Dekel Agri-vision Plc · LSE:DKL
Dekel Agri-vision — DekelOil Public — FY2018 Earnings Presentation
27 slides from Dekel Agri-vision's earnings presentation, July 2019
Slide 1: An established West African focused agricultural company
An established West African focused agricultural company DekelOil Public Limited: 2018 Results Presentation July 2019
Slide 2: Disclaimer
DISCLAIMER This presentation has been prepared by DekelOil Public Limited (the “Company”). By attending this presentation and/or reviewing the slides you agree to be bound by the followingconditions. The information and opinions contained in this presentation have not been independently verified, ar
Slide 3: Building a leading West African Agricultural Company
COMPANY OVERVIEW Building a leading West African Agricultural Company AIM traded multi-project, multi-commodity Three core projects in Cote d’Ivoire at agricultural company focused on West Africa various stages of development: Palm Oil Collaborative model centred on working closely • Ayenouan: produ
Slide 4: DekelOil - 18 Month Recap
CORPORATE DekelOil - 18 Month Recap Q2 2019 Q1 2018 Production FY2017 record Production Share price and volume graph update production update update 12 Full Year 8000000 2018 2018 Final Q2 2018 Q3 2018 Production Results Production Production update 7000000 update update 10 Q1 2019 2017 Final Produc
Slide 5: Key Financials - 2018 Finals
CORPORATE Key Financials - 2018 Finals Operating Results 2018 2017 FFB collected (tonnes) 146,036 171,696 CPO production (tonnes) 33,077 38,736 CPO sales (tonnes) 32,692 38,373 Average CPO price (tonnes) €542 €680 Revenue (all products) €20.9m €30.2m Gross profit €1.7m €6.9m Gross margin % 8.3% 22.9
Slide 6: 2018: A challenging year for global and local palm oil industries
AYENOUAN rporate PROJECT 2018: A challenging year for global and local palm oil industries An abnormal combination of negative trading conditions Macro conditions: • Poor harvest year - 15% year on year reduction in local market FFB compared to 2017 • Weak global CPO prices - 21% fall in year on yea
Slide 7: Efforts to mitigate challenging trading conditions
CORPORATE Efforts to mitigate challenging trading conditions • 12% decrease in general administration expenses • Establishment of fourth logistics centre to facilitate delivery of local smallholder fruit to the mill • Acquisition of external supplies of kernels for processing into PKO and PKC from m
Slide 8: 2018 Debt Structure
DEBT STRUCTURE 2018 Debt Structure Debt Structure Interest December rate 2018 Long Term Loans €’000 • Challenging trading conditions has placed pressure on Balance Sheet SGBCI 7% 110 gearing SIB 8.2% 602 NSIA 7.1%, 6,558 8.4% • Commenced working on a debt Sogebourse 6.9% 10,023 restructuring plan in
Slide 9: Half Year Production – 2019
CORPORATE Half Year Production – 2019 Recovery in year on year volumes of FFBs harvested drove strong rebound in H1 CPO production Q2 2019 Q2 2018 Change H1 2019 H1 2018 Change FFB collected (tonnes) 62,577 36,664 +70.7% 131,917 96,195 +37.1% CPO production (tonnes) 14,013 8,637 +62.2% 28,934 22,242
Slide 10: H1 2019 Harvest
AYENOUAN PROJECT H1 2019 Harvest Recovery in year on year volumes of FFBs harvested drove strong rebound in H1 CPO production • 28,934 tonnes of CPO produced at Ayenouan mill during H1 2019 compared to 22,242 in H1 2018: • Q1 2019: 14,921 tonnes of CPO produced compared to 2018's Q1 performance of 1
Slide 11: CPO Price Decline Impacting all AIM and West Africa Palm oil Players
CORPORATE CPO Price Decline Impacting all AIM and West Africa Palm oil Players Equatorial Palm Oil (PAL) Anglo Eastern Plantations (AEP) 2 800 1.5 600 GBX GBX 1 400 0.5 200 0 0 DekelOil plc (DKL) R.E.A. Holdings plc (RE.) 10 400 GBX 5 300 GBX 200 0 100 0 M. P. Evans Group plc (MPE) Feronia (FRN) 100
Slide 12: 2019: Global Crude Palm Oil Prices Explained
CORPORATE 2019 : Global Crude Palm Oil Prices Explained • Drop in CPO prices mainly relates to supply side issues • Short term structural interference has been the major causes of short term price decline • Increase in India CPO import tariffs to support local soybean production • China withholding
Slide 13: 2020: A global short of vegetable oil expected with price spike expected
CORPORATE 2020 : A global short of vegetable oil expected with price spike expected Growth of Palm Oil area in Malaysia and Indonesia, Year on Year 18 Year on year area growth % 16 • Palm Oil supply growth is 14 12 slowing – Malaysian and 10 Indonesia CPO growth is 8 6 almost at a standstill 4 2 0 1
Slide 14: Vertically Integrated Cashew Project
CASHEW PROJECT Vertically Integrated Cashew Project Excellent Economics Near Term Revenue Potential • Ownership of 37.8% with additional option to acquire 17% • Relationships in place with cooperatives and local procurement agents • Higher gross margins expected than from palm oil operation • Provid
Slide 15: Highly attractive economics of processing cashews
CASHEW PROJECT Highly attractive economics of processing cashews • Processed cashews in Cote d’Ivoire currently sell for US$11.05/kg for whole nuts and US$7.50/kg for broken nuts compared to US$1.18/ kg RCN purchase price • Processing 10,000tpa of RCNs has the potential to generate > US$20 million i
Slide 16: Focused on developing sustainable palm oil projects in line with RSPO standards
SOCIAL AND ENVIRONMENT Focused on developing sustainable palm oil projects in line with RSPO standards • RSPO member - certification in process • Working with Proforest, an internationally recognised consulting group, to implementsocial and environmental programmes • Majority of planting on previous
Slide 17: Strategic initiatives to build a multi-project, multi-commodity producer
CORPORATE Strategic initiatives to build a multi-project, multi-commodity producer Normalisation and further organic growth of palm oil operation Strengthen balance sheet via refinancing of debt at longer tenure Development of cashew project to diversify and scale up revenues New ventures to further
Slide 18: Investment Case
CORPORATE Investment Case • West African focused agricultural company with portfolio of multi- stage projects including producing palm oil operation • Expansion of Group with further palm oil project and diversification into cashew nuts • Cashew processing project expected to be commissioned mid 202
Slide 19: Appendices
CORPORATE Appendices DekelOil Public Limited: Results Presentation July 2019 19
Slide 20: Collaborative model benefits local smallholders, stakeholders and shareholders
COMPANY OVERVIEW Collaborative model benefits local smallholders, stakeholders and shareholders Identify shortfall in local processing capacity Establish nursery to supply local Accelerates cash flow farmers with higher yielding plants generation and profitability Construct state of the art facility
Slide 21: Excellent Location, Modern Infrastructure
COMPANY OVERVIEW Excellent Location, Modern Infrastructure Operational palm oil project at Ayenouan, 2 hours from Abidjan’s port Cashew Processing Project under development at Tiebissou, 3 hours from Abidjan’s port Expansion land at Guitry, 4 hours from Abidjan’s port Advantageous locations with goo
Slide 22: Overview
AYENOUAN PROJECT Overview • Vertically integrated palm oil project including state of the art nursery, processing mill and logistics network • Includes one of West Africa’s largest crude palm oil (CPO) mills • Fresh Fruit Bunches (FFB) for Mill sourced from over 3,000 smallholders and 1,900ha of mat
Slide 23: State of the art 60,000tpa Mill
AYENOUAN PROJECT State of the art 60,000tpa Mill DekelOil Public Limited: Results Presentation July 2019 23
Slide 24: Feedstock for the Mill
AYENOUAN PROJECT Feedstock for the Mill A blend of smallholder feedstock due to regional surplus supply and company estates which will come into maturity in the near term Smallholder Estates Company Estates • Relationships with 3,000 small holders and several • 1,900ha planted to date at Ayenouan co
Slide 25: Favourable dynamics of global and regional cashew markets
CASHEW PROJECT Favourable dynamics of global and regional cashew markets • 830,000Mt consumed globally in 2017 – primary end markets are food and health • 8% forecast annual growth in demand – outstrips 6% annual increase in supply since 1990 • Côte d’Ivoire second largest producer globally and larg
Slide 26: Board of Directors
CORPORATE Board of Directors 25 years operational management and private equity experience in Africa and other emerging markets including 10 years as a CEO in Cote Andrew Tillery d'Ivoire, West Africa where he had responsibility for managing a group of oil palm operations and founded a natural rubbe
Slide 27: Contact
www.dekeloil.com DekelOil - UK Office 8 St. James’s Square St. James’s London SW1Y 4JU United Kingdom Lincoln Moore Executive Director lincoln@dekeloil.com