Dekel Agri-Vision Plc (LON:DKL) is the topic of conversation when DirectorsTalk Interviews caught up with analyst at WH Ireland Nick Spoliar.
Dekel Agri-Vision Plc has provided an August production update for its Ayenouan palm oil project in Côte d’Ivoire, what were the key highlights in your view?
Dekel’s production figures continue to indicate that this will be a strong year for the group’s palm oil operation, with palm oil production 38% ahead of last year in August, following record figures for some months during the high season earlier this year. While volumes have started to come down as Dekel enters the annual low season, we see the cumulative production in the year to date and strong pricing still being realised as encouraging.
How do today’s figures line up with your forecasts?
Cumulative production in the year to date is well in line with our expectations for the full year, giving us a good degree of confidence for the full year financial performance in the palm oil business.
How do you see the company in terms of fair value?
When operating at full capacity in FY2024, Dekel’s newly commissioned cashew processing operation should deliver a step change in the group’s profitability and cash generation, as this project goes from being a cash drain in recent years to a strong contributor for the group. We see potential for the shares to re-rate as this project is successfully executed and as the company reduces its borrowings following the completion of the investment phase of its cashew operation. Our fair value stands at 9.5p.
Dekel Agri-Vision Plc (LON:DKL), is a West African agriculture company focused on building a portfolio of sustainable and diversified projects.
