(Alliance News) - Palm oil producer DekelOil Public Ltd on Wednesday reported a "record" interim performance driven by strong production growth.
Production of crude palm oil for the six months to June, from Ayenouan in the Ivory Coast, grew 30% to 28,934 tonnes. Fresh fruit bunches delivered to the mill climbed 37% to 131,917 tonnes, recovering from a poor peak harvest in 2018.
DekelOil's crude palm oil sales increased by 20% to 26,702 tonnes, and prices achieved in the half were slightly ahead of international benchmarks. Pricing is at a cyclical low, the company said, it it said they have improved since June.
Elsewhere, at the Tiebissou cashew nut processing project in the Ivory Coast, DekelOil is expecting first production in 2020.
This performance helped the company's revenue increase by 3.5% to EUR14.6 million, and DekelOil's pretax loss has narrowed to EUR70,000 from EUR504,000.
"Strong progress has been or is being made on numerous fronts including a rebound in first half palm oil production at Ayenouan, construction commencing at the cashew processing plant at Tiebissou and a EUR7.2 million loan facility and EUR1.5 million equity investment secured from leading social impact investor AgDevCo which has materially strengthened our balance sheet," said Executive Director Lincoln Moore.
"This has been achieved despite operating within the framework of the lowest sustained palm oil prices we have seen since operations at our seed to oil project at Ayenouan commenced in 2014. Critically, in the last month we have seen palm oil prices begin to strengthen and we are optimistic palm oil prices will continue to rise over the next six to 12 months," Moore continued.
Non-Executive Chair Andrew Tillery added: "Our existing three projects do not represent the sum of our ambitions or the breadth and scope of the opportunities we see before us.
"With investors of the calibre of AgDevCo on our shareholder register, a significantly strengthened balance sheet following the post period refinancing and fundraise, and the normalisation of trading conditions at Ayenouan, we believe DekelOil is further advanced in its objective to become a leading West African focused agriculture company."
Shares were down 3.8% on Wednesday morning in London at 2.31 pence each.
By George Collard; georgecollard@alliancenews.com
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Dekel Agri (DKL)