gretel
04 Aug 2017
SCSW magazine/Beaufort Securities The next issue of SCSW magazine is out tomorrow - hopefully there'll be a follow-up mention of DKL given three separate pieces of positive news flow in the last month.Beaufort have summarised as follows this morning and retain their 23p target price:"Our View: Current year momentum is being maintained. Thanks to the growing profitability at vertically integrated Ayenouan, the Board has already announced the adoption of a progressive dividend policy and a maiden final payout of 0.17 pence per ordinary share for the year ending 31 December 201. As was also detailed in the Group’s recent half yearly production update, management expects to report a 22.1% increase in product sales, including CPO, Palm Kernel Oil ('PKO') and Palm Kernel Cake ('PKC'), to €18.8 million (H1 2016: €15.4 million) for the first half.This was primarily due to stronger CPO pricing resulting from higher global prices and increased CPO storage capacity at the Project, which enables an improvement in local pricing terms. As a result, H1 2017 EBITDA is expected to be materially higher than H1 2016's EBITDA of €3.1m. 2017 has also seen DekelOil become a multi-project palm oil company following the formal commencement of operations at Guitry, its second project in Cote d'Ivoire. As with Ayenouan, DekelOil is looking to develop Guitry into a vertically integrated palm oil operation including nursery, company-owned estates and a mill producing CPO from fresh fruit bunches grown by both the Company and local smallholders. In addition, the Group also announced that it had entered into discussions to acquire Norpalm Ghana Limited ('NGL'), a subsidiary of Norpalm AS, a Norwegian company which owns a palm oil production company in Western Ghana. NGL is a vertically integrated palm oil owner and operator with approximately 4,000 hectares of mature palm plantations under ownership and a 30 tn/hr mill which processes fresh fruit bunches from its own-operated estates as well as those produced by local smallholders. In addition to the revenues it generates from selling approximately 15,000 tonnes of CPO into the domestic Ghanaian market, NGL also operates a palm kernel oil press which produces approximately 2,000 tn of PKO. There can be no guarantee that these discussions will result in DekelOil acquiring NGL, but they nevertheless demonstrate management’s confidence in its ability to replicate the success already registered. Having proven both its business model and ability to implement it, shareholders should anticipate further progress as DekelOil seeks to transform itself into a leading west African palm oil producer. Indeed, in projecting DekelOil producing as much as £2.7m free cashflow during 2017E, followed by around £6m the year after, Beaufort also expects shareholders to be provided with dividend yields of 1.7% and 2.0% for the two periods. Beaufort considers yesterday’s statement perfectly demonstrates management willingness to move its ambitious planning forward without exposing shareholders to a raised risk profile. With the shares trading on forward earnings multiples of 7.3x and 5.7x respectively, Beaufort retains its Buy recommendation on DekelOil, repeating its price target of 23p/share."
gretel
03 Aug 2017
Very positive AGM statement today Note in particular against the £35m m/cap:"As a result of the record first half sales performance, H1 2017 EBITDA is expected to be materially higher than H1 2016's EBITDA of €3.1m."[link]
gretel
26 Jul 2017
Beaufor : Buy with 23p target Beaufort Securities retain their Buy and 23p target today on a P/E of 7.3 falling to just 5.7...."Our View: Offering shareholders an opportunity to capitalise on its valuable and proven management experience! DekelOil’s stated strategy is now to transform itself into a leading West African-focused palm producer. Replicating that already gained from turning Ayenouan into a highly cash generative operation, DekelOil sees the opportunity to move forward its 100%-owned Guitry project as compelling. Indeed, Guitry prospectively has the potential to become a much larger and more profitable operation than Ayenouan. Having proven its first vertically integrated model, the Board is determined to move the concept forward by building a portfolio of other vertically integrated palm oil projects in West Africa. Having established how to de-risk a successful operation, which then plays an important role in the local economy, the business model can attract interest and support potential partners, financing vehicles and banks with regards to providing development capital for Guitry. While it is likely to fund an initial portion of future development from internal cash flow, the majority will likely be obtained by introducing a project partner, in a similar manner to that seen with Ayenouan. While these discussions have commenced with no partner yet selected, this strategy will provide comfort to shareholders who, while applauding the Board’s expansion strategy, do not wish to see the Company’s recently declared progressive dividend strategy impacted. Indeed, in projecting DekelOil producing as much as £2.7m free cashflow during 2017E, followed by around £6m the year after, DekelOil is seen providing shareholders with dividend yields of 1.7% and 2.0% for the two periods, while also rapidly reducing balance sheet debt. Beaufort considers yesterday’s news ideally demonstrates management willingness to move its ambitious planning forward without exposing shareholders to a raised risk profile. With the shares trading on forward earnings multiples of 7.3x and 5.7x respectively, Beaufort retains its Buy recommendation on DekelOil, repeating its price target of 23p/share."
gretel
25 Jul 2017
RNS : Guitry production to begin Excellent news today - Guitry is going ahead and will provide a second production operation.I do like DKL's risk-averse approach in bringing in partners, limiting their own initial funding exposure, getting long tax exemptions etc.And there's this comment: "We believe Guitry in time has the potential to become a much larger and more profitable operation than our successful project in Ayenouan".....[link]
gretel
19 Jul 2017
Beaufort retain their Buy and 23p target price - 100% upside from the current price.Given a current year P/E of just 6.8 falling to 5.2, plus lots of potentially big news flow from the likes of Guitry and Norpalm, it's extremely tempting to top up here:"DekelOil Public Limited (DKL.L, 11.38p) – BuyThe operator and 100% owner of the profitable and vertically integrated Ayenouan palm oil project in Côte d'Ivoire yesterday provided a production update for the half year ended 30 June 2017. Management confirmed a 22.1% increase in product sales (including CPO, Palm Kernel Oil and Palm Kernel Cake to €18.8 million (H1 2016: €15.4 million) is expected to be reported in the half year to 30 June 2017, primarily due to stronger CPO pricing resulting from higher global prices and increased CPO storage capacity at the Project (from 5,000 to 8,000 tonnes) which enabled the Group to improve local pricing terms. Record like-for-like CPO production was recorded in Q1 2017, which was followed by curtailed production at the Mill in Q2 due to now rectified mechanical issues during May and June. H1 production of CPO was therefore marginally lower at 26,947 tonnes (H1 2016: 28,550 tonnes).Our View: Further excellent progress! Management has confirmed its expectation for another set of record half yearly figures, in terms of revenue, EBITDA, and net profit after tax. The mechanical issues which prevented the Mill from being fully operational during Q2 and resulted in marginally lower year on year CPO production in H1 was frustrating, but the plant has since been restored to full operational capacity. As well as stronger international prices, DekelOil’s strong financial performance is also due to the commissioning of an additional storage tank which assisted in maximising pricing during the period. This means that last year's first half EBITDA of €3.1 million is set to be exceeded and that Ayenouan is proving to be a highly cash generative platform upon which a leading West African focused palm oil company is now being built. This experience, also provides the Board with confidence to move forward with plans to develop a second project in Côte d'Ivoire at Guitry, with discussions continuing regarding the proposed acquisition of Norpalm, a producing palm oil project in Ghana. Norpalm owns some 4,000 hectares of mature palm plantations and operates a 30 tn/hr mill which also purchases FFB from local producers. As such, it sells 15,000 tonnes of crude palm oil into the domestic Ghanaian market, and also operates a PKO press which produces c.2,000 tn of PKO in the Ghanaian market. Given that the discussions are still ongoing, there can be no guarantee that it will proceed. The Board intend, however, that it would be financed through a combination of DekelOil’s existing cash resources, new equity partners at project level and debt financing. The potential acquisition, if it were to proceed, is not expected to constitute a Reverse Takeover, and so publication of a prospectus should not be required. The Group will make further announcements in due course. In the meantime, based on Beaufort’s forecasts of DekelOil producing 2017E and 2018E operating profits of €6.9m and €8.3m respectively, leading to attributable profits of €5.3m and €7.0m, the shares trade on Price/Earnings multiples of just 6.8x and 5.2x. This remains much too cheap, particularly give shareholders can expect to collect dividend yields of 1.8% and 2.0% for the two years. Beaufort retains its Buy recommendation on DekelOil Public Limited with a price target of 23p/share."
gretel
18 Jul 2017
Solid production update today DKL will likely have made say a €3.5m EBITDA in H1 alone, against a £34m m/cap - and this despite the disappointing Q2 production issues which have now been resolved ready for H2 and which may well be compensated for.Which sounds good and cheap to me.
hotel230
06 Jul 2017
Sorry Kevyd33 alway better to write with your glasses on Ya!
hotel230
06 Jul 2017
Total agree with Keiyd33 Yes, like the way the management have put this company together.Built their own processing plant, when they were paying to have their kernels processed, while at the same time adding to their land bank and also seen to be doing the right thing keeping the locals happy.If the buy comes off it should put it in the 20's and the following years growth should have it heading for 30's.
kevyd33
05 Jul 2017
Re: Email from DKL Thanks for your efforts and sharing Hotel230. Share price drift always causes me some concern too and I'm sure, like me, many will have been caught out with seeming to be the last to spot bad news coming!DKL will be viewed by the market with caution till the T/O is confirmed and implications are worked out. Until then I view the weakness as an opportunity to increase my potential ROI and although there are never gaurantees see this a "strong and stable" investment going forward.Good luck.KD££
hotel230
05 Jul 2017
Email from DKL The email was sent by:Lincoln John Moore, Executive Director.Mr. Moore has been actively involved in establishing and raising finance for oil palm projects in Liberia, Sierra Leone and Côte d’Ivoire. Mr Moore was the former Chief Financial Officer of Sierra Leone Agriculture Ltd (now owned and operated by Biopalm Ltd) until September 2011 and a co-founder and former director of Ragnar Capital Ltd, where he played a key role in raising over $US50m for oil palm projects in West Africa. This included the Biopalm Ltd investment into DekelOil of €8.3 million. Mr Moore is a Chartered Accountant and former senior manager in the restructuring division of Deloitte and Touche.
hotel230
05 Jul 2017
Email from DKL I realise things are a little tricky with regard to what a member of staff can say. This is what I asked:"It’s been some time since we heard that the board was in discussions with both the board of Norpalm AS and certain Norpalm AS shareholders in relation to the potential acquisition of all or the majority of the shares in Norpalm by Dekel Oil. Is it possible to make a statement weather or not the talks are on going or have terminated".This was the answer to my email."Hi Tony. Nice to hear from you. We will certainly update when there is something to say to the market. But if talks had been terminated we would have of course announced it. Best Lincoln"
gretel
29 Jun 2017
Beaufort reiterate Buy and 23p target today::[link] Public Limited (DKL.L, 11.75p) – BuyThe operator and 100% owner of the vertically integrated Ayenouan palm oil project in Côte d’Ivoire yesterday announced a maiden final dividend of 0.17 pence per ordinary share for the year ended 31 December 2016. This is in line with the Company’s proposed dividend of £500,000 announced on 17 January 2017. A scrip alternative is being offered with this dividend to those investors who wish to receive additional DekelOil securities in lieu of a cash payment. electing for the scrip dividend alternative, shareholders can increase their shareholding in the Company, in most cases without incurring stamp duty or dealing expenses. The scrip dividend elections will need to be received as instructed by 4 August 2017 from those investors who wish to receive shares in lieu of cash; the calculation period for this exercise will be between 13th and 19th July and certificates will be posted on 1st September, with payment date itself on 4th September. The Board also announced the date of its AGM as 3rd August. Our View: No surprises, but shareholders will be pleased to receive their first, of what should now become a progressive regular dividend payment. This one alone provides shareholders with a 1.45% yield. Full year results published on 6th June confirmed excellent progress, albeit knocked by an aberration just as the period came to a close. Revenues were a little ahead of expectations, but gross margins had been impacted by reduced availability of fresh fruit bunches during November and December. EBITDA accordingly came out at €4.1m compared with expectations of €4.8m. The new year, however, has started well with availability returning to normal and suggesting the Q4’2016 hit was a simple one-off. Meanwhile, positive steps are being taken with development of the Group’s own plantations which, together with World Bank assistance, should improve feedstock visibility going forward. Indeed, Beaufort considers DekelOil’s current share price still fails to recognise prospective upside from the ramping up its CPO production from now wholly-owned Ayenouan, where c.30% of the mill’s operational capacity is yet utilised (maximum capacity 70,000 tonnes per annum). Moreover, the management is far from standing still, having confirmed on 10 May 2017 that it is in discussion with Norpalm Ghana Limited (subsidiary of Norpalm AS) and certain Norpalm AS shareholders in relation to the potential acquisition of all or the majority of the shares in Norpalm by DekelOil to build out its operations in neighbouring Ghana. Norpalm is an owner and operator of c.4,000 hectares of mature palm plantations and operates a 30 tn/hr mill which also purchases FFB from local producers. Norpalm sells 15,000 tonnes of crude palm oil sold into the domestic Ghanaian market, and also operates a PKO press which produces c.2,000 tn of PKO in the Ghanaian market. Such discussions are still ongoing and therefore there can be no guarantee that it will proceed. The Board intend, however, that it would be financed through a combination of DekelOil’s existing cash resources, new equity partners at project level and debt financing. The potential acquisition, if it were to proceed, would not constitute a Reverse Takeover, and so publication of a prospectus is not required. The Group will make further announcements in due course.Even if Beaufort now takes the prudent step, based on recent commodity trading, of factoring slightly lower CPO price projections into its forecast model, this has not changed its price target for the shares.Currently valued at FY2017E and FY2018E P/E multiples of just 7.8x and 5.8x, along with dividend yields of 1.5% and 1.7% respectively, Beaufort retains its Buy rating on the Shares with target price of 23p."
gretel
07 Jun 2017
Excellent outlook going forward I'm happy to hold for much more upside.I think headline results were indeed down on expectations. But the outlook for this year is excellent, as already evidenced by the Q1 trading update. The maiden dividend is also evidence of confidence going forward. There's news flow to come on Guitry and hopefully the Ghana acquisition, and expansion in Ivory Coast continues apace.Optiva have raised their target price to 34p (from 32p). Cantor say Buy and have reduced their target price to 25p - this is still more than 100% up on the current share price.The company seems to be well run, is well financed and is expanding sensibly. Except for exceptional circumstances like weather, politics etc I can see DKL continuing to thrive and eventually being acquired.Here's an article from Proactive FYI summarising the results:"What the house brokers says about DekelOilJoint house broker Optiva Securities said that growing production and profitability in 2016 in a low pricing environment demonstrated “real management credibility”.The broker raised its target price for DekelOil from 32p to 34p; the shares currently trade at 12.8p, up 18% year-to-date but down 0.95p today.“The introduction of the 60t/day kernel crushing plant … has added significant value to revenue streams and has delivered a payback period of less than 12 months. We also take comfort that the World Bank has commenced an initiative which subsidises the cost to buy DKL’s products to boost further palm oil plantations in the region, thereby enhancing DKL’s underlying revenues,” the broker said.Optiva is expecting significant growth momentum in 2017, forecasting 45,590 tonnes of CPO production, with the kernel crushing plant contributing a further 7,500 tonnes of palm kernel oil and palm kernel cake.It has pencilled in a CPO price of €690 per tonne of CPO and €850 per tonne of palm kernel oil.These assumption lead to a forecast of substantially increased revenues of €31mln and more than doubled EBITDA of €10.6mln.DekelOil’s nominated adviser Cantor Fitzgerald said the results showed the significant progress made in moving the mill towards full production while expanding its capabilities.DekelOil said the mill is currently working at about 70% of its capacity.“This year has also seen a significant financial simplification of the business leaving shareholders more clearly exposed to the growth potential of the company in our view. The margin impact of lower volumes in Q4 now looks like a genuine aberration and we remain confident in the underlying picture going forward,” Cantor said, as it reiterated its ‘buy’ recommendation and cut its target price to 25p from 29p.“We have adjusted our figures for a lower CPO price but with a stronger balance sheet position our valuation is only modestly affected,” the broker said, explaining the cut in target price."
malkis
06 Jun 2017
Good RNS..... DKL PROGRESSING WELL................................ . HAVE takien advantage of a lower sp (strange about the drop ??)and have added to my holding here. Warm regards Malkis
hotel230
05 Jun 2017
Holding back with the results Could be something to do with Norpalm
