Member Info for jk400

Thanks rivaldo, I think all things considered we are not doing too badly - apart from the well documented issues around FFB availability / mill capacity / dilution / share price / cashew ramp up.

Rivaldo, are you having issues signing in to WH Ireland?

It won't let me in for some reason and, although unlikely, it would be interesing to see whether yesterday's news has affected their target price.

Zak Mir puff piece at 4:29:

https://www.youtube.com/watch?v=aJrXaJRKvE8

Harchris, the board can't take credit for this apparent turnaround in the same way that Rishi Sunak can't take credit for "halving" inflation. One swallow doesn't make a summer.

You seem to be forgetting that any supposed profit from this record November has already been wiped out - by the cashew facility still sitting idle.

Sorry if you only like to read good news and not 'deramping'.

One benefit of (not) being stale and old is a long enough memory to know the last time we had a "record" November, it was followed by a dreadful harvest - hopefully that doesn't happen this time.

The last thing we want is anybody buying us out at anything like these prices.

Simo, I can't say I'm overly worried at this point despite the recent sell off. It's nothing we haven't seen before after large sales, there's a domino effect of others piling in and a race to the bottom.

It's clearly not good, but if they can get the cashew facility up to capacity - bearing in mind it's now the best part of 3 years late, despite the rhetoric - then some positivity should quickly return.

The simpler explanation is that - not for the first time - we have a 'follow the leader' mentality of shareholders.

They could have just lost patience like rugs / bored of waiting / following their strategy when a share drops x% / insert your own reason here.

On the basis of no news is good news, then this appears to be based on nothing whatsoever really. We had the usual DKL non-news last week with forward guidance, but if you're selling based on that, then you don't really know DKL.

I'd suggest a big part of this is the proverbial noose around the neck which is the cashew facility and its ongoing delays. If the board came out and said "sorry for the delay, all should be sorted whenever", then we wouldn't all have a wet finger in the air trying to figure out which way the wind is blowing.

As it is, the cashew factory was supposedly finished two years ago and we just have a faulty shelling machine - apparently.

At these prices, they should also be looking to buy back and cancel some shares. Or, heaven forbid, buy some of their own.

Indeed fk1 and I can't imagine for a single second that shareholders of Norpalm Ghana would put up with such shenanigans.

WH Ireland retain 9.5p target.

"October production update: Well positioned for strong end to year in palm oil

This morning’s October production update from DKL further underpins strong expectations from the group’s palm oil business this year, with crude palm oil (“CPO”) production tracking ahead of the prior year for the 8th consecutive month. Positively, the company also report a promising start to November, with CPO production expected to be ‘materially higher’ than FY2022. Approaching year end, we remain confident of a very good performance from the palm oil business in FY2023E, validating expectations of a close to record financial performance from the palm oil mill driven by a combination of solid volumes and strong pricing. On the pricing front, we note the decrease in CPO pricing on both a monthly and YoY basis in line with international price movements; however, prices remain significantly higher than historic averages and at levels providing a strong return for DKL’s palm oil mill. Dekel is an increasingly diversified agricultural group with operations in West Africa, comprising a fully operational, sustainably sourced palm oil business alongside its recently inaugurated cashew processing activity. While the group did not update on the latter this morning, we highlight the significant upside this project presents as the group continues to ramp up production going into next year. With a strong showing from the palm oil business this year and expectations of a step change in profitability as the cashew project is bedded in, we retain our current fair value target of 9.5p."

Dropside, I believe Shai Kol lives there (he's always there in the conference calls) and Lincoln seems to visit a few times per year.

2magpies on the other side sums it up quite nicely:

"When prices are high, they have nothing to sell.

When they have lots of feedstock, the machinery won't work.

When they order new machinery, it is delayed.

When they take delivery of machinery, there are parts missing (or unsuitable)."

We really could do with a fundraiser/stacegibbs style very positive post right now!

Either that or a puff piece.

HarChris, you don't get "it", do you?

Hi rugs, you've always been a loyal passionate supporter of DKL, so that would be a shame to lose you.

DKL has become a punt for me rather than an investment.

I think if given enough time, then things should turn, but we are all literally running out of time!

For anyone with a large paper loss, I still see this as a good buy in opportunity to average down, with the proviso that you don't want/need that cash for a long time and/or ever again.

Unfortunately, the BOD are in 'fingers in ears' mode on any shareholder complaints, so will carry on regardless.

HarChris, you've clearly picked a point in time (January 2022) that fits your narrative, so let's look at the data:

Total issued share capital:

2016 - 154,326,632*

2017 - 295,995,774

2018 - 299,471,369

2019 - 353,341,082

2020 - 423,895,851

2021 - Can't find data.

2022 - 537,098,441

2023 - 559,404,153

Source: dekeloil.com / dekelagrivision.com

* 1,543,266,322 before 10x consolidation on a 10 for 1 basis in June 2016.

That looks like a lot more dilution than the 0.15% you mentioned last week and 4% earlier today.

Totally correct dbentley, the issue is as the dilution occurs in dribs and drabs, some holders/passers by are taken in by 0.15% here and there, as if it doesn't matter.

They even claim that we are "deramping" by constantly complaining about it.

It's also always done at a premium to yesterdays close, which in itself is lower due to previous dilution. Well here's the thing, the SP is down at 2.4p - how much further can they realistically dilute?

DannyQSee, you're correct on most points, but the cashews should be at break even by the end of this current Q4.

They're at 13k-14k tonnes now, even with all the issues, so 20k break even point sounds easily plausible within 8-10 weeks. 24 months later than expected, but it is what it is.

Just to complete the parish notices, this is what I missed earlier:

Continuing to sell at the nursery to increase capacity in the region for future years.

9.5p target price is based on the projected 40k-45k CPO tonnage.

All essential components are on site at cashew facility but if there's a problem with one part (i.e. shelling/peeling) then it has a knock on.

At this stage, while the cashews are ramping up the reporting will remain quarterly, but yes once the cashews reach a steady stage of production we see that shareholders like the monthly results and aim to move to monthly reporting of cashew numbers and provide even further KPI information on the cashew business.

FAO: dbently, your question on related party transactions - when it was first started to be acquired a number of years ago, the cashew business, people don't like related party transactions. The answer from our point of view is we completely understand and agree, this was more oportunistic than our strategy at that point. The initial goal was to move in to further palm oil companies and we were trying to acquire a company in the west of Ghana (stacegibbs, you will no doubt remember Norpalm?) and that transaction fell through, palm oil prices dropped. We saw a need for the business to diversify and scale, the cashew business made a lot of sense, we bought it at I think 1/10th of the valuation by PKF and we are seeing this business at a really critical part of the next phase of growth in terms of both revenue line and profitability, particularly it seems next year.

FAO: Rugs. Question about big trades in September

That is correct, the stock price was sitting around 3.3p and there were some big trades that unfortunately brought it back to 2.6p

We are now aware of what that is, our understanding is that it was a fund where the fund manager left his position and the new fund manager did what new fund managers do and that is to remove all the small holdings of the previous incumbant. So that stock was sold on, given the size of the trade the price held up relatively well. Obviously back at 2.6p is disappointing, but hopefully presents a value opportunity and we've been at these levels before and moved back to 3p-4p so hopefully with this presentation this week, people will see this as an opportunity as we move in to cash flow positive on cashews and high season for palm oil in the coming months.

(No mention of director buying.)

The missing line about share buy back was "At this point in the current macro weakness and lack of liquidity in AIM stocks probably I think a buy back may be a more positive mechanism [than dividend] but the focus at the moment is on reducing our overall debt level."

We think the WH Ireland valuation target is reasonable [at 9.5p].

Significant organic growth in the cashew business to come.

Part 2/2

Third commodity?

Pretty sure that Lincoln just repeated that this won't be financed by any further issuing of shares. One to check.

Extra Capex for the new shelling machines?

"Fairly modest."

Any further diversification?

Nothing new here. Clean energy, etc. All attention on cashew business for now.

Send any further questions to the usual channels and they will answer. Shareholders know that questions are answered usually within a day.

Interesting and exciting next 3-6 months.

"Light at the end of the tunnel". Looking forward to the next 3 months. SP has been harmed unnecessarily by a large seller recently.

Thanks to Shai and Lincoln for their time.

Part 1/2

Highlights from the conference call for those unable to attend. As usual DYOR and the video is usually posted on the website at some point.

Shai and Lincoln both present, no sign/mention of Youval despite the RNS stating otherwise.

Starting off by just summarising the results. For the purpose of this commentary, will bypass this as it's all in the RNS's and concentrate on the Q&A's, of which there are a few!

Palm oil performing well, cashew "not to the level" we were expecting. Significant organic growth potential in 2024 and 2025.

Cashew expect to achieve operational cash flow positive results towards end of Q4 2023.

RSPO certification ready and waiting audit on palm oil. BRC Global food standard assessment completed on cashew operation.

Positive results of internal feasibility study for third commodity project.

On to Q&A now.

Palm oil:

Why are we still operating at half capacity?

We are operating around 65% of full capacity. Continuing programme of fertiliser - working well. Still dependent on small holders. Able to keep our market share of the business, consider it as a success.

40k-45k probably the expected tonnage and optimum level we can achieve, not 60k tonnes in next 2-3 years anyway.

Cashews:

Why has it taken longer than expected?

Definitely a delay in ramping up. Two reasons, contractor delays with COVID, etc. Shelling and peeling issues with equipment. Learning all the time.

Peeling showing significant improvement now in performance. Next few months will sort peeling issue. With shelling, they have ordered 10 additional machines to arrive in next few weeks and installed more or less immediately.

Moving up to 13-14 tonnes a day now, breakeven point is 20 tonnes a day.

Frustrated with the supplier, doing everything they can to take control of issues. Ordering of additional shelling machine a good example of that.

Why no financial calendar?

Much more difficult for smaller companies reliant on auditors concentrating on blue chips.

No other palm oil companies reporting monthly, we're very transparent.

Dividends/buy back?

Priority is to clear debt sensibly over next 2-3 years. Not currently on the agenda, but will be back on agenda at some point. Mentioned something about buy back being more preferable, but missed the end due to interruption.

Third party transactions (dbentley)?

Sorry, I missed this answer due to interruption so will need to check back.

Share price?

Sorry, I missed this answer due to interruption so will need to check back.

WH Ireland 9.5p valuation, is it too low?

Sorry, I missed this answer due to interruption so will need to check back.

RSPO certification situation?

Covered above.

Why is cashew business so far behind?

Problem with cashew appears to be mainly peeling and shelling off the back of that. Equipment issues and continued teething problems, see above.

Palm oil harvest levels?

Yes, they will always be unpredic