Dekel Agri Vision : 2023 Final Results and Financing Update

DEKEL AGRI-VISION PLC.

THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION AS STIPULATED UNDER THE UK VERSION OF THE MARKET ABUSE REGULATION NO 596/2014 WHICH IS PART OF ENGLISH LAW BY VIRTUE OF THE EUROPEAN (WITHDRAWAL) ACT 2018, AS AMENDED. ON PUBLICATION OF THIS ANNOUNCEMENT VIA A REGULATORY INFORMATION SERVICE, THIS INFORMATION IS CONSIDERED TO BE IN THE PUBLIC DOMAIN.

Dekel Agri-Vision Plc / Index: AIM / Epic: DKL / Sector: Food Producers

28 June 2024

Dekel Agri-Vision Plc ('Dekel' or the 'Company')

2023 Final Results and Financing Update

Dekel Agri-Vision Plc (AIM: DKL), the West African agribusiness company focused on building a portfolio of sustainable and diversified projects, is pleased to announce its audited results for the year ended 31 December 2023 (the 'Accounts'). The Accounts will be made available to download later today from the Company's website or mailed to individual shareholders who have elected to receive a physical copy. www.dekelagrivision.com.

Financial Highlights

Palm Oil Operation

• 22% increase in revenues to €37.1m (2022: €30.5m) driven by a 49.5% increase in Crude Palm Oil ('CPO') sales volumes more than offsetting a 15.2% decrease in CPO prices - includes sale of CPO, Palm Kernel Oil ('PKO'), Palm Kernel Cake ('PKC') and Nursery Plants.
• Gross margin decreased 19.5% primarily due to lower CPO prices and extraction rates.
• 4.2% increase in EBITDA to €4.8m (2022: €4.6m) due to prudent cost control during an inflationary environment.

Cashew Operation

• 57.1% increase in revenues to €1.1m (2022: €0.7m). The increase in revenue was below expectations due to previously reported challengers in the peeling and shelling sections which are in the process of being rectified.
• EBITDA loss of €2.2m compared to an EBITDA loss of €1.9m.

Year ended 31 December	2023	2022	% change
Palm Oil Operation	€37.2m	€30.5m	22.0%
Revenue
Gross Margin	€5.7m	€5.8m	-1.7%
Gross Margin %	15.3%	19.0%	-19.5%
EBITDA	€4.8m	€4.6m	4.2%
Cashew Operation	€1.1m	€0.7m	57.1%
Revenue
EBITDA	(€2.2m)	(€1.9m)	-15.8%
Group EBITDA	€2.6m	€2.7m	-3.7%

The summary of the Group Financial Performance for FY2023 is laid out further below.

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DEKEL AGRI-VISION PLC.

Financing Update

• The Company has entered the following refinancing arrangements to ensure the Group is well funded during the expected period of ramp up of the Cashew Operations and to ensure the group has committed facilities to cover loans maturing over the next 12 months:
• AgDevco Refinance

1. Deferment of AgDevCo first principal repayment due on 9th August 2024 of €900,000 to be paid

over 6 months from 9th September 2025.

• 1. Interest rate to increase from 7.00% to 9.00% per annum in respect of the outstanding balance from 9th August 2024.
• Loan from Youval Rasin, CEO
• 1. c.€2.3m loan with interest of 10% per annum

1. Principal and interest repayable in 2 years.

Related Party Transaction

The loan from Youval Rasin constitutes a related party transaction under AIM Rule 13 of the AIM Rules for Companies. All of the Directors of the Company with the exception of Youval Rasin are regarded as independent for this transaction. The independent Directors, having consulted with the Company's Nominated Adviser, considers the terms of the Loan to be fair and reasonable in so far as its shareholders are concerned.

Operational Highlights - Palm Oil Operation

• Fresh Fruit Bunch ('FFB') volumes and Crude Palm Oil ('CPO') production increased 56.1% and 51.7% respectively compared to FY 2022.
  o The strong 2023 production performance of the Palm Oil operation was driven by ten consecutive months of higher like-for-like production from March 2023 onwards.
• CPO sales quantities increased 49.5% in FY 2023 compared to last year, which was consistent with the higher CPO production. In addition, PKO production increased 32.7% in FY 2023 compared to last year.
• The FY 2023 average CPO sales price achieved was historically strong at €869 per tonne, albeit 15.2% below the record H1 2022 CPO sales prices.
• The CPO extraction rate for FY 2023 of 21.4% was slightly lower than FY 2022 of 22.1% but remained well in line with expectations.

Operational Highlights - Cashew Operation Update

• Whilst it was pleasing to commence commercial production, the anticipated ramp up of daily production rates during FY-2023 was hampered by ongoing technical issues primarily in the shelling and peeling sections due to underperforming shelling and peeling machinery provided by our supplier.
• New equipment has been ordered and is expected to arrive shortly at which point we expect to a significant improvement in production volumes in H2 2024.
• The successful completion of the BRC Global Food standard assessment which took place in Q2 2023 and other key KPIs including raw material prices, extraction rates meeting expectations was a positive.

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DEKEL AGRI-VISION PLC.

Lincoln Moore, Dekel's Executive Director, said: "The Palm Oil Operation continues to be a very solid performer delivering €4.8m EBITDA for the Group. The real catalyst for the next phase of growth relates to the Cashew Operation. We are working to implement the new equipment as soon as possible over the coming months at which point, we expect it will become a positive contributor to Group performance and ultimately we believe will drive a material improvement in share price performance".

This announcement contains inside information for the purposes of Article 7 of the UK version of Regulation (EU) No 596/2014 which is part of

UK law by virtue of the European Union (Withdrawal) Act 2018, as amended ("MAR"). Upon the publication of this announcement via a

Regulatory Information Service, this inside information is now considered to be in the public domain.

** ENDS **

For further information please visit the Company's website www.dekelagrivision.com or contact:

Dekel Agri-Vision Plc	[phone]
Youval Rasin
Shai Kol
Lincoln Moore	[phone]
WH Ireland Ltd (Nomad and Joint Broker)
James Joyce
Darshan Patel
Optiva Securities Limited (Joint Broker)
Isaac Hooper	[phone]
Christian Dennis
Daniel Ingram

Notes:

Dekel Agri-Vision Plc is a multi-project,multi-commodity agriculture company focused on West Africa. It has a portfolio of projects in Côte d'Ivoire at various stages of development: a fully operational palm oil project in Ayenouan where fruit produced by local smallholders is processed at the Company's 60,000tpa capacity crude palm oil mill and a cashew processing project in Tiebissou, which is currently transitioning to full commercial production.

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DEKEL AGRI-VISION PLC.

CHAIRMAN'S STATEMENT

Palm Oil Operation

2023 saw a significant rebound in CPO production increasing 51.7% in FY 2023 compared to FY 2022. The improvement in production volumes is largely due to a much stronger FFB harvesting season compared to 2022 and a period of smooth operating performance from our logistics and milling teams who have been able to take full advantage of improved market volumes. CPO sales volumes in FY 2023 also increased 49.5% compared to FY 2022.

CPO sales prices traded well above historically averages, albeit 15.2% lower than the record levels achieved in 2022. Local CPO prices continue to trade approximately €100 per tonne below international prices as in country efforts to minimise food inflation continued throughout 2023. We are seeing local prices slowly and gradually increase towards the international CPO price which remains historically high and supportive of our Palm Oil Operation.

The combined balance of strong CPO production and relatively high CPO prices resulted in the Palm Oil Operation delivering EBITDA of €4.8m in FY 2023, a 4.2% increase compared to FY 2022.

Cashew Operation

The Cashew Operation commenced commercial production in early FY 2023. However, the anticipated ramp up of daily production rates during FY 2023 was hampered by ongoing technical issues primarily in the shelling and peeling sections due to underperforming machinery provided by our supplier.

During Q4 2023, an independent expert was appointed to assess the equipment performance and full production chain. This expert recommended replacing of parts of the shelling and peeling sections which required an investment of c.€250,000 from existing cash resources. All new shelling and peeling equipment was ordered in January 2024, with latest shipping time tables showing deliveries are expected shortly. With optimal performance of the shelling and peeling stations working in tandem with the other 10 well performing stations, we expect to see a material improvement in cashew production volumes and quality during H2 2024.

The Cashew Operation ramp up remains the key catalyst to drive both our short and medium term growth plans and remains the main drag on our share price performance. We are buoyed by the fact one of the other local Cashew Operations in our regions experienced almost identical issues with their equipment from the same supplier and their recent shift over to alternate shelling and peeling equipment, with the over sight of the same expert consultant we engaged, has resulted in a drastic improvement in operational and financial performance. We are therefore doing everything we can to deliver the same outcome as quickly as possible.

Other Projects

Whilst we have further expansion plans, including the processing of a third commodity in addition to clean energy aspirations, these projects are on hold as we focus on enhancing the production volumes of the Cashew Operation.

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DEKEL AGRI-VISION PLC.

Group Financial Performance

A summary of the Group financial performance for FY2023, in addition to the comparatives for the previous 5 years, is outlined in the table below.

FFB collected (tonnes)	FY2023	FY2022	FY2021	FY 2020	FY 2019	FY 2018
182,362	116,733	190,020	154,151	176,019	146,036
CPO production (tonnes)	39,073	25,751	39,953	34,002	37,649	33,077
CPO sales (tonnes)	38,896	26,016	39,092	34,008	37,713	32,692
Average CPO price per tonne	€869	€1,025	€868	€602	€491	€542
Total Revenue (all products)	€38.3m	€31.2m	€37.4m	€22.5m	€20.9m	€20.9m
Gross Margin	€2.1m	€5.1m	€6.5m	€2.3m	€1.7m	€1.7m
Gross Margin %	5.5%	16.7%	17.4%	10.2%	8.1%	8.3%
Overheads	€3.6m	€3.9m	€3.8m	€2.8m	€3.2m	€3.2m
EBITDA	€2.6m	€2.7m	€4.8m	€1.2m	€0.2m	(€0.2m)
EBITDA %	6.8%	9.3%	12.8%	5.3%	1.0%	-
Net Profit / (Loss) After Tax	(€4.5m)	(€1.3m)	€0.6m	(€2.2m)	(€3.3m)	(€3.3m)
Net Profit / (Loss) After Tax %	-	-	1.6%	-	-	-
Total Assets	€50.6.m	€54.7m	€51.7m	€43.3m	€33.6m	€33.4m
Total Liabilities	€39.6m	€39.4m	€35.5m	€30.8m	€20.8m	€21.8m
Total Equity	€11.0m	€15.3m	€16.3m	€12.5m	€12.8m	€11.6m

Dekel reported FY 2023 EBITDA of €2.6m compared to €2.7m FR 2023 EBITDA. The €0.1m decrease in EBITDA was driven by:

• A €0.2m increase in the Palm Oil Operation EBITDA was largely due to the increase in CPO sales volumes and well maintained overhead expense more than offsetting lower CPO prices and CPO extraction rates.
• A €0.3m increase in the Cashew Operation EBITDA loss due to operating inefficiencies resulting ongoing technical issues with the peeling and shelling section provided by our original supplier.

Dekel reported a FY 2023 Net Loss after Tax of €4.5m compared to a Net Loss after Tax of €1.3m. This increase in loss of €2.5m was primarily driven by:

• The first full year inclusion of FY 2023 of depreciation from the Cashew Operation increasing Group depreciation by €2.5m.

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DEKEL AGRI-VISION PLC.

• An increase in Cashew Operations interest expense of €0.5m in FY 2023 which was previously capitalised in FY 2022 prior to the commencement of commercial production.

Outlook

Looking ahead, the Palm Oil Operation continues to be a very solid performer for the Group. The real catalyst for enhanced financial results relates to the rectification of the performance issues of the Cashew Operation. We are working to implement new equipment as soon a possible over the coming months to ensure it becomes a positive contributor to Group performance and ultimately drives a rebound in share price performance.

I extend my gratitude to the Board, Management, employees, and advisors for their support and hard work throughout the year.

Andrew Tillery	Date: 28 June 2024
Non-Executive Chairman

CONSOLIDATED STATEMENTS OF FINANCIAL POSITION

		31 December
		2023	2022
ASSETS	Note	Euros in thousands
CURRENT ASSETS:
Cash and cash equivalents		209	2,240
Trade receivables		1,571	1,568
Inventory	4	3,037	3,158
Bank deposits - restricted	10	673	679
Other accounts receivable	5	1,017	950
Total current assets		6,507	8,595
NON-CURRENT ASSETS:
Bank deposits - restricted	10	1,025	850
Property and equipment, net	7	43,084	45,235
Total non-current assets		44,109	46,085
Total assets		50,616	54,680

The accompanying notes are an integral part of the consolidated financial statements.

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DEKEL AGRI-VISION PLC.

CONSOLIDATED STATEMENTS OF FINANCIAL POSITION

		31 December
		2023	2022
LIABILITIES AND EQUITY	Note	Euros in thousands
CURRENT LIABILITIES:
Short-term loans and current maturities of long-term
loans	10b	8,470	5,671
Trade payables		2,795	1,359
Advances from customers		499	346
Other accounts payable	8	3,451	3,852
Total current liabilities		15,215	11,228
NON-CURRENT LIABILITIES:
Long-term lease liabilities	9	128	128
Accrued severance pay, net		72	127
Loan from shareholder	6	679	630
Long-term loans	10	23,572	27,241
Total non-current liabilities		24,451	28,126
Total liabilities		39,666	39,354
EQUITY:	11
Share capital		178	177
Additional paid-in capital		40,817	40,736
Accumulated deficit		(23,262)	(18,804)
Capital reserve		2,532	2,532
Capital reserve from transactions with non-
controlling interests		(9,315)	(9,315)
Total equity		10,950	15,326
Total liabilities and equity		50,616	54,680

The accompanying notes are an integral part of the consolidated financial statements.

28 June, 2024
Date of approval of	Youval Rasin	Yehoshua Shai Kol	Lincoln John Moore
the
financial statements	Director and Chief	Director and Chief	Executive Director
	Executive Officer	Finance Officer

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DEKEL AGRI-VISION PLC.

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

		Year ended
		31 December
		2023	2022
		Euros in thousands
	Note	(except per share amounts)
Revenues	12	38,299	31,205
Cost of revenues	15a	36,239	26,185
Gross profit		2,060	5,020
General and administrative expenses	15b	3,562	3,845
Operating profit		(1,502)	1,175
Other income		-	103
Finance cost	15c	(2,881)	(2,475)
Income (loss) before taxes on income		(4,383)	(1,197)
Taxes on income	14	(75)	141
Net income (loss) and total comprehensive income
(loss)		(4,458)	(1,338)
Attributable to:
Equity holders of the Company		(4,458)	(833)
Non-controlling interests		-	(505)
Net income (loss) and total comprehensive income
(loss)		(4,458)	(1,338)
Net earnings (loss) per share attributable to equity
holders of the Company:
Basic and diluted net earnings (loss) per share	16	(0.01)	0.00

The accompanying notes are an integral part of the consolidated financial statements.

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DEKEL AGRI-VISION PLC.

CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY

			Attributableto equity holders of the Company
						Capital reserve
						from
			Additional			transactions with		Non-
	Share		paid-in	Aaccumulated	Capital	non-controlling		controlling	Total
	capital		capital	deficit	reserve	interests	Total	interests	equity
Balance as of 1 January 2022	170		39,985	(17,971)	2,532	(8,710)	16,006	329	16,335
Net loss and total comprehensive loss	-		-	(833)	-	-	(833)	(505)	(1,338)
Issue of shares for services provided (Note 11)	-		44	-		-	44	-	44
Issue of shares upon acquisition of non-controlling interests
(Note 6)	7		707	-	-	(605)	109	176	285
Balance as of 31 December 2022	177		40,736	(18,804)	2,532	(9,315)	15,326	-	15,326
Net loss and total comprehensive loss		-	-	(4,458)	-	-	(4,458)	-	(4,458)
Issue of shares for services provided (Note 11)	1		81	-	-		82	-	82
Balance as of 31 December 2023	178		40,817	(23,262)	2,532	(9,315)	10,950	-	10,950

The accompanying notes are an integral part of the consolidated financial statements.

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DEKEL AGRI-VISION PLC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

Year ended

31 December

	2023	2022
Cash flows from operating activities:	Euros in thousands
Net income (loss)	(4,458)	(1,338)
Adjustments to reconcile net income (loss) to net cash provided
by (used in) operating activities:
Adjustments to the profit or loss items:
Depreciation	4,103	1,554
Share based compensation	55	-
Accrued interest on long-term loans and non-current liabilities	3,470	1,421
Change in employee benefit liabilities, net	(55)	(8)
Gain from sale of property and equipment	-	(103)
Changes in asset and liability items:
Decrease in inventories	121	82
Increase in other accounts receivable	(33)	(531)
Increase in trade payables	1,436	28
Increase (decrease) in advances from customers	153	238
Increase (decrease) in other accounts payable	(374)	1,206
Cash paid during the year for:	8,876	3,887
Income taxes	(37)	(135)
Interest	(2,424)	(1,848)
	(2,461)	(1,983)
Net cash provided by (used in) operating activities	1,957	566

The accompanying notes are an integral part of the consolidated financial statements.

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