TIDMDKL
RNS Number : 2222A
Dekel Agri-Vision PLC
22 September 2022
Dekel Agri-Vision Plc / Index: AIM / Epic: DKL / Sector: Food
Producers
Dekel Agri-Vision Plc
('Dekel', the 'Company' or the 'Group')
Interim Results and Investor Presentation
Dekel Agri-Vision Plc (AIM: DKL) , the West African agribusiness
company focused on building a portfolio of sustainable and
diversified projects, is pleased is to announce its interim results
for the six months ended 30 June 2022.
The Company will be hosting an investor presentation in the form
of a Q&A session at 12.30 p.m. UK time on 28 September 2022.
The call will be hosted by Lincoln Moore (Executive Director),
Youval Rasin (CEO) and Shai Kol (Deputy CEO and CFO), who will
discuss the interim results and provide an update on activity
across its portfolio of projects. Further information about the
call can be found at the end of this announcement.
Key Highlights
Palm Oil Operation
-- Record EBITDA and record Net Profit after Tax delivered from
the Ayenouan palm oil plant in Côte d'Ivoire (the 'Palm Oil
Operation') primarily driven by record Crude Palm Oil ('CPO') and
Palm Kernel Oil ('PKO') pricing and an improved extraction rate,
offsetting much lower than typical high season production
volumes:
o H1 2022 revenue of EUR19.7m, a 9.2% decrease from EUR21.7m in
H1 2021 - includes sales of CPO, Palm Kernel Oil ('PKO'), Palm
Kernel Cake ('PKC') and Nursery Plants
o H1 2022 gross margin of 25.4% compared to 22.6% in H1 2021
o Record H1 EBITDA of EUR4.2m, an increase of 7.7% from EUR3.9m
in H1 2021
o Record H1 net profit after tax of EUR2.5m, a 25.0% rise from
EUR2.0m in H1 2021
Cashew Operation
-- The Company's cashew processing plant at Tiebissou in Côte
d'Ivoire (the 'Cashew Operation') recorded a net loss of EUR0.2m, a
period in which operations are in the late stages of completing
full commissioning. The Company will provide further updates in
respect of the commissioning process as appropriate.
*Cashew pilot production commenced in early January 2022 with
full commissioning to be completed in early Q4 2022
Financial Highlights
Year ended 31 December 2022 2021 % change
Palm Oil Operation
---------- ---------- ---------
Revenue EUR19.7m EUR21.7m (9.2%)
---------- ---------- ---------
Gross Margin EUR5.0m EUR4.9m 2.0%
---------- ---------- ---------
Gross Margin % 25.4% 22.6% 12.4%
---------- ---------- ---------
G&A (EUR1.5m) (EUR1.7m) (11.8%)
---------- ---------- ---------
EBITDA EUR4.2m EUR3.9m 7.7%
---------- ---------- ---------
Net profit / (loss) after tax EUR2.5m EUR2.0m 25.0%
---------- ---------- ---------
Cashew Operation
---------- ---------- ---------
Net Loss* (EUR0.2m) Nil
---------- ---------- ---------
Dekel Group Net profit / (loss)
after tax EUR2.3m EUR2.0m 15.0%
---------- ---------- ---------
Operational Highlights - Palm Oil Operation
-- CPO Production: 36.3% decrease in CPO production to 16,893
tonnes in H1 2022 compared to H1 2021
o The typical high season, which normally takes place from
February to May, was at historically low levels
o CPO extraction rate in H1 2022 increased to 22.4% (H1 2021:
21.4%), partially offsetting 39% lower Fresh Fruit Bunch ('FFB')
quantities compared to H1 2021
-- CPO Sales: 31.4% fall in CPO sales to 16,996 tonnes in H1
2022 (H1 2021: 24,784 tonnes) largely due to the lower CPO
production
-- CPO Prices: 24.0% increase in average realised CPO prices to
a record level of EUR1,013 per tonne in H1 2022 compared to H1
2021
o International CPO prices have steadied but continue to trade
at multi-year highs of above EUR1,000 per tonne
-- PKO Production: H1 2022 PKO production 25.2% lower than H1 2021 due to lower FFB volumes
-- PKO Prices: 83.6% higher average realised PKO prices in H1
2022 (EUR1,454) than H1 2021 (EUR792), which is a record half-year
average price achieved
Operational Highlights - Cashew Operation
-- The Cashew Operation commenced pilot production in early 2022
-- Delays in final key equipment items have stalled the ramp-up
of production; however, with all key equipment now on site, we
expect to see a material increase in operating capacity shortly and
the Company will provide further updates as appropriate
Lincoln Moore, Dekel 's Executive Director , said: "To deliver
record EBITDA from the Palm Oil Operation despite the unprecedented
low high season production period was an excellent outcome. With
CPO prices continuing to trade at long term highs, the Company is
well positioned to grow sales in H1 2023 should production volumes
return to historical levels.
"The Cashew Operation is now closing in on the completion of
full commissioning and is well placed to become a significant
contributor to the Group in 2023. With reasons to be optimistic
about the performance of both the Palm Oil Operation and the Cashew
Operation, we are excited about the potential to grow the Company's
sales and financial performance in the future."
Conference Call
Dekel Agri-Vision Plc is pleased to announce that Lincoln Moore,
Youval Rasin and Shai Kol will provide a live presentation in the
form of a Q&A relating to interim results for the six months
ended 30 June 2022 via the Investor Meet Company platform on 28 Sep
2022 at 12.30 p.m. BST.
The presentation is open to all existing and potential
shareholders. Questions can be submitted via your Investor Meet
Company dashboard up until 9.00 a.m. BST the day before the meeting
or at any time during the live presentation.
Investors can sign up to Investor Meet Company for free and add
to meet Dekel Agri-Vision Plc via:
https://www.investormeetcompany.com/dekel-agri-vision-plc/register-investor
Investors who already follow Dekel Agri-Vision Plc on the
Investor Meet Company platform will automatically be invited.
This announcement contains inside information for the purposes
of Article 7 of the UK version of Regulation (EU) No 596/2014 which
is part of UK law by virtue of the European Union (Withdrawal) Act
2018, as amended ("MAR"). Upon the publication of this announcement
via a Regulatory Information Service, this inside information is
now considered to be in the public domain.
**S **
For further information please visit the Company's website
www.dekelagrivision.com or contact:
Dekel Agri-Vision Plc
Youval Rasin
Shai Kol
Lincoln Moore +44 (0) 207 236 1177
WH Ireland Ltd (Nomad and Joint Broker)
James Joyce
Ben Good +44 (0) 20 7220 1666
Optiva Securities Limited (Joint Broker)
Christian Dennis
Daniel Ingram +44 (0) 203 137 1903
Notes:
Dekel Agri-Vision Plc is a multi-project, multi-commodity
agriculture company focused on West Africa. It has a portfolio of
projects in Côte d'Ivoire at various stages of development: a fully
operational palm oil project in Ayenouan where fruit produced by
local smallholders is processed at the Company's 60,000tpa capacity
crude palm oil mill and a cashew processing project in Tiebissou,
which commenced production in early January 2022.
CHAIRMAN'S STATEMENT
H1 2022 saw CPO prices reach record highs which greatly assisted
the H1 2022 financial outcomes during an unusually low high season
production period. In addition, strong mill operational performance
which saw a material improvement in CPO extraction rates and well
controlled overhead costs, despite global inflation, contributed to
the solid platform to enable the Palm Oil Operation to deliver a
record net profit after tax.
The Cashew Operation took significant strides during H1 2022 to
full production despite post Covid-19 supply chain disruptions
impacting our supplier delivery timetables. With all key equipment
now on site and the final commissioning phase well advanced, we
believe we have passed the most challenging stage of delivering the
Cashew Operation towards its full capacity and we are well placed
to deliver our objective of processing 10,000tn of Raw Cashew Nuts
('RCN') in 2023.
Palm Oil Operation
January 2022 production volumes started reasonably well
following on from a record production period in H2 2021. However,
the typical high season which peaks from February through May did
not eventuate as normal leading to, by far, the weakest production
high season the Company has seen since the Palm Oil Operation
commenced in 2014. This low production was experienced region-wide;
however, there is expectation among local experts that the
variation is short-term and we should see a rebound in volumes. As
we head towards the back end of September, we are seeing some
improvements in volumes but it is difficult to accurately predict
short-term volume variations. What we can do is focus on things we
can control and we are currently undertaking a full review of our
milling operations to ensure we are ready when volumes increase, so
that the Company can take advantage of a supportive pricing
environment.
Record CPO and PKO prices were achieved in H1 2022 and prices
currently remain close to all-time highs. Medium-term, we continue
to be bullish on CPO prices and, should short-term prices remain in
the EUR900-1,000tn range and volumes normalise to historical
levels, the Directors believe the Palm Oil Operation performance
can exceed the outcomes of H1 2021 and H1 2022.
Cashew Operation
The Cashew Operation has a stated objective to process 10,000tn
of RCN in 2023. The Directors' view remains unchanged in that the
Cashew Operation could in time potentially exceed the Palm Oil
Operation in terms of profit contribution to the Group. The Cashew
project is being developed in such a way that capacity can be
increased significantly in short order. With a nameplate capacity
of 15,000 tonnes per annum ('tpa'), production at the plant can be
ramped up by 50% at no extra cost by simply increasing the number
of shifts from two to three per day. From 15,000tpa and at a capex
cost of EUR5-6 million, the mill's capacity can be doubled to
30,000tpa, which the Directors estimate could generate revenues in
the region of approximately EUR40 million per annum based on
current prices.
Other Projects
Whilst we have further expansion plans, including the processing
of a third commodity in addition to clean energy aspirations, these
projects are on hold as we focus on the execution of the Cashew
Operation which we believe will play a key role in enhancing the
Group's financial outcomes in 2023.
Group Financial
A summary of the financial performance for H1 2022, in addition
to the comparatives for the previous 5 years, is outlined in the
table below.
H1 2022 H1 2021 H1 2020 H1 2019 H1 2018 H1 2017
CPO production (tonnes) 16,893 26,515 23,882 28,934 22,242 26,947
---------- ---------- ---------- ---------- ---------- ----------
Average CPO price
per tonne EUR1,013 EUR817 EUR602 EUR505 EUR549 EUR707
---------- ---------- ---------- ---------- ---------- ----------
Total Revenue (all
products) EUR19.7m EUR21.7m EUR15.4m EUR14.6m EUR14.1m EUR19.6m
---------- ---------- ---------- ---------- ---------- ----------
Gross Margin EUR5.0m EUR4.9m EUR2.6m EUR2.3m EUR2.1m EUR5.0m
---------- ---------- ---------- ---------- ---------- ----------
Gross Margin % 25.4% 22.6% 16.9% 15.8% 14.9% 25.5%
---------- ---------- ---------- ---------- ---------- ----------
Overheads (EUR1.7m) (EUR1.7m) (EUR1.4m) (EUR1.5m) (EUR1.6m) (EUR1.8m)
---------- ---------- ---------- ---------- ---------- ----------
EBITDA EUR4.0m EUR3.9m EUR1.9m EUR1.4m EUR1.1m EUR3.7m
---------- ---------- ---------- ---------- ---------- ----------
Net Profit / (Loss)
After Tax EUR2.3m EUR2.0m EUR0.5m (EUR0.1m) (EUR0.5m) EUR2.4m
---------- ---------- ---------- ---------- ---------- ----------
Dekel achieved record H1 2022 EBITDA of EUR4.0m and net profit
after tax of EUR2.3m. This was driven by record CPO and PKO prices
and a 1 percentage point improvement in CPO extraction rates to
22.4%. This drove an improvement in the H1 2022 Gross Margin
percentage to 25.4% (H1 2022: 22.6%). H1 2022 overheads were well
controlled during a period of ongoing inflation, remaining flat at
EUR1.7m (H1 2021: EUR1.7m).
H1 Operating Cashflow of EUR4.8m (H1 2021 EUR2.4m outflow) was
reflective of the solid operating performance of the Palm Oil
Operation. Given the Cashew Operation has not completed full
commissioning, ongoing capital expenditure and the capitalisation
of the commissioning costs resulted in a EUR2.6m outflow and a
further EUR2.3m was utilised for loan repayments. The final
drawdown of approximately EUR9.2m from the Company's existing
approximately EUR15.2m seven-year bond facility has further
strengthened Dekel's cash position and provided key working capital
to support the ramp up of the Cashew Operation. Our consistently
stated two to three year strategy remains unchanged in terms of
"utilising the principal grace periods of the bond facility to
ensure we are well funded internally while we build our cash base
from the material uplift in operating cash flow expected as the
Palm Oil Operation and Cashew Operation work in tandem. Dekel will
then have optionality to either pay down debt or access lower cost
financing to fund future growth plans and, at the appropriate time,
look to recommence a dividend programme, thereby providing
shareholders with a yield as well as capital growth."
Outlook
The Company has been able to deliver a record H1 2022 financial
performance whilst weathering the challenges of unprecedented low
volumes in the Palm Oil Operation and delays with ramp up in the
capacity of the Cashew Operation. Whilst it will be challenging to
replicate in the second half of the year the record Palm Oil
Operation results achieved in H1 2022 based on current volumes, we
have an excellent platform to deliver sustained profitability from
the Palm Oil Operation in 2023 as well see the Cashew Operation
transition to a consistent and long-term financial contributor to
Group performance. The Directors remain optimistic about the next
6-12 months.
I would like to thank the Board, Management, our employees and
advisers for their support and hard work over the course of the
year.
Andrew Tillery
Non-Executive Chairman Date: 22 September 2022
DEKEL AGRI-VISION PLC.
INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
AS OF 30 JUNE 2022
EUROS IN THOUSANDS
UNAUDITED
INDEX
Page
-------
Interim Condensed Consolidated Statements of Financial
Position 2 - 3
Interim Condensed Consolidated Statements of Comprehensive
Income 4
Interim Condensed Consolidated Statements of Changes
in Equity 5 - 6
Interim Condensed Consolidated Statements of Cash
Flows 7 - 8
Notes to the Interim Condensed Consolidated Financial
Statements 9 - 14
- - - - - - - - - - -
CONSOLIDATED STATEMENTS OF FINANCIAL POSITION
30 June 31 December
2022 202 1
--------- -----------
Unaudited Audited
--------- -----------
Euros in thousands
----------------------
ASSETS
CURRENT ASSETS:
Cash and cash equivalents 756 1,595
Trade receivables - 1,487
Inventory 3,370 3,240
Deposits in banks 357 595
Accounts and other receivables 224 365
--------- -----------
Total current assets 4,707 7,282
--------- -----------
NON-CURRENT ASSETS:
Deposits in banks 517 501
Property and equipment, net 45,786 43,892
--------- -----------
Total non-current assets 46,303 44,393
--------- -----------
Total assets 51,010 51,675
========= ===========
The accompanying notes are an integral part of the consolidated
financial statements.
CONSOLIDATED STATEMENTS OF FINANCIAL POSITION
30 June 31 December
2022 202 1
--------- -----------
Unaudited Audited
--------- -----------
Euros in thousands
----------------------
LIABILITIES AND EQUITY
CURRENT LIABILITIES:
Short-term loans and current maturities of
long-term loans 2,957 5,431
Trade payables 786 1,374
Advance payments from customers 834 108
Loan from non-controlling interest 915 915
Other accounts payable and accrued expenses 2,574 2,646
--------- -----------
Total current liabilities 8,066 10, 4 74
NON-CURRENT LIABILITIES:
Long-term lease liabilities 39 169
Accrued severance pay, net 179 135
Long-term loans 24,059 24,562
--------- -----------
Total non-current liabilities 24,277 24,866
--------- -----------
Total liabilities 32,343 35,340
--------- -----------
EQUITY ATTRIBUTABLE TO EQUITY HOLDERS OF THE
COMPANY
Share capital 170 170
Additional paid-in capital 40,034 39,98 5
Accumulated deficit (15,633) (17,971)
Capital reserve 2,532 2,532
Capital reserve from transactions with non-controlling
interests (8,710) (8,710)
--------- -----------
18, 393 16,006
Non-controlling interests 274 329
--------- -----------
Total equity 18, 667 16,335
--------- -----------
Total liabilities and equity 51,010 51,675
========= ===========
The accompanying notes are an integral part of the interim
consolidated financial statements.
22 September,
2022
-----------------
Date of approval Youval Rasin Yehoshua Shai Lincoln John Moore
of the financial Director and Chief Kol Director and Executive Director
statements Executive Officer Chief Finance
Officer
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
Six months ended Year ended
30 June 31 December
------------------------
2022 202 1 2021
----------- ----------- ------------
Unaudited Audited
------------------------ ------------
Euros in thousands
(except per share amounts)
--------------------------------------
Revenues 19,661 21,691 37,391
Cost of revenues (14,651) (16,841) 30,880
----------- ----------- ------------
Gross profit 5,010 4,850 6,511
General and administrative 1,650 1,745 3,869
----------- ----------- ------------
Operating profit (loss) 3,360 3,105 2,642
Finance cost 881 1,069 1,726
----------- ----------- ------------
Income (loss) before taxes on income 2,479 2,036 916
Taxes on income 196 15 2 75
----------- ----------- ------------
Net income and total comprehensive
income 2,283 2,021 641
=========== =========== ============
Attributed to :
Equity holders of the Company 2,338 2,072 757
Non-controlling interest (55) (51) (116)
----------- ----------- ------------
2,283 2,021 641
=========== =========== ============
Income per share attributable to equity
holders of the Company (in Euros):
Basic and diluted income per share 0.00 0.00 0.00
=========== =========== ============
Weighted average number of shares
used in computing basic and diluted
income per share 537,676,970 520,302,349 528,368,244
=========== =========== ============
The accompanying notes are an integral part of the interim
consolidated financial statements.
CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY
Attributable to equity holders of the Company
------------------------------------------------------------------
Capital
reserve
from
transactions
Additional with Non -
Share paid-in Accumulated Capital non-controlling controlling Total
capital capital deficit reserve interests Total interest equity
------- ---------- ----------- ------- --------------- ------ ----------- ------
Euros in thousands
---------------------------------------------------------------------------------------
Balance as of 1
January 2022
(audited) 170 39,985 (17,971) 2,532 (8,710) 16,006 329 16,335
Net income and
total
comprehensive
income - - 2,338 - - 2,338 (55) 2,283
Issuance of
shares *) 49 49 49
Balance as of
30
June 2022
(unaudited) 170 40,034 (15,633) 2,532 (8,710) 18,393 274 18,667
======= ========== =========== ======= =============== ====== =========== ======
Attributable to equity holders of the Company
------------------------------------------------------------------
Capital
reserve
from
transactions
Additional with Non -
Share paid-in Accumulated Capital non-controlling controlling Total
capital capital deficit reserve interests Total interest equity
------- ---------- ----------- ------- --------------- ------ ----------- ------
Euros in thousands
---------------------------------------------------------------------------------------
Balance as of 1
January 2021
(audited) 142 35,570 (18,728) 2,532 (7,754) 11,762 700 12,462
Net income and
total
comprehensive
income - - 2,072 - - 2,072 (51) 2,021
Issuance of
shares 1 3,743 - - 3,744 - 3,744
Acquisition of
non-controlling
interests - 404 - - (957) (553) (254) (807)
Contribution to
equity by
non-controlling
interest - - - - - - 116 116
Share-based
compensation - 147 - - - 147 - 147
Balance as of 30
June 2021
(unaudited) 143 39,864 (16,656) 2,532 (8,711) 17,172 511 17,683
======= ========== =========== ======= =============== ====== =========== ======
The accompanying notes are an integral part of the interim
consolidated financial statements.
CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY
Attributable to equity holders of the Company
------------------------------------------------------------------
Capital
reserve
from
transactions
Additional with Non -
Share paid-in Accumulated Capital non-controlling controlling Total
capital capital deficit reserve interests Total interest equity
------- ---------- ----------- ------- --------------- ------ ----------- ------
Euros in thousands
---------------------------------------------------------------------------------------
Balance as of 1
January 2021
(audited) 142 35,570 (18,728) 2,532 (7,754) 11,762 700 12,462
Net income and
total
comprehensive
income - - 757 - - 757 (116) 641
Issuance of
shares 26 3,720 - - - 3,745 - 3,745
Acquisition of
non-controlling ( 956 ( 808
interests 2 401 - - ) (553) (255) )
Share-based
compensation - 295 - - - 295 295
Balance as of 31
December 2021
(audited) 170 39,985 (17,971) 2,532 (8,710) 16,006 329 16,335
======= ========== =========== ======= =============== ====== =========== ======
The accompanying notes are an integral part of the interim
consolidated financial statements.
CONSOLIDATED STATEMENTS OF CASH FLOWS
Six months ended Year ended
30 June 31 December
------------------
2022 202 1 2021
------- --------- ------------
Unaudited Audited
------------------ ------------
Euros in thousands
--------------------------------
Cash flows from operating activities:
Net income 2,283 2,021 641
Adjustments to reconcile net income
to net cash provided by (used in)
operating activities:
Adjustments to the profit or loss
items:
Depreciation 679 747 1,888
Share-based compensation - 147 295
Accrued interest on long-term loans
and non-current liabilities 898 891 1 ,188
Change in employee benefit liabilities,
net 44 117 (103)
Changes in asset and liability items:
Increase in inventories (130) (3,040) (1,957)
Decrease (increase) in accounts and
other receivables 1,628 (432) (1,296)
Decrease (increase) in bank deposit 222 (470) -
Increase (decrease) in trade payables (567) 301 498
Increase (decrease) in advance from
customers 726 (1,971) (1,863)
Increase (decrease) in accrued expenses
and other accounts payable (72) (57) 859
------- --------- ------------
3,428 (3,767) (491)
------- --------- ------------
Cash paid during the period for:
Income taxes - - (264)
Interest (898) (693) ( 1 ,188)
------- --------- ------------
(898) (693) (1,452)
------- --------- ------------
Net cash provided by (used in) operating
activities 4,813 (2,439) (1,302)
------- --------- ------------
The accompanying notes are an integral part of the interim
consolidated financial statements.
CONSOLIDATED STATEMENTS OF CASH FLOWS
Six months ended Year ended
30 June 31 December
------------------
2022 202 1 2021
-------- -------- ------------
Unaudited Audited
------------------ ------------
Euros in thousands
--------------------------------
Cash flows from investing activities:
Increase in deposits - - (814)
Purchase of property and equipment (2,573) (3,156) (4,568)
-------- -------- ------------
Net cash provided by (used in) investing
activities (2,573) (3,156) (5,382)
-------- -------- ------------
Cash flows from financing activities:
Issue of shares (offering net proceeds) - 3,726 3,726
Cash paid on acquisition of non-controlling
interests - - (806)
Long-term lease (130) (6) (23)
Loan to subsidiary by non-controlling
interests - 765 915
Receipt (payment) of short-term loans,
net (2,279) (670) 605
Receipt of long-term loans 520 5,991 5,997
Repayment of long-term loans (1,218) (1,265) (2,338)
-------- -------- ------------
Net cash provided by (used in) financing
activities (3,107) 7,734 8,077
-------- -------- ------------
Increase in cash and cash equivalents (867) 2,139 1,393
Cash and cash equivalents at beginning
of period 1,595 202 202
-------- -------- ------------
Cash and cash equivalents at end of
period 756 2,341 1,595
======== ======== ============
Supplemental disclosure of non-cash
activities:
Issuance of shares in consideration
for investment in Pearlside 403 404 403
======== ======== ============
The accompanying notes are an integral part of the interim
consolidated financial statements.
NOTE 1:- GENERAL
a. These financial statements have been prepared in a condensed
format as of June 30, 2022, and for the six months then ended
("interim consolidated financial statements"). These financial
statements should be read in conjunction with the Company's annual
financial statements as of December 31, 2021 and for the year then
ended and accompanying notes ("annual consolidated financial
statements").
b. Dekel Agri-Vision PLC (the "Company") is a public limited
company incorporated in Cyprus on 24 October 2007. The Company's
Ordinary shares are admitted for trading on the AIM, a market
operated by the London Stock Exchange. The Company is engaged
through its subsidiaries in developing and cultivating palm oil
plantations in Cote d'Ivoire for the purpose of producing and
marketing Crude Palm Oil ("CPO"). The Company's registered office
is in Limassol, Cyprus.
c. CS DekelOil Siva Ltd. ("DekelOil Siva") a company
incorporated in Cyprus, is a wholly-owned subsidiary of the
Company. DekelOil CI SA, a subsidiary in Cote d'Ivoire currently
held 99.85% by DekelOil Siva, is engaged in developing and
cultivating palm oil plantations for the purpose of producing and
marketing CPO. DekelOil CI SA constructed and is currently
operating its first palm oil mill.
d. Pearlside Holdings Ltd. ("Pearlside") a company incorporated
in Cyprus, is a subsidiary of the Company since December 2020.
Pearlside has a wholly-owned subsidiary in Cote d'Ivoire, Capro CI
SA ("Capro"). Capro is currently constructing a Raw Cashew Nut
(RCN) processing plant in Cote d'Ivoire near the village of
Tiebissou.
e. DekelOil Consulting Ltd. a company located in Israel and a
wholly-owned subsidiary of DekelOil Siva and is engaged in
providing services to the Company and its subsidiaries.
f. The outbreak of Coronavirus, a virus causing potentially
deadly respiratory tract infections originating in China and
spreading in various jurisdictions, had a significant effect on the
global economic conditions and CPO prices but it had no significant
effect on the Company's operations during H1 2022. The outbreak of
Coronavirus may resume its negative affect on economic conditions
regionally as well as globally, disrupt operations situated in
countries particularly exposed to the contagion, affect the
Company's customers and suppliers or business practices previously
applied by those entities, or otherwise impact the Company's
activities. Governments in affected countries are imposing travel
bans, quarantines and other emergency public safety measures. Those
measures, though apparently temporary in nature, may continue and
increase depending on developments in the virus' outbreak. The
ultimate severity of the Coronavirus outbreak is uncertain at this
time and therefore the Company cannot reasonably estimate the
impact it may have on its end markets and its future revenues,
profitability, liquidity
and financial position.
g. Working capital deficiency.
The Group generated a record positive cash flow from operations
of EUR4.8 million, representing a material increase in relation to
the negative cash flow of (EUR2.4) million in H1 2021. This cash
flow enabled the Group to continue its investments in the
development of its RCN processing plant. As of 30 June 2022, the
Group has a working capital deficiency of EUR3.3 million similar to
the 31 December 2021 amount. Post 30 June 2022, the Group also
completed a final drawdown from the bond facility which included a
three year principal grace period which has further bolstered the
Group cash position (see also Note 4). The Group has prepared
detailed forecasted cash flows through the end of 2023, which
indicate that the Group should have positive cash flows from its
operations. However, the operations of the Group are subject to
various market conditions, including quantity and quality of fruit
harvests and market prices that are not under the Group's control
that could have an adverse effect on the Group's future cash
flows.
Based on the above, Company management believes it will have
sufficient funds necessary to continue its operations and to meet
its obligations as they become due for at least a period of twelve
months from the date of approval of the financial statements.
NOTE 2:- SIGNIFICANT ACCOUNTING POLICIES
a. Basis of preparation of the interim consolidated financial statements:
The interim consolidated financial statements have been prepared
in accordance with IAS 34, "Interim Financial Reporting".
The significant accounting policies applied in the preparation
of the interim consolidated financial statements are consistent
with those followed in the preparation of the annual consolidated
financial statements for the year ended 31 December, 2021, except
as described below.
b. Fair value of financial instruments:
The carrying amounts of the Company's financial instruments
approximate their fair value.
c. Initial adoption of amendments to existing financial reporting and accounting standards:
1. Amendment to IAS 16, "Property, Plant and Equipment":
In May 2020, the IASB issued an amendment to IAS 16, "Property,
Plant and Equipment" ("the Amendment"). The Amendment prohibits a
company from deducting from the cost of property, plant and
equipment ("PP&E") consideration received from the sales of
items produced while the company is preparing the asset for its
intended use. Instead, the company should recognize such
consideration and related costs in profit or loss.
The Amendment is effective for annual reporting periods
beginning on or after January 1, 2022. The Amendment is to be
applied retrospectively, but only to items of PP&E made
available for use on or after the beginning of the earliest period
presented in the financial statements in which the company first
applies the Amendment.
The cumulative effect of initially applying the Amendment is
recognized as an adjustment to the opening balance of retained
earnings at the beginning of the earliest period presented.
The application of the Amendment did not have a material impact
on the Company's interim financial statements.
NOTE 3:- OPERATING SEGMENTS
a. General:
The operating segments are identified on the basis of
information that is reviewed by the Company's management to make
decisions about resources to be allocated and assess its
performance. Accordingly, for management purposes, the Group is
organised into two operating segments based on the two business
units the Group has. The two business units are incorporated under
two separate subsidiaries of the Company, the CPO production unit
is incorporated under CS DekelOil Siva Ltd and its subsidiary and
the RCN processing plant under construction is incorporated under
Pearlside Holdings Ltd and its subsidiary.
Segment performance (segment income (loss)) and the segment
assets and liabilities are derived from the financial statements of
each separate group of entities as described above. Unallocated
items are mainly the Group's headquarter costs, finance expenses
and taxes on income.
b. Reporting operating segments:
Crude Palm Raw Cashew
Oil Nut Total
---------- ---------- -------
Six months ended
30 June 2022 (unaudited):
Revenues-External
customers 19,661 - 19,661
========== ========== =======
Segment profit (loss) 3,742 (188) 3,554
========== ========== =======
Unallocated corporate
expenses (195)
Finance cost (880)
---------- ---------- -------
Profit before taxes
on income 2,479
Depreciation and
amortization (679) - (679)
Six months ended
30 June 2021 (unaudited):
Revenues-External
customers 21,691 - 21,691
========== ========== =======
Segment profit (loss) 3,582 (160) 3,422
Unallocated corporate
expenses (317)
Finance cost (1,069)
Profit before taxes
on income (2,036)
Depreciation and
amortization (747) - (747)
========== ========== =======
Euros in thousands
-------------------------------
Year ended 31 December
2021(audited):
Revenues-External
customers 37,391 - 37,391
========== ========== =======
Segment profit (loss) 3,830 (391) 3,439
========== ========== =======
Unallocated corporate
expenses (797)
Finance cost (1,809)
---------- ---------- -------
Profit before taxes
on income 833
Depreciation and
amortization (1,888) - (1,888)
Crude Palm Raw Cashew
Oil Nut Total
---------- ---------- ------
Euros in thousands
------------------------------
As of 30 June 2022
(unaudited):
Segment assets 30,220 20,790 51,010
Segment liabilities 21,872 10,491 32,343
As of 31 December
2021 (audited):
Segment assets 33,393 18 ,199 51,592
========== ========== ======
Segment liabilities 24,180 10,943 35,123
========== ========== ======
NOTE 4:- SUBSEQUENT EVENTS
On July 25 the Company completed its final drawdown of
approximately EUR9.2 million (6 million FCFA) from the
approximately EUR15.2 million (10 million FCFA) seven-year bond
facility. The final bond drawdown has a fixed interest rate of
7.25%, and it has three years grace on principal repayment.
The initial use of the funds was to partially repay the AgDevCo
Limited ("AgDevCo") loan and a first payment of EUR3.6 million has
been made to AgDevCo reducing the loan by 50% from approximately
EUR7.2 million to approximately EUR3.6 million.
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END
IR PPUBWBUPPGRG
(END) Dow Jones Newswires
September 22, 2022 02:01 ET (06:01 GMT)
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