The total crop processed by palm oil producer MP Evans (MPE) surged by over a fifth in 2019, reaching more than 1m tonnes. With the extraction rate improving by 0.2 percentage points to 23.7 per cent, crude palm oil (CPO) production jumped 20 per cent to 231,900 tonnes.
But the CPO price remained depressed for much of the year, on average 5 per cent lower than 2018 at $566 (£458) a tonne. MP Evans’ cost per tonne also increased by $25 to $345 as it invested in newly maturing areas where initial crop yields are lower. These effects pushed gross profit down more than a third to $17m, while the margin dropped over 10 percentage points to 14.3 per cent.
The CPO price climbed towards the end of 2019, reaching $860 a tonne, as global production fell and stocks unwound. But then Covid-19 hit China – one of the largest palm oil importers – sending prices tumbling.
House broker Peel Hunt has reduced its forecasts to reflect lower palm oil prices. It now expects adjusted pre-tax profit of $24.4m and EPS of 29¢ in 2020, rising to $35.8m and 43.8¢ in 2021.
| MP EVANS (MPE) | ||||
| ORD PRICE: | 508p | MARKET VALUE: | £277m | |
| TOUCH: | 507-509p | 12-MONTH HIGH: | 756p | LOW: 370p |
| DIVIDEND YIELD: | 2.8% | PE RATIO: | 54 | |
| NET ASSET VALUE: | 657¢ | NET DEBT: | 19% | |
| Year to 31 Dec | Turnover ($m) | Pre-tax profit ($m) | Earnings per share (¢) | Dividend per share (¢) |
| 2015 | 72.5 | 6.80 | 11.7 | 8.75 |
| 2016 | 83.9 | 19.2 | 22.3 | 15.00 |
| 2017 | 117 | 35.1 | 41.8 | 17.75 |
| 2018 | 109 | 18.3 | 9.90 | 17.75 |
| 2019 | 119 | 12.8 | 11.6 | 17.75 |
| % change | +9 | -30 | +17 | |
| Ex-div: | 23 Apr | |||
| Payment: | 19 Jun | |||
| £1=$1.23 | ||||
