Lower prices for crude palm oil (CPO) and kernels contributed to the $0.52m (£0.42m) after-tax loss generated by palm oil producer MP Evans (MPE) during the first half. Chief executive Tristan Price said the price decline – of a fifth over the period – a “hangover from 2018” when there was record stock across the industry of both CPO and other vegetable oils.
However, demand for palm oil is improving, driven in part by increasing imports from India and China, which has started to clear out stock levels and could result in maintained higher prices. Post-period-end there has already been a $70 per tonne increase in the CPO price.
The amount of both CPO and kernels produced rose 3 per cent to 95,000 tonnes and 21,800 tonnes, respectively, and there was also a slight improvement in the oil extraction rate at 23.6 per cent. MP Evans is on track with its goal to have all its production certified as sustainable by 2024, compared with 69 per cent at present. What's more, an increase in cost per tonne of product was a result of management bringing some production costs forward to the first half, which should normalise by the year-end.
Analysts at Peel Hunt forecast adjusted pre-tax profits of $13.4m for 2019, giving EPS of 17.7¢, increasing to $37.1m and 46.6¢ in 2020.
| MP EVANS (MPE) | ||||
| ORD PRICE: | 642p | MARKET VALUE: | £351m | |
| TOUCH: | 642-666p | 12-MONTH HIGH: | 782p | LOW: 616p |
| DIVIDEND YIELD: | 2.8% | PE RATIO: | na | |
| NET ASSET VALUE: | 673p | NET DEBT: | 8% | |
| Half-year to 30 Jun | Turnover ($m) | Pre-tax profit ($m) | Earnings per share (¢) | Dividend per share (p) |
| 2018 | 53.8 | 10.1 | 9.1 | 5.0 |
| 2019 | 46.2 | -0.56 | -1.6 | 5.0 |
| % change | -14 | - | - | - |
| Ex-div: | 17 Oct | |||
| Payment: | 01 Nov | |||
| £1=$1.24 | ||||
