Yesterday, DekelOil Public (DekelOil) informed that it has started commercial production and sales of Palm Kernel Oil and Palm Kernel Cake. The production follows pilot testing of the Kernel Crushing Plant (KCP). The company recently reported 29,137 tonnes of crude palm oil (CPO) production at Ayenouan palm oil project in Côte d’Ivoire. DekelOil plans to increase the production at the KCP to its installed capacity of 60t/day in the coming eight weeks.
Beaufort Securities view On Dekel Oil PLC: The aforementioned news is an important milestone in DekelOil’s growth story. As the company commenced production at the Ayenouan palm oil project in line with the schedule, its sales and profit margins are set to expand going forward. DekelOil holds 51% stake in this project, which is having a capacity of 70,000 tons of CPO. Additionally, DekelOil possesses a nursery with a capacity of 1 million seedlings per year. Furthermore, the company delivered solid performance for the latest quarter offsetting the difficult CPO pricing environment. The company’s CPO production in the first nine months of 2015 was more than double of the total production reported in the fiscal year 2014. DekelOil benefitted from an upgrade of logistics ensuring timely supply of feedstock, thereby enhancing overall efficiency. Going forward, the company plans to continue with its planting programme in the Ayenouan region and start operations at the second project based out in Guitry. We believe DekelOil’s earnings growth is likely to accelerate going forward given its substantial resources and prospective plans. Therefore, we maintain a Buy rating on the stock.
Beaufort Securities acts as corporate broker to DekelOil Public plc
