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13 Sep 2018 | 09:42

DekelOil halts dividend after slipping to loss on falling palm oil prices

DekelOil suspended dividends on Thursday after swinging to a first-half loss as falling international palm oil prices and lower output weighed.

'In view of the sharp fall in the global price of CPO to a cyclical low of US$550/t and the lack of visibility on the timing of any recovery, the Board has elected to suspend the payment of dividends,' the company said.

For the six months to 30 June, the company reported a loss before tax of €0.504m, compared with a profit of €2.39m a year earlier, while revenue rose 28.1% to €14.1.

The company blamed the poor performance on an 18% decrease in crude palm oil prices and 17% decrease in volumes.

Poor performance was exacerbated by pressures on gross margins, which fell to 14.9% from 25.5% a year, owing to high raw material costs amid intense competition. 'The half year period saw us successfully implement initiatives to utilise spare capacity at our mill at Ayenouan and further reduce our cost base. Despite these initiatives, our first half results reflect the effects of this year's poor harvest and the sharp retrenchment in global palm oil prices,' said DekelOil Executive Director Lincoln Moore. 'Recent history shows that unseasonable harvests in Cote d'Ivoire are typically followed by strong yields the following year. The normalisation of fruit volumes delivered to our mill during Q3 when compared to the equivalent period in 2017 is therefore encouraging and bodes well for the year ahead, although there can be no guarantee that next year's harvest will follow this historical trend. '

At 9:42am: (LON:DKL) DekelOil Public Ltd share price was -0.3p at 3.8p

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