The latest Investing Matters Podcast episode featuring Jeremy Skillington, CEO of Poolbeg Pharma has just been released. Listen here.
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Thanks dropside, I've been a bit busy today so not had chance to trawl RNS thoroughly. Looks like that pesky Covid screwing stuff up again then. Either way fingers crossed for '21 turn around
The initial delay in Cashew production from January to April next year was stated to be because of Covid.
On 9 April 2020 we had "Manufacturing of the milling equipment in Italy continued until mid-March but work has since been suspended due to COVID-19. Commencement of production may see some delay from original target date of January 2021"
On 12 May they said "Delivery of the equipment is now expected to take place in four shipments commencing in July which the Company now anticipates will extend commencement of production at Tiebissou by up to a maximum of three months from the original target date of January 2021"
The wording softened in the 14 May RNS to become "continues to expect" commissioning in April 2020. A month later they opened the timing window from April to H1 on 10 June with "remains on course to commence production in H1 2021." The 6 July had "management believes the mill will commence production in Q2 2021" which allowed too much wriggle room in my view, and was tightened a bit today with "The development of our large-scale cashew processing project at Tiebissou is gaining momentum and remains on track to be commissioned in Q2 2021". Changing the wording from "believes" to "remains on track" sounds more positive to me.
The indication was that the cashew machinery from Italy was on the critical path. This has been shipped in line with the revised promises. Covid has probably played a part in the overall project timings. Hopefully they can bring forward as much activity as possible to maximise cashew production in the peak season next year.
When they did the palm oil plant I thought this was quite a risky venture. They succeeded in getting that up and running in a greenfield location in Cote D'Ivoire. That does give me confidence that the same team can do it again.
although they did say end of 2020 for cashew production start back when final production results came out in Jan 2020. Cant recall if it was declared why the delay to April / Q2? Anyway I am trying to concentrate on being positive here, and fantasising of actually achieving of some profit in 2021
I do question why they were specific about April 2021 in prior RNS and now it's Q2 2021... but hey there may be nothing in it. Mind you a slippage of a few weeks isn't going to excite me too much, fingers crossed they press the on switch April or early May . Be very interested to see what capacity the cashew plant runs at out of 10,000 T in it's first year. Anyone got a predictions (I don't think it's been postulated in an RNS?)
Good they have tightened the wording since the last RNS, now "remains on track".
The development of our large-scale cashew processing project at Tiebissou is gaining momentum and remains on track to be commissioned in Q2 2021.
When they shipped the Palm Oil Mill, it arrived at Abidjan port on 9 March 2013 and cleared customs and was ready to ship on the 25 March. They have 32 containers to ship for the cashew infrastructure, so budgeting 4 weeks sounds consistent with past experience. It would have been known about ahead of arrival so I don't see this as causing any delays to the plan.
PS excuse the typos, my eading eyesight is becoming awful lol. Avoiding opticians for a while until plague sods off.
So today's announcement effectively amounts to a 4 week delay then (previous estimate was April 2021). Are they saying it's due to customs? Shouldn't that ha e been expected if it is that, or is the 4 wks overly onerous compared to normal?
"Hopefully the directors are being conservative in preparing the market for a Q2'21 completion date, and perhaps we'll get a pleasant surprise in Q1:"
That just might win joke of the year at the Edinburgh Fringe festival Rivaldo! It is a good job DKL don't make teabags, you would have to leave the bag in for days. Book mark this post for Q1 2021 and feel free to repost. The Board is asleep at the wheel and cannot manage injects on production even when it is blatantly obvious that the numbers will fall short in a quarter.
Given it is a dog ate my homework share it is most likely there will be slippage and even Q2 is optimistic. I accept there are background preparations in IC as best they can but I can see no way it will happen earlier than expected.
Good to see that cashew faciity construction is now progressing well - and "in time to capitalise on the 2021 peak harvest season".
Hopefully the directors are being conservative in preparing the market for a Q2'21 completion date, and perhaps we'll get a pleasant surprise in Q1:
Https://www.investegate.co.uk/dekel-agri-vision--dkl-/rns/arrival-of-cashew-project-infrastructure-equipment/202007060700090544S/