €3.16m (2018: €3.24m)
· Positive EBITDA achieved of €0.2m (2018: €0.1m loss)
· Net loss of €3.3m in line with 2018 (2018: net loss of €3.3m)
· €7.2million 10-year senior secured loan facility entered into with AgDevCo Limited (‘AgDevCo’), a UK Aid government-backed social impact investor in Africa’s agriculture sector:
o €6.2 million replaces an existing NSIA Bank loan
o €1.0m for Environmental, Social and Governance (‘ESG’) activities and general working capital purposes
· The AgDevCo loan’s four-year capital repayment holiday estimated to generate €5.8 million cash savings, after taking into account interest rate differential and transaction fees
· The Company has continued and is expecting to continue to meet the current repayment obligations with respect to AgDevCo. In terms of financial covenants the lender is considering providing a waiver during these unprecedented market conditions
· The credit rating agent for West Africa, Bloomfield Investment Corporation renewed the Company’s credit rating unchanged as investment grade: long term BBB- and short term A3 on 15 June 2020
Dekel Executive Director Lincoln Moore said, “Set against the backdrop of a second consecutive year of lower global palm oil prices the Company is continuing to navigate its way through what has been a highly challenging trading period for the whole industry. Dekel is a growth company with a multi-stage portfolio of agriculture projects. We employ hundreds of local workers across our projects in Côte d’Ivoire, and we provide an outlet for the produce of thousands of smallholders and co-operatives in the region. We recognise our responsibilities to both our shareholders and the local communities in which we operate. Having reported double-digit increases in full year production and sales and having secured substantial cash savings via the AgDevCo refinancing, we have shown that Dekel Agri-Vision can successfully trade and navigate through such a difficult environment.
“We believe the year ahead will serve to demonstrate that Dekel Agri-Vision is both a resilient and a growing business. Resilient because, despite COVID-19 and the associated downturn, we expect the business to report improved financial results. Growing because in H1 2021, we expect to bring our second producing project, the large-scale cashew processing project at Tiebissou on stream. Providing not only a second material revenue stream but also exposure to a new commodity and end markets, Tiebissou will transform Dekel into the diversified agriculture group we are looking to build. We have a pipeline of exciting new ventures that match both our investment and social criteria and once Tiebissou is in production we will have the platform with which to monetise this and grow the Company further. Despite the unprecedented challenges and uncertainties caused by COVID-19, we are confident for the future and I look forward to providing further updates on our progress during the year ahead.”
dekeloil