TIDMDKL
RNS Number : 3494A
Dekel Agri-Vision PLC
29 September 2020
Dekel Agri-Vision Plc / Index: AIM / Epic: DKL / Sector: Food
Producers
Dekel Agri-Vision Plc ('Dekel' or the 'Company')
2020 Interim Results and Shareholder Call
Dekel Agri-Vision Plc, the West African focused agriculture
company, is pleased to announce its interim results for the six
months ended 30 June 2020.
The Company will be hosting a shareholder conference call at 1pm
UK time on 6 October 2020. The call will be hosted by Executive
Director, Lincoln Moore and Deputy CEO Shai Kol, 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, as well as in the
presentation, which will be uploaded to the corporate website prior
to the conference call.
Financial Overview
As set out in the table below, with Revenues up 5% to EUR15.4
million; EBITDA up 36% to EUR1.9million; net profits up from a loss
of EUR0.1m to positive EUR0.4m - the Company's first half financial
performance has been a highly creditable one, particularly when set
against the backdrop of COVID-19.
H1 2020 H1 2019 % change
Revenue EUR15.4m EUR14.6m 5.5%
---------- ---------- ---------
Gross Margin EUR2.6m EUR2.3m 13.0%
---------- ---------- ---------
Gross Margin % 16.8% 15.7% 7.0%
---------- ---------- ---------
G&A (EUR1.4m) (EUR1.5m) 7.1%
---------- ---------- ---------
EBITDA EUR1.9m EUR1.4m 35.7%
---------- ---------- ---------
Net profit / (loss)
after tax EUR0.4m (EUR0.1m) Na
---------- ---------- ---------
Production - palm oil project, Ayenouan Côte d'Ivoire
-- Stronger year on year global Crude Palm Oil ('CPO') prices
and higher extraction rates more than offset lower CPO volumes
produced and sold during H1 2020
-- 19.21% increase in average realised sales price of EUR602 per tonne of CPO (H1 2019: EUR505)
o CPO prices rallied strongly to over US$850 per tonne in
January 2020 but quickly retraced back to as low as US$500 in
response to COVID-19 before recently recovering to around US$730
today as global logistics reopened
-- Significantly higher extraction rates due to higher quality
Fresh Fruit Bunches ('FFB') than last year particularly in Q2 2020
where the extraction rate achieved was 23.6% (Q2 2019 22.4%)
-- 23,882 tonnes of CPO produced in first half (H1 2019: 28,934
tonnes) follows 19.5% decrease in FFB delivered to mill to 106,188
tonnes (H1 2019: 131,917 tonnes) - in line with experience of other
operators in the region
-- 23,906 tonnes of CPO sold in H1 2020 (H1 2019: 26,702 tonnes)
-- ESG milestones achieved include roll-out of fruit
traceability programme across the region and maintaining 300 plus
staffing levels at Ayenouan despite COVID-19
Development - cashew processing project at Tiebissou in Côte
d'Ivoire
-- Construction now advancing well following a short delay in
manufacture of equipment in China and Italy due to COVID-19
-- Production on course to commence in Q2 2021 at which point
Tiebissou will become Dekel's second producing asset and provide
exposure to the high margin global cashew market
-- Tiebissou expected to lead to step-up in Dekel's revenue and
profitability as operations commence
New Ventures - proceeding cautiously due to COVID-19 and related
market uncertainty
-- Hybrid power project - feasibility study being undertaken by
JV partner Green Enesys on the development of a 30MW solar PV plant
and a 5-6MW biomass plant using feedstock from Ayenouan
-- New commodity project - one venture in Côte d'Ivoire being
actively considered as a new project for the Company following
positive results of internal feasibility study
Dekel Executive Director Lincoln Moore said, "The six month
review period has not only seen us navigate what must count among
the most challenging conditions seen for generations as a result of
COVID-19, but also post a material uplift in our EBITDA. With
global crude palm oil prices currently trading back at traditional
levels of around $750 per tonne level (compared to $550 this time
last year) and the trend of higher extraction rates being
maintained post period, we are extremely confident that our H2 2020
results will also show material improvement compared to H2
2019.
"Looking forward into 2021 we believe that the Company is well
positioned to enter a period of sustained growth in financial
performance. Together with the normalisation of palm oil prices,
the other key catalyst behind the step-up in performance is the
commencement of operations at Tiebissou and subsequent expansion in
cashew processing capacity at the project first from 10,000tpa to
15,000tpa before doubling up to 30,000 tpa. This also does not
include any contribution from our pipeline of projects which are
being advanced cautiously in light of the current environment. We
believe that despite the very challenging macro conditions we are
positioned as well as ever to deliver on our objective to build a
West African focused agro-industrial group, one which benefits all
stakeholders including the local communities around which our
business is centred, and I look forward to providing further
updates on progress made."
Conference Call
To participate in the conference call to be held at 1pm UK time
on 6 October 2020, please dial 0808 109 0701 , if you are calling
from outside of the UK please dial +44 (0) 20 3003 2701 and enter
participant pin 0044863# when prompted to do so. Please note that
all lines will be muted with the exception of Company management,
however the Company invites shareholders to submit questions to its
public relations adviser, St Brides Partners Ltd, ahead of the call
via email. Questions should be sent to
shareholderenquiries@stbridespartners.co.uk .
An updated presentation will be uploaded to the Company's
website on the morning of the call which will be referred to
throughout the call.
If you have any problems accessing the call, please contact St
Brides Partners Ltd on shareholderenquiries@stbridespartners.co.uk
or call +44 (0) 20 7236 1177.
The information contained within this announcement is deemed by
the Company to constitute inside information as stipulated under
the Market Abuse Regulations (EU) No. 596/2014 ('MAR'). Upon the
publication of this announcement via a Regulatory Information
Service ("RIS"), this inside information is now considered to be in
the public domain.
*S*
For further information please visit the Company's website at
www.dekelagrivision.com or contact:
Dekel Agri-Vision Plc
Youval Rasin
Shai Kol
Lincoln Moore +44 (0) 207 236 1177
Arden Partners Plc (Nomad and Joint Broker)
Paul Shackleton / Ruari McGirr /
Dan Gee-Summons (Corporate Finance)
Simon Johnson (Corporate Broking) +44 (0) 207 614 5900
Optiva Securities Limited (Joint Broker)
Christian Dennis
Jeremy King +44 (0) 203 137 1903
St Brides Partners Ltd (Investor Relations)
Frank Buhagiar
Cosima Akerman
Megan Dennison +44 (0) 207 236 1177
CHAIRMAN'S STATEMENT
Revenues up 5% to EUR15.4 million; EBITDA up 43% to
EUR1.9million; net profits up from a loss of EUR0.1m to profit of
EUR0.4 million - the Company's first half financial performance,
specifically that of our producing project, the crude palm oil
('CPO') operation at Ayenouan, Cote d'Ivoire, has been a highly
creditable one, particularly when set against the backdrop of
COVID-19.
Of course, Dekel has not been immune to the coronavirus. The H1
2020 results would likely have shown much larger percentage
increases than the above as the onset of the pandemic and the
associated lockdowns around the world led to a sharp contraction in
global demand for palm oil and the everyday food and personal care
products that the vegetable oil is used in. This in turn caused a
sharp reversal in CPO prices over the course of the six-month
period. Having traded as high as US$850 per tonne at the turn of
the year, prices retreated towards the US$500 level before staging
a recovery to today's US$730 prices.
At our large-scale cashew processing project in Tiebissou, Cote
d'Ivoire, the manufacture of infrastructure and milling equipment
in China and Italy respectively was temporarily suspended and as a
result, the target date for the commencement of operations has been
pushed out to Q2 2021, a delay of approximately three months.
Construction work at the site is now well underway and I am
confident that when it comes to writing next year's half year
statement, there will be two producing assets.
While the pandemic has affected the timelines for business
development activities, I am pleased to report that it has, to
date, not had a material adverse impact on our day to day
operations. In response to the coronavirus, we quickly put in place
a series of protocols and procedures in line with the prevailing
government advice to ensure the wellbeing of our staff and the
smallholders with whom we work closely with. Encouragingly, these
have not affected operations at our palm oil project in Ayenouan
and we take great pride in not having had to reduce local staffing
numbers from the 300 plus level it was before the pandemic. The
improved H1 financial performance, uninterrupted palm oil
production operations, and the progress made at the cashew project
underline the resilience of Dekel's operations in the face of
unprecedented challenges. With the 10,000 tpa cashew processing
operation at Tiebissou due to commence in Q2 2021, we are confident
that by adding a second revenue stream and by diversifying our end
markets, Dekel's
resilience is only going to get stronger.
Ayenouan Palm Oil Project
The table below shows the improved first half performance at
Ayenouan compared to H1 2019. It also shows how over the last six
years, our palm oil operation has consistently generated positive
EBITDA and, during periods when global palm oil prices have traded
in line with historic averages, material net profits after tax. At
EUR602 per tonne, the average CPO price achieved during H1 2020 may
well have been below long term historic levels of EUR700 plus per
tonne, but it was still 19.2% higher than H1 2019's EUR505 average.
This along with a much higher extraction rate compared to the
previous year helped to offset lower volumes of CPO sold during the
period (H1 2020: 23,906 tonnes / H1 2019: 26,702 tonnes). As
mentioned earlier, the H1 2020 financial performance would have
been even stronger had COVID-19 not caused CPO prices to fall back
from US$850 per tonne in January 2020 to lows of US$500 per tonne.
Encouragingly, as global logistics reopened following COVID-19
induced lockdowns, international palm oil prices have recovered to
US$730 per tonne today.
H1 2020 H1 2019 H1 2018 H1 2017 H1 2016 H1 2015
EUR19.6
Revenue EUR15.4m EUR14.6m EUR14.1m m EUR16.0m EUR12.9m
--------- ---------- ---------- -------- --------- ---------
EBITDA EUR1.9m EUR1.4m EUR1.1m EUR3.7m EUR3.1m EUR2.3m
--------- ---------- ---------- -------- --------- ---------
Net profit / (loss)
after tax EUR0.45m (EUR0.1m) (EUR0.5m) EUR2.4m EUR1.8m (EUR93k)
--------- ---------- ---------- -------- --------- ---------
FFB collected (tonnes) 106,188 131,917 96,195 117,706 123,157 90,879
--------- ---------- ---------- -------- --------- ---------
CPO production (tonnes) 23,882 28,934 22,242 26,947 28,550 21,836
--------- ---------- ---------- -------- --------- ---------
Average CPO price
per tonne EUR602 EUR505 EUR549 EUR707 EUR542 EUR617
--------- ---------- ---------- -------- --------- ---------
Setting out key performance indicators covering the last six
half year trading periods for Ayenouan, the table above is by its
nature backward looking. The table does however provide insights
into the future. Keeping in mind that the name plate capacity of
the processing mill is 60,000 tonnes per annum, the CPO price has
been at or below long term averages and that during the above six
half year periods an average of 25,398 tonnes of CPO have been
produced at the mill, there is clear potential to return to at
least the H1 2017 levels in terms of financial results.
For a step-up in CPO production an increase in FFB supplied to
the mill by local smallholders is required. This can be achieved in
two ways, firstly via protecting and potentially increasing
Ayenouan's share of the local market and secondly via an increase
in volumes of fruit harvested in the region. On the first count,
ever since operations commenced at Ayenouan, we have worked hard to
foster close relationships with the local community to secure
supplies - supplying discounted plants from our nursery; setting up
logistics hubs to facilitate delivery of fruit to the mill; rolling
out fertiliser programmes with innovative funding mechanisms to
encourage the use of fertiliser at a manageable cost to the farmer.
Initiatives such as these have seen Ayenouan go from a standing
start in 2014 to becoming a major local producer of CPO. To kick on
from here, a material increase in regional fruit production is
required. 2012 saw the start of a major multi-year planting
programme in the region. It takes on average 6-8 years for plants
to mature, and so we are now entering a period when the benefits of
all this planting ought to bear fruit. With strong relationships
with the local community, critical infrastructure in place and
proven logistics networks established, Ayenouan is in a strong
position to capitalise on any increase in local fruit
production.
To the list can be added the substantial we are carrying out to
secure RSPO certification for Ayenouan including the implementation
of a traceability programme for our farmers. COVID-19 has delayed
the on site RSPO certification pre audit work expected to be
conducted by Proforest, an Oxford-based environmental consultancy.
Internally we believe we are now in a position to meet the RSPO
certification process once field inspections and the pre audit and
audit process can be undertaken. Once certified, Ayenouan will be
one of the few operations in the region with the RSPO stamp of
approval. Set against a backdrop of increasing scrutiny of ESG
obligations, having RSPO certification will differentiate Dekel
from a number of its non-ESG focused peers, thereby potentially
highlighting our project as an attractive destination for fruit
grown by local smallholders who share our principles. We know many
already do, especially after the successful roll out of our fruit
traceability programme across the region which has also helped to
further enhance our relationships with local farmers.
Tiebissou Cashew Project
Increasing CPO volumes produced at Ayenouan is not the only
route to driving material and sustainable profits growth at Dekel
over the short to medium term. Commencing cashew processing
operations at our Tiebissou project (currently Dekel holds a 43.8%
interest) in Q2 2021 will provide a second material revenue stream
for Dekel. With an initial annual capacity to process 10,000 tonnes
of raw cashew nuts, we forecast Tiebissou will generate revenues
similar to those at Ayenouan in the first full year of production.
Crucially, processing cashews is expected to be a higher margin
activity than producing CPO. Therefore, while group revenues have
the potential to double next year, net profits can be expected to
increase by an even larger quantum. We are confident of securing
sufficient quantities of RCN which will in turn enable the plant to
achieve full capacity in a relatively short timeframe. Unlike palm
oil, there is a major shortfall in cashew processing capacity in
Cote d'Ivoire, which is one of the world's largest producers of raw
cashew nuts. For example in 2018 c. 750,000 MT of raw cashew nuts
were produced in Cote d'Ivore but only around 70,000 MT or 9% were
processed in-country. Whilst local processing capacity is
increasing as other groups have identified this opportunity, we
believe that supply of raw cashew nuts will outstrip demand for the
foreseeable future.
Such is the size of the shortfall that the mill at Tiebissou 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, 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. From 15,000tpa and at a cost of EUR5-6 million, the
mill's capacity can be doubled to 30,000 tpa which we estimate
could generate revenues in the region of EUR40 million per annum
based on today's prices. For now, our focus is to bring Tiebissou
online at a rate of 10,000tpa, before looking to increase this to
15,000tpa within 12-24 months and then using cashflows generated to
expand the plant to 30,000tpa. Tiebissou will not only provide a
one-off major boost to revenues and profits by adding another
commodity to the portfolio, it will also provide us with a series
of material step-ups in the Company's financial profile in the
years ahead.
While COVID-19 led to a delay in the commencement of
construction work, first production is on course for Q2 2021. This
will not prevent the project from capitalising on the 2021 peak
cashew season in Côte d'Ivoire which typically runs from February
to May. Unlike palm fruit which perishes within days, raw cashew
nuts can be purchased and stored for months, allowing processing to
take place during the remainder of the year. We will therefore look
to secure supplies during the 2021 peak season for processing
throughout the year. As a result, we expect to see Tiebissou's
transformative effect on the Company's bottom line.
Other projects
With Ayenouan firmly established and Tiebissou set to commence
production in early 2021, low cost work continues to be carried out
to put in place a pipeline of projects in line with our objective
to build Dekel into a major West African focused agro-industrial
business. Proceeding cautiously is the order of the day with
regards to these plans given the current uncertain macro
environment.
In December 2019, we signed a joint venture agreement with
established renewable energy company Green Enesys Holdings to
develop a hybrid power project ('HCTPP') in Côte d'Ivoire and since
then a feasibility study has been initiated on the construction of
a HCTPP comprising a 30MW solar PV plant and a 5-6MW biomass plant
using empty fruit bunches from Dekel's mill at Ayenouan as
feedstock. At the same time, we have been in regular dialogue with
the relevant government ministries regarding the application and
permitting process which has resulted in the initial focus being
directed towards a 5-6MW biomass project at Ayenouan. Current work
on the project is low cost and it is expected this will remain the
case until a sustainable improvement in the macro economic
environment is in evidence.
Also as previously disclosed, we have identified a third
commodity where we believe we can leverage our existing
infrastructure, logistics network and technical expertise to build
a state of the art processing plant just as we have done at
Ayenouan and are doing at Tiebissou. As with the clean energy joint
venture, current work is low cost and will remain so, at least
until Tiebissou is up and running.
Financial
During the six-month period under review, total revenues at
Ayenouan were EUR15.4million, a 5% increase on the EUR14.6 million
reported for H1 2019. A 19% increase in CPO prices achieved and a
higher extraction rate more than offset lower year on year CPO
production at the mill during the period (H1 2020: 23,882 tonnes /
H1 2019: 28,934 tonnes) which in turn drove a 35.7% increase in
EBITDA to EUR1.9 million and a major improvement at the net profit
after tax level which came in at EUR0.4million compared to a
EUR0.1million loss the previous year.
While Ayenouan has always been a low-cost and efficient
operation, further cost savings were secured at both the project
and corporate levels during the period so that general
administration expenses in H1 2020 came in 7% lower than the
previous year.
In June 2020, Bloomfield Investment Corporation, the credit
rating agent for West Africa, renewed the Company's credit rating
as investment grade unchanged: long term BBB- and short term
A3.
Outlook
COVID-19 has caused much disruption to everyday life around the
world and yet, despite this, much progress has been made by the
Company both at our existing palm oil business at Ayenouan, which
has materially improved in terms of financial performance in line
with market expectations, and at our large scale cashew project at
Tiebissou, which is due to commence production in Q2 2021. Bringing
Tiebissou on stream will not just scale up and diversify our
revenues, it will also add to the list of organic growth
opportunities we can pursue within our existing portfolio. As well
as increasing CPO production at Ayenouan towards its 60,000 tpa
capacity as new estates planted across the region in recent years
reach maturity, shareholders can also look forward to a two stage
ramp up in processing capacity at Tiebissou first to 15,000tpa from
10,000tpa at no cost, and then to 30,000tpa.
Dekel has proven processing and logistics expertise and
excellent relationships with the local communities in which we
operate. We believe a highly cash generative platform is being
established with a pipeline of additional projects which the Board
are considering to add to the mix. While we are navigating our way
through a challenging period we are quietly confident that Dekel is
very well placed to deliver significant value for our shareholders
as we head in 2021. As always, I would like to thank the Board,
management, our employees and advisers for their support and hard
work over the course of H1 and I look forward to continuing working
with them closely during what promises to be an exciting period for
Dekel.
Andrew Tillery
Non-Executive Chairman Date: 28 September 2020
CONSOLIDATED STATEMENTS OF FINANCIAL POSITION
30 June 31 December
2020 2019
--------- -----------
Unaudited Audited
--------- -----------
Euros in thousands
----------------------
ASSETS
CURRENT ASSETS:
Cash and cash equivalents 317 273
Trade receivables 519 -
Inventory 952 917
Accounts and other receivables 152 69
--------- -----------
Total current assets 1,940 1,259
--------- -----------
NON-CURRENT ASSETS:
Property and equipment , net 29,697 30,308
Investment in an associate 1,951 1,998
--------- -----------
Total non-current assets 31,648 32,306
--------- -----------
Total assets 33,588 33,565
========= ===========
The accompanying notes are an integral part of the consolidated
financial statements.
CONSOLIDATED STATEMENTS OF FINANCIAL POSITION
30 June 31 December
2020 2019
--------- -----------
Unaudited Audited
--------- -----------
Euros in thousands
----------------------
EQUITY AND LIABILITIES
CURRENT LIABILITIES:
Short-term loans and current maturities of
long-term loans 4,361 3,829
Trade payables 1,187 680
Advance payments from customers - 1,169
Other accounts payable and accrued expenses 1,726 1,016
--------- -----------
Total current liabilities 7,274 6,694
--------- -----------
NON-CURRENT LIABILITIES:
Long-term lease liabilities 78 90
Accrued severance pay, net 60 33
Long-term loans 12,826 13,963
--------- -----------
Total non-current liabilities 12,964 14,086
--------- -----------
Total liabilities 20,538 20,780
--------- -----------
EQUITY
Share capital 141 141
Additional paid-in capital 34,530 34,368
Accumulated deficit (16,099) (16,502)
Capital reserve 2,532 2,532
Capital reserve from transactions with non-controlling
interests (7,754) (7,754)
--------- -----------
Total equity 13,350 12,785
--------- -----------
Total liabilities and equity 33,588 33,565
========= ===========
The accompanying notes are an integral part of the interim
consolidated financial statements.
28 September 2020
-------------------- ------------------ ------------------ ------------------
Date of approval Youval Rasin Yehoshua Shai Kol Lincoln John Moore
of the
financial statements Director and Chief Director and Chief Executive Director
Executive Officer Finance Officer
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
Six months ended Year ended
30 June 31 December
--------------------------
2020 2019 2019
------------ ------------ -------------
Unaudited Unaudited Audited
------------ ------------ -------------
Euros in thousands
(except share and per share amounts)
Revenues 15,423 14,607 20,947
Cost of revenues (12,794) (12,356) 19,252
------------ ------------ -------------
Gross profit 2,629 2,251 1,695
General and administrative 1,413 1,528 3,158
------------ ------------ -------------
Operating profit (loss) 1,216 723 (1,463)
Other income (expense) (7) 33 -
Share of loss of associate (47)
Finance cost (706) (826) 1,829
------------ ------------ -------------
Loss before taxes on income 456 (70) (3,292)
Taxes on income (53) (20) 47
------------ ------------ -------------
Net income (loss) and total comprehensive
income (loss) 403 (90) (3,339)
============ ============ =============
Income (loss) per share
Basic and diluted income (loss)
per share 0.00 (0.00) (0.01)
============ ============ =============
Weighted average number of shares
used in computing basic and diluted
income (loss) per share 423,895,851 353,341,082 379,838,186
============ ============ =============
The accompanying notes are an integral part of the interim
consolidated financial statements.
CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY
Capital
reserve
Additional from transactions
Share paid-in Accumulated Capital with non-controlling
capital capital deficit reserve interests Total
-------- ---------- ----------- -------- --------------------- ------
Euros in thousands
----------------------------------------------------------------------------
Balance as of 1
January 2020
(audited) 141 34,368 (16,502) 2,532 (7,754) 12,785
Net income and total
comprehensive
income 403 403
Issuance of shares - 15 15
Share-based
compensation 147 147
Balance as of 30 June
2020 (unaudited) 141 34,530 (16,099) 2,532 (7,754) 13,350
======== ========== =========== ======== ===================== ======
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 2019
(audited) 99 29,862 (13,163) 2,532 (7,754) 11,576 - 11,576
Net loss and
total
comprehensive
loss - - (90) - - (90) - (90)
Issuance of
shares for
acquisition
of Pearlside 18 1,874 - - - 1,892 - 1,892
Exercise of
options *) - - - - *) - *)
Non-controlling
interests
arising
from initially
consolidated
company - - - - - - 1,432 1,432
Share-based
compensation - 77 - - - 77 - 77
Balance as of 30
June 2019
(unaudited) 117 31,813 (13,194) 2,532 (7,754) 13,514 1,432 14,946
======= ========== =========== ======= =============== ====== =========== ======
CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY
Capital reserve
Additional from transactions
Share paid-in Accumulated with non-controlling
capital capital deficit Capital reserve interests Total
-------- ---------- ----------- --------------- --------------------- -------
Euros in thousands
----------------------------------------------------------------------------------
Balance as of 1
January 2019 99 29,862 (13,163) 2,532 (7,754) 11,576
Net loss and total
comprehensive
loss - - (3,339) - - (3,339)
Issuance of shares 42 4,186 - - - 4,228
Exercise of options *) - - - - *)
Share-based
compensation - 320 - - - 320
-------- ---------- ----------- --------------- --------------------- -------
Balance as of 31
December 2019 141 34,368 (16,502) 2,532 (7,754) 12,785
======== ========== =========== =============== ===================== =======
*) Represents an amount lower than EUR1.
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
-------------------------
2020 2019 2019
------------ ----------- --------------
Unaudited Unaudited Audited
------------ ----------- --------------
Euros in thousands
(except share and per share amounts)
Cash flows from operating activities:
Net income (loss) 403 (90) (3,339)
------------ ----------- --------------
Adjustments to reconcile net income
(loss) to net cash provided by (used
in) operating activities:
Adjustments to the profit or loss
items:
Depreciation 669 655 1,357
Share-based compensation 147 77 320
Accrued interest on long-term loans
and non-current liabilities 618 780 1,306
Change in employee benefit liabilities,
net 27 16 1
Share of loss of associate 47
Changes in asset and liability items:
Decrease (increase) in inventories (35) (687) 626
Decrease (increase) in accounts and
other receivables (602) 326 351
Increase in trade payables 522 863 16
Increase (decrease) in advance payments
from customers (1,169) (301) (1,302)
Increase in Right-of-use lease 30 -
Increase in accrued expenses and
other accounts payable 710 419 420
------------ ----------- --------------
1,278 2,088 3,095
------------ ----------- --------------
Cash paid during the year for:
Interest (729) (511) (1,053)
------------ ----------- --------------
(729) (511) (1,053)
------------ ----------- --------------
Net cash provided by (used in) operating
activities 608 1,577 (1,297)
============ =========== ==============
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
-------------------------
2020 2019 2019
------------ ----------- --------------
Unaudited Unaudited Audited
------------ ----------- --------------
Euros in thousands
(except share and per share amounts)
Cash flows from investing activities:
Cash acquired upon acquisition of
subsidiary 780 -
Investment in Pearlside (144) -
Purchase of property and equipment (58) (235) (435)
------------ ----------- --------------
Net cash provided by (used in) investing
activities (58) 401 (435)
------------ ----------- --------------
Cash flows from financing activities:
Issue of shares (offering net proceeds) - 2,231
Long-term lease, net (12) (5) (4)
Receipt of short-term loans, net 756 209 682
Receipt of long-term loans - 7,200
Repayment of long-term loans (1,250) (1,513) (8,366)
------------ ----------- --------------
Net cash provided by (used in) financing
activities (506) (1,309) 1,743
------------ ----------- --------------
Increase in cash and cash equivalents 44 669 11
Cash and cash equivalents at beginning
of period 273 262 262
------------ ----------- --------------
Cash and cash equivalents at end
of period 317 931 273
============ =========== ==============
Supplemental disclosure of non-cash
activities:
Issuance of shares for services 15 15 -
============ =========== ==============
Issuance of shares in consideration
for investment in Pearlside - 1,892 1,998
============ =========== ==============
The accompanying notes are an integral part of the interim
consolidated financial statements.
NOTE 1:- GENERAL
a. 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.
b. As of 30 June 20 20 , the Company has a deficiency in working
capital of approximately EUR5.3 million. During the first half of
2020, the Company generated positive cash flow from operations of
EUR 608 thousand. This is despite cyclical low crude palm oil
prices during 2019 followed by the COVID-19 pandemic that caused
the CPO prices to decrease again after a short recovery at the
beginning of 2020. During the three months subsequent to 30 June
2020, the CPO price is increasing back to more normal levels.
Therefore, Company management expects that cash flow from
operations for the entire year of 2020 will continue to be
positive. 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 cash flows. See
also Note 1c. below regarding the uncertainty of the impact the
Coronavirus may have on the Group's future revenues, profitability,
liquidity and financial position.
Based on the Company's current resources and its projected cash
flows from its operations, Company management believes that it will
have sufficient funds necessary to finance its operations and meet
its obligations as they come due at least for the next twelve
months from the date of the financial statements.
c. The recent outbreak of Coronavirus, a virus causing
potentially deadly respiratory tract infections originating in
China and spreading in various jurisdictions, may negatively affect
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.
.
NOTE 2:- SIGNIFICANT ACCOUNTING POLICIES
a. Basis of preparation:
The interim condensed financial statements as of 30 June 2020
and for the six months then ended have been prepared in accordance
with IAS 34, "Interim Financial Reporting", as adopted by the
European Union.
The interim condensed financial statements do not include all
the information and disclosures required in the annual financial
statements and should be read in conjunction with the Company's
annual financial statements as of 31 December 2019 and the
accompanying notes.
b. Accounting policies:
The accounting policies adopted in the preparation of the
interim condensed financial statements are consistent with those
followed in the preparation of the Company's annual financial
statements for the year ended 31 December 2019.
c. Fair value of financial instruments:
The carrying amounts of the Company's financial instruments
approximate their fair value.
- - - - - - - - - - - - - - - - - - - - - - - - - - - - - -
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END
IR SEIFIAESSEIU
(END) Dow Jones Newswires
September 29, 2020 02:00 ET (06:00 GMT)
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