MP Evans posts strong growth in crops, production

19th Jan 2024 10:50

(Sharecast News) - Indonesian palm oil producer MP Evans Group reported growth in its crop and production figures for 2023 on Friday, with a 2% rise in its own crops of fresh fruit bunches to 922,900 tonnes.

The AIM-traded firm said scheme-smallholder crops also saw a positive trend, with a 5% rise to 278,500 tonnes.

Additionally, the company's independent crops purchased increased significantly, up by 24% to 421,500 tonnes, making for overall growth of 7% in total fresh fruit bunches for the year, to 1,622,900 tonnes.

On the production front, MP Evans reported an 11% increase in crude palm oil to 378,500 tonnes, and a 9% rise in palm kernel production, totaling 80,600 tonnes.

The steady growth was put down to a commitment to operational excellence and investments in milling capacity, which saw a 20% increase in planted hectarage during the year.

Despite a slight decrease in the average mill-gate price for crude palm oil, which slid 15% over the year to $729 per tonne from $854 in 2022, the company noted that it was still receiving prices of over $700 per tonne.

MP Evans said it was focussed on sustainability, with six palm-oil mills and 95% of the total reported crop being processed in a group mill.

The company also expected certification for its newest mill at Musi Rawas following the completion of its sustainability audit.

MP Evans also described a strong financial performance for 2023, generating substantial operating cash inflows.

The company paid dividends of more than $28m during the year, in addition to using around $10m for its share buyback programme, enhancing earnings per share.

Furthermore, MP Evans invested in its long-term growth by acquiring over 10,000 planted hectares, including those managed for associated scheme smallholders, to expand its plantation portfolio.

With a history spanning over 30 years of maintaining or increasing annual dividends, the board said it was committed to that policy.

"The group made another stride forward in 2023, with crop and production both increasing," said chairman Peter Hadsley-Chaplin.

"Importantly, following a period of significant investment, almost all crops are now processed in group milling facilities."

Hadsley-Chaplin said the firm was starting to see the benefits in increasing extraction rates, which would provide further support to what would be a strong result for 2023.

"Looking to the future, the group has delivered on its stated aim of adding further hectarage close to its existing projects, which will support further growth into 2024 and beyond."

At 1018 GMT, shares in MP Evans Group were up 2.47% at 748p.

Reporting by Josh White for Sharecast.com.