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... and up another $10 this morning so far.
CPO closed up $30. It will be interesting to see what happens to the DKL price tomorrow.
What a great CPO price jump today. So far, up $29 on the day! If this holds, it should have big effect on DKLs bottom line. Can't see the SP staying long at these low levels next year.
Nicely timed buy Rugs. Congrats at getting under 5p average.
Hi Rugs. Thanks for the info. One to keep an eye on.
Currency movement probably won't make much difference. It didn't seem to help when GBP was falling. Good to see CPO prices on the rise this morning. I dont have much spare cash atm, but have made a couple of small buys this morning. I see value here in the short term, with more to come next year if CPO prices hold up.
CPO futures just gone over $700 this morning. Wow. I wish I had some options.
Agree that this is an exciting development, as more such projects can be bolted on as and when. Whilst I would have liked to see more challenging targets set for the options, I am happy that incentives are in place to boost the SP. At least if they get to 6p I will nearly be at break-even. I do expect much better than 6p anyway if the CPO prices hold or rise further and if we get some decent high season production figures. CPO is up a shade again this morning. It's nice to get some newsflow as well. We had a long spell without any decent news.
About a year ago CPO prices were around $450-500 and the share price here was about 3.5-4.25p. Since then, production volumes have returned to record, or close to record levels. CPO price have increased dramatically to above $650 and heading towards $700. The company has diversified into cashew processing, with processing due to commence in 2020. A new palm nursery at Guitry is being developed. Over the past years, the nursery at Ayenouan has been supplying new plants, which will improve yields from smallholders over time. The fertiliser programme trialled this year should see growth, as the decision of smallholders to fertilise their plants will make economic sense given the CPO price rise. Replanting and fertilising should help to move production volumes closer to the capacilty of the mill. Another significant development this year has been the partial refinancing of debt with Agdevco. It seems likely that they will have done extensive due diligence and that they will be a supportive lender and shareholder. The capital repayment holiday should allow the company to continue to invest in growth. I can see no reason why the shares should not reach the levels of a year ago, even in the short term. This would be a 50% increase from now. Into next year, if CPO prices hold or increase and we see any sort of production volume growth, I can see the share price returning to 10p, a level which was considered low only a couple of years ago. I have been significantly increasing my shareholding here ever since the AGM to take advantage of the historically low prices. All the above is imo and please dyor. Who knows, we may see more than the 3 regulars at next year's AGM!
Welcome back Hereandnow. Hopefully your timing is spot on
FK1, sorry, I'm not creative enough to write a puff piece. Nice to see some activity here on the upside.
The CPO price keeps on rising. After a small retrace a few days ago, it has resumed it's upward trend. I don't see the step change of recent weeks in CPO prices being reflected yet in the DKL price, so I've had another 100,000 top up this morning, to bring my average down again. Still well above current price, but I'm starting to feel more confident here, assuming the CPO price rises stick.
FK1, I'd like to take the credit but my buys usually have the opposite effect in the share price.
On the back of the recent CPO price increase, I've bought another 150,000 shares this morning. I'm hoping that if the CPO price increases stick it will not only boost sales and margins next year, but may encourage smallholders in planting new trees and fertilizing existing trees leading to increased volumes in due course. Let's hope the CPO price keeps on rising. Too late to have much impact on 2019, but hopefully a boost for next year.
FK1 and Rugs,
It was good to meet up again yesterday. I liked what I heard yesterday and can see the steps being taken to address issues of quantity and diversity of production. The investment by AgDevCo has also impressed me. Youval and Lincoln also took shares at higher than current market price. I have added 150,000 more this morning to bring down my average. I now have a nice round number of shares Rugs!
AGM continued...
CPO prices were discussed. Clearly they are imortant for DKL. The Dekeloil website has a link to Abidjan . net. Prices in Abidjan . net have nit been updated for some time. LM said he would look at this, though there are other places to find the info.
My overall feel was that the BOD were quietly confident. For myself, I felt that the company is taking the right steps in diversification, improving smallholder yields and refinancing, which are within their control. Hopefully, CPO prices will improve from current lows. If these things come together, the business would be transformed.
All of the above, and the first part of my post, were from my own memory and scribbled notes, so please dyor.
Here are my notes from the AGM yesterday. Sorry they are a bit late, but I was very late getting home last night. Rugs, FK1 and I attended, with Youval, Andrew and Lincoln there from DKL. Rugs and FK1, please add to or correct any of my notes below, as I didn't write everything down and my handwriting is not great.
All resolutions were passed, then an AGM statement was distributed, which highlighted the investment from AgDevCo. There was general discussion about the AgDevCo investment and all agreed that it was an positive endorsement of the manner in which DKL conducts it's business. The refinancing clearly took some time to complete, as AgDevCo did their due diligence, but they must have liked what they saw.
A number of questions were asked about the cashew business. The Cote d'Ivoire government are actively trying to encourage more processing in-country, rather than simply growing the raw fruits and sending them out if the country for processing. The incentives include tax free profits for a number of years and a subsidy based on the cashew quantity processed. DKL expect to get quickly up to 10k tonnes processed, probably in the second year. By adjusting shifts, they can process 15k tonnes without further capex. To get to 30k tonnes would require further capex.
Demand for processed cashews is high and DKL anticipate no problem selling all they can produce. They can be stored for longer than the palm ffb's (up to 4 months if I remember correctly) , so processing can be smoothed out more than for palm oil. High season for cashews is similar to that of palm oil.
FFB costs for palm oil processing is somewhat regulated and is based on world prices. Cashew pricing is less regulated.
Demand for broken cashews is increasing, which should help prices.
There was general discussion about palm oil. Prices are expected to improve from the current low levels. DKL is making good progress on RSPO accreditation, and achieving this is important. At Guitry, they plan to build the nursery only once RSPO has been achieved. Planting would then be undertaken. Guitry is seen as a longer-term project, which will require investment and time and would most likely be undertaken with a partner.
There has been a pilot scheme (150 smallholders) to help smallholders to fertilise their crops. The scheme involves smallholders being supplied with fertilizer if they consistently supply FFBs to DKL. The agreement covers groups of smallholders. If one smallholder defaults in their payment, the cost would be borne by the other smallholders, not by DKL. There have been no payment defaults in the pilot scheme. The benefits of fertilizer, which is applied in April and August, is seen the following year. A well tended plantation could yield up to 20t per ha. However, it is hoped that fertilizer use could increase yields from about 5t currently to 10t. If used extensively, this could significantly increase production for DKL, as well as improving smallholder livel
Dbentley, Hope to meet you after the AGM tomorrow.
Todays announcements takes away my concerns about financing, after poor results last year. It is a shame to see dilution at these low share prices, but the refinancing should remove funding concerns and help in the share price recovery.
JK, thank you so much for your commentary, it is much appreciated. I'll be at the AGM, but not sure what more they can add then. Thanks again.
Me too Rugs. I have just bought another 50,000 too. Have just booked train tickets for the AGM, so hoping for some positive news.