Dekel Agri-Vision plc, a West African agricultural company, is making significant progress, particularly in its palm oil operations. The company’s recent update for July reflects its continued success in this sector, setting a promising tone for the remainder of 2024.
The palm oil segment is a central pillar of Dekel’s business, with a notable 7% year-on-year increase in crude palm oil (CPO) sales for July, meeting market expectations. Analysts from Zeus Capital, Nick Spoliar and Charlie Cullen, emphasised that July’s production was well-aligned with their forecasts, highlighting the steady advancements Dekel is achieving in this area.
A key highlight from the July report is the impressive improvement in the extraction rate, which rose by 7.43% year-on-year. This improvement is not just a technical milestone but also enhances profitability by boosting gross margins. With international CPO prices on the rise and local prices approaching those levels, Dekel’s palm oil business is well-positioned for strong financial performance throughout 2024.
Dekel’s contribution to the global food chain is increasingly important. Although it holds less than a 10% share of the local market, its sustainably sourced palm oil serves both as food and a fuel substitute. This dual purpose underscores the strategic value of Dekel’s products in a world that is increasingly focused on sustainability and resource efficiency. Looking forward, the prospects for Dekel’s palm oil operations are bright, with analysts noting strong growth potential amidst local and international supply shortages.
While palm oil remains a consistent performer, Dekel’s expansion into cashew processing represents a major growth opportunity. Although the company faced some delays earlier this year, the recent acquisition of remedial machinery is expected to significantly enhance cashew processing, transitioning the business from losses to profitability by 2025. According to Zeus Capital, as the cashew operations gain momentum, they are poised to transform the scale of Dekel’s business, with revenues projected to reach €45 million by 2026, marking a substantial increase from previous levels. This sector offers immense growth potential, and Dekel’s strategic investments could play a pivotal role in reshaping the company’s future.
Dekel Agri-Vision is on a strong trajectory, driven by its solid palm oil operations and the promising developments in its cashew business. As the company continues to implement its strategic plans, it is set to enhance profitability and play an increasingly important role in global food security and sustainable energy. With a solid foundation and exciting prospects, Dekel is a company worth watching as it continues to grow and thrive in the dynamic agricultural industry.
Dekel Agri-Vision PLC (LON:DKL) aspires to become a leading agro-industrial company in West Africa, one that creates value for shareholders whilst at all times placing the interests of the local communities and environment in which it operates in at the heart of its operations.
