Beaufort Securities view on DekelOil : DekelOil’s upgradation of the logistics system has given a major boost to the company’s overall efficiency in receiving the feedstock for processing. The company utilized the crucial harvesting season (March to June) to their advantage and surpassed its own estimates and production levels of 2014. Moreover, the installation of 60 tonne per hour Mil with a total capacity of 70,000 tonnes per annum underpins the progress made already while the scaling-up process continues. In addition, a Kernel Crushing Plant (KCP) at Ayenouan remains under construction and is expected to be operational in Q4 2015, thereby leading to an overall positive impact on the sale of sell Palm Kernel Oil and animal feed to the local market. Further, West Africa seems to be a promising destination for palm oil developers and continues to attract those who are seeking future expansion. Going ahead, we expect a sharp rise in the company’s profitability due to combined production from the existing plants and the new KCP. In view of the above argument, we reiterate Speculative Buy on the stock.
DekelOil released the statement of its CEO, Mr Youval Rasin at the company’s Annual General Meeting held yesterday. According to the statement, the company continues to make good progress at its oil extraction Mill that commenced operations in February 2014. Production for the first six months of 2015 stood at 21,836 tonnes of Crude Palm Oil (CPO), up 53% on the total production figure for the first nine months of operation. Moreover, the company has several initiatives planned to increase the profitability of Ayenouan in 2016. Nearly 1,900 hectares of fresh fruit bunches (FFB) have been planted to date to augment the existing smallholder feedstock. The company also intends to add a kernel crushing plant to sell Palm Kernel Oil and animal feed to the local market at the factory gate when it becomes operational in Q4 2015. DekelOil also plans to focus on the development of the 24,000 hectares located at our second project area at Guitry.
Beaufort Securities acts as corporate broker to DekelOil Public Limited plc
