Africa-focussed DekelOil Public Limited (LON:DKL) told investors it has seen a 22.1% increase in product sales, with the palm oil producer bringing in €18.8mln in the first six months of 2017.
In a production update, coming ahead of interim results, the company said that the increase in sales income was primarily due to better global crude palm oil prices as well as its own improved storage capacity which in turn helped improve local pricing terms.
READ: DekelOil battles through head-winds to post higher sales and profits
Production operations set new records, in terms of volume, during the first quarter though the second quarter was impacted by a curtailment caused by mechanical problems in May and June which have since been rectified.
It means that production for the first half of 2017 was marginally lower than the previous year, totalling 26,947 tonnes versus 28,550 tonnes.
Dekeloil, meanwhile, anticipates the stronger sales performance to result in materially higher earnings (EBITDA) compared to the same period of 2016, in which it had €3.1mln of earnings.
Lincoln Moore, Dekeloil executive director, in a statement, said: “We believe we are on course to report another set of record half yearly revenues, EBITDA, and net profit after tax.
“The now resolved mechanical issues which prevented the Mill from being fully operational during Q2 and resulted in marginally lower year on year CPO production in H1 were frustrating, but we are encouraged by the response from the team on the ground who have efficiently restored the mill to full operation.
“As well as stronger international prices, the excellent financial performance is due to the commissioning of an additional storage tank which assisted in maximising pricing during the period.”
He added: “With last year's first half EBITDA of €3.1 million set to be exceeded, Ayenouan has proved itself to be a highly cash generative platform upon which we will build a leading West African focused palm oil company.”
Moore also highlighted that Dekeloil is moving forward with its plans to develop a second project in Côte d'Ivoire, at the Guitry site, and discussions are ongoing for the potential acquisition of Norpalm (a producing operation in Ghana).