5th Apr 2016 08:21
LONDON (Alliance News) - DekelOil Public Ltd Tuesday said production of crude palm oil rose steadily throughout the first quarter of 2016, and that it made a strong start in producing two additional products that started late last year.
The company, which operates in West Africa as a vertically integrated producer of crude palm oil, palm kernel oil and palm kernel cake, said production steadily rose each month in the first quarter of 2016 as it continues to benefit from ongoing improvements to its logistics network with local farmers.
DekelOil produced 15,141 tonnes of crude palm oil in the quarter, a 57% like-for-like rise from the same period a year ago.
Production rose steadily throughout the quarter, from 3,073 tonnes in January to 5,733 tonnes in February and then to a new record of 6,335 tonnes in March. Production was also up in every month when compared to the previous year.
That production in the first quarter was derived from the 65,610 tonnes of fresh fruit bunches that were delivered to its processing mill, considerably higher than the 40,488 tonnes delivered a year earlier.
Although DekelOil has its own fresh fruit bunches coming from its plantations, it also takes fresh fruit bunches from local farmers, with the amount being delivered to its mill rising as the company strengthens its regional position and builds its relationships with local communities.
"By accommodating the requirements of local smallholders and by making our mill easy to access via the development of logistics hubs, we have ensured that DekelOil's regional reputation is that of a highly professional and reliable operator, and this is paying dividends as more farmers bring their fresh fruit bunches to us, establishing the company as a credible player in the market place," said Executive Director Lincoln Moore.
The company said it sold 12,082 tonnes of crude palm oil in the quarter at an average price of EUR532 per tonne.
"Crude palm oil prices have increased considerably during the quarter with early sales in April taking place at a price approximately 10% higher than the average for the first quarter of 2016," said the company. "Gross margins, particularly in February and March have increased considerably compared to 2015."
Crude palm oil is DekelOil's bread and butter, but the company commissioned a kernel crushing plant back in November 2015 to facilitate the production of palm kernel oil and palm kernel cake, providing it with an additional revenue stream.
DekelOil produced 983 tonnes of palm kernel oil and 1,355 tonnes of palm kernel cake in the first quarter of 2016, which was the first full quarter of production from the new crushing plant.
Of that production, 851 tonnes of palm kernel oil was sold at an average price of EUR753 per tonne, whilst 1,014 tonnes of palm kernel cake was sold at an average price of EUR43 per tonne.
"Having recently re-financed our debt on more attractive terms, and with production going from strength to strength, DekelOil has never been in a better position, both operationally and financially," said Moore.
"We believe there remain significant opportunities for growth in 2016 and beyond from the continued increase in our production, together with a continual improvement of our processes and efficiencies for dealing with the substantial increase in fresh fruit bunches volumes, particularly in an environment with rising prices for crude palm oil," he added.
DekelOil shares were trading up 3.6% to 1.45 pence per share on Tuesday morning.
By Joshua Warner; [email protected]; @JoshAlliance
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