Palm oil producer DekelOil Public Limited (LON:DKL) refinanced its project development loan to have lower interest costs, which will improve its profitability, it said.

The owner of the Ayenouan palm oil project in Côte d'Ivoire said a new €8.4 million unsecured loan with interest at 6.85% has been sealed with a syndicate of leading regional financial institutions.

It replaces a €7.6 million loan at 10.5%, which had been secured with West African Development Bank, which had a remaining term of 3.5 years.

DekelOil's executive director Lincoln Moore said: "Today's new loan will directly improve our profitability and will free up additional cash flows.."

"All our original development loans have now been replaced with debt facilities secured with leading regional institutions with significantly reduced interest payments and longer repayment profiles."

House broker Cantor noted: "Following the completion of construction of DekelOil’s Ayenouan mill and the subsequent ramp up in profitability, the company has now completed a series of refinancings that we estimate will reduce its average cost of debt from 10.3% to 7.2%.

"This secures the company financially as the mill moves to full production and leaves room for expansion."

The broker is upgrading forecasts for full year 2017 due to the reduced interest costs and its target price rises to 28p from 24p. It repeated a 'buy' recommendation.