RE: Rather good October production update11 Nov 2020 09:01
Arden have updated as follows, confirming their Buy and 7.6p target price (nothing particularly price-sensitive, but a good summary so I've pasted it in full):
"Dekel Agri-Vision has announced a positive set of palm oil production figures for October 2020. Fresh fruit bunches processed were up 15% in Oct 2020 at 9,350MT, compared with 8,118MT in Oct 2019. CPO production was up 19% at 1,818MT, compared with 1,528MT in Oct 2019, benefitting from higher extraction rates than in October last year. CPO sales in October 2020 were up 40% to 1,843MT, from 1,319MT in Oct 2019. The average CPO price for Oct 2020 was €636/MT, 28% higher than October 2019, when the CPO price was just €495/MT.
PKO production was 14% lower at 129MT in October 2020 compared to 150MT in 2019, reflecting lower kernel purchases from other mills in the area, as a result of weak PKO prices. PKO sales were 251MT in October 2020 at an average price of €564/MT. (There were no PKO sales in October 2019). PKC production was 23% lower at 196MT in October 2020. Sales were 83% lower than in Oct 2019 at 47MT, whilst the average PKC price was up 5% at €61/MT in Oct 2020, compared to Oct 2019.
The crude palm oil (CPO) price has continued to climb over the past few weeks. The average CPO price has jumped 5% in October 2020, compared with last month. This strong pricing performance has been as a result of restocking by key buying nations in Asia, such as China and Malaysia. Malaysia is now moving into its low production season. The current palm oil price is trading at US$825/MT (€698/MT). Dekel Agri-Vision’s management is cautiously optimistic that, despite the ongoing global pandemic, this supportive pricing environment will persist into the months ahead. This could provide supportive trading conditions for the Company, when it enters its upcoming peak harvesting season in Cote d’Ivoire, which runs from January to June.We are not currently making any changes to our forecasts.
On the basis of our sum of parts valuation we value the company at 7.6p per share, equivalent a market capitalisation of £32.2m. This compares with the current share price of 2.4p and a market cap of £10.2m. We maintan our Buy recommendation."
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