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Dekeloil Public Ltd upbeat as production and prices rise

Last updated: 20:31 05 Apr 2016 AEST, First published: 17:31 05 Apr 2016 AEST

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Sales amounted 12,082 tonnes of crude palm oil at an average price of €532 per tonne

DekelOil Public Limited (LON:DKL) produced substantially more palm oil than even it expected in its latest quarter.

Output from the 51% owned Ayenouan palm oil project in the Ivory Coast rose by 56% (like-for-like) to 15,141 tonnes versus a year ago.

February and March were record months and DekelOil said prices had also started to recover while gross margins had increased considerably compared to 2015.

“Having recently re-financed our debt on more attractive terms, and with production going from strength to strength, DekelOil has never been in a better position, both operationally and financially,” said Lincoln Moore, executive director.

Broker Cantor agreed and raised its forecasts for both this year and the next while the target price goes up to 2.25p.

The broker expects profits of €4.5mln in 2016 and €7.3mln in 2017 and says the Ivory Coast firm is now becoming a serious player in the palm oil market.

New logistics arrangements are working aided by better market pricing.

Sales in the quarter amounted to 12,082 tonnes of crude palm oil at an average price of €532 per tonne, though early sales in April were at prices 10% higher.

Oil palm fruit processed through its new mill rose to 65,610 tonnes of bunches, up from 40,448 tonnes a year previously, at an extraction rate of 23.1%.

Output of the higher added value palm kernel oil (PKO) and palm kernel cake (PKC) also increased as a new processing plant came onstream.

DekelOil produced 983 tonnes of PKO and 1,355 tonnes of PKC with 851 tonnes of PKO sold at an average price per tonne of €753 and 1,014 tonnes of PKC sold at an average price per tonne of €43.

Lincoln Moore, executive director, said first quarter production had ‘materially’ exceeded both internal and external expectations.

DekelOil's regional reputation is that of a highly professional and reliable operator, he added, which is seeing more farmers bring their fruit bunches to the company.

Shares were 1.4p valuing the company at £21.6mln.

 

-updates for broker comment, share price--

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