Member Info for catonahottinroof

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.

JK, I'm hoping that the planned earlier reporting of the half year production, compared with last year, means that they are keen to get some good figures out. I've topped up with another 50,000 this morning. I hope I'm right. Glad that they have let us know that they have ceased their interest in Norpalm.

Looks to me to be back on track again, and with a more focused business.

It's been a while since I saw any profit here. Shame about the rest of my holding. Still, my buy yesterday reduced my average form 11.6p to 9.5p. Can't help but feel that a couple of good quarters could return us to 10p+. We were rarely below 10p in the good old days.

Phil, the 175k buy this morning was me, adding in the hope of a bounce from the high season of production figures. It has allowed me to average down quite a bit too.

JK, many thanks for your posting. Been out all day and just got back, so great to have a summary of the conference call.

For me the most disappointing thing is that the SP fell 15% in the 2 days before the results. I am not making any accusations, but this is not the first time that we have seen this happen.

We will probably see a fall today, though the figures are not unexpected. We all knew that sales would be well down and they flagged the margin hit. I'm just pleased to see they have suspended the dividend. It would have been folly to continue to pay it in the circumstances. Hopefully they won't be in a rush to re-instate it, as it would be better to focus cash on growth of the business imo.

FK1, I hope your reference to a poorly performing football team doesn't refer to Huddersfield or Palace :))

Production figures explain why the share price has struggled recently. The euro CPO price achieved pretty much reflects the US dollar prices quoted, but no premium achieved to that. Good to see PKO prices holding up though. Best to judge the company over a longer period than one quarter, so will wait to see what happens in q2, particularly against very low comparative figures for last year.

Looks lime a very good non-exec director appointment. Very positive.

Cote d'Ivoire has, in recent years, become the world's largest producers of cashews, I believe. Tax breaks have been introduced recently to encourage an increase in in-country processing of the crop. Possibly a good opportunity here, as well as cocoa.

Interesting interview with Lincoln. I was particularly interested in talk of projects outside palm oil. Dekeloil has a good operating structure with collection points working well. I wonder if these could be similarly used for other crops at little additional cost. There were no words of caution about current production, so hopefully that is going well. As for Norpalm, it is still on the table but not too bothered one way or the other. Not a bad position to be in. Norpalm shareholders must be in a difficult position, I guess, needing to invest in their project or sell it. All sounds good to me. Looking forward to news of investments or Q1 production, whichever comes first.

Just noticed that CPO prices have crept back up to a shade under $700 again, just in time for selling high season production.

I'm pleased to see the short-term debt being repaid. I had wondered how they had paid for the capex last year, as they had some quite large capex items (boiler, Guitry nursery etc) and profits were probably only enough to cover capital repayments on the existing loans and maybe the dividend. I'm not too bothered about the extra borrowing, as it's a relatively small amount and could be useful to move quickly if there are some opportunities about.

Palmie - thanks for the information. I'm kind of surprised that Dekeloil hasn't walked away from the transaction. They must still feel that a deal can be done. Sounds like NOPA management got themselves in a pickle over their authority to transact the sale, whereas Dekeloil acted in good faith, assuming the NOPA directors knew their own authority limits. I'm with you Phil, looking forward more to Q1 production figures.

Maybe it is a "storm in a teacup", but for those affected it is being very badly handled. Of course, it may only be a few affected, but I am one if them. First I was told by the Aviva rep (via my IFA) to call their helpjine. They couldn't help, so still unable to login. They were borderline rude as well, suggesting it was my fault. Aviva rep confirmed it was not my fault and that they had some problems, which were being resolved last weekend. Come Monday, still couldn't log in and awaiting reply from Aviva rep, via IFA. As I say, I may be in the unlucky minority, but who knows. Nothing really in the business press, so hopefully not a widespread problem.