Trading Statement
09/06/2023 07:00
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RNS Number : 1723C M. P. Evans Group PLC 09 June 2023
M.P. EVANS GROUP PLC
("Group" or "M.P. Evans")
ANNUAL GENERAL MEETING
The annual general meeting of M.P. Evans Group PLC, a producer of sustainable
Indonesian palm oil, is being held at 11am in London today. Further details
on the AGM, including a link to the live AGM webcast, can be found on the
Group's website at www.mpevans.co.uk/investors/agm
(http://www.mpevans.co.uk/investors/agm) . The following statement is an
update on trading conditions and progress on the Group's activities since the
publication of the annual report in March.
Crops
The total crop of fresh fruit bunches ("ffb") processed by the Group in the
five months to 31 May 2023 was 584,800 tonnes, 2% higher than the 572,000
tonnes processed in the same period in 2022. In the early part of the year, as
has been the case in previous years, the Group experienced some seasonality in
the crop recorded from its majority-owned areas and its associated scheme
smallholders but compensated for this by purchasing more crop from independent
suppliers to process in its own mills. Crops by source were as follows: from
majority-owned areas 329,000 tonnes (2022 - 342,200 tonnes), associated scheme
smallholders 101,200 tonnes (2022 - 100,900 tonnes) and independent suppliers
154,600 tonnes (2022 - 128,900 tonnes). On most of its estates, the Group has
experienced a relatively lower cropping period in the early part of 2023 but,
based on a review of crop trends and development on its estates, the Group
anticipates higher cropping levels in the coming months.
Production
The Group produced the equivalent of 134,400 tonnes of crude palm oil ("CPO")
during the first five months of 2023, including 128,600 tonnes processed
through its own mills with the balance being the oil content of ffb sold by
the Group to third-party mills. Total production was up by 3%, but the
production from the Group's own mills has increased by 9% from 2022 as the
Group's new mill at Musi Rawas started production in February 2023. The Group
continues to achieve a good oil-extraction rate, particularly in relation to
CPO produced from its own crop. The average extraction rate for the first five
months of the year was 23.0%, marginally lower than the 23.1% achieved in the
same period in 2022 as the Group purchased a higher proportion of crop from
independent suppliers for processing in its mills which is of a lower quality.
Sales and prices
The average price of CPO (cif Rotterdam) for the first five months of the
year was US$1,001 per tonne, 39% lower than the US$1,630 per tonne during
the equivalent period in 2022. Nonetheless, this was 13% higher than the
5-year average price of US$885 per tonne, and 23% higher than the 10-year
average of US$813. Sales prices were exceptionally high during the first half
of 2022 as commodity markets responded to the outbreak of war between Russia
and Ukraine. In the period to the end of May 2023, the Group realised an
average price at mill gate of US$779 per tonne compared with US$1,079 per
tonne in 2022, a decrease of 28%. Prices for palm kernels were also unusually
high in the early part of 2022, averaging US$899 per tonne (mill gate), and
reduced by 61% to US$415 per tonne on average for the first five months of
2023. Given the exceptional price environment in 2022, it is important to see
the current price environment within a longer-term context.
Sustainability
The Group is a long-standing member of the Roundtable on Sustainable Palm Oil
("RSPO"). In 2022, 64% of its total output was certified as sustainable
production, up from the 55% recorded in the previous year. The Group continues
to benefit from its investment in its own milling capacity, and remains
committed to certifying all of its own mills as producers of sustainable palm
oil as quickly as possible after commissioning. The Group opened its sixth
mill in early 2023 and, following the acquisition of additional planted land
expanding its Simpang Kiri estate, will in due course review the potential to
build a further palm-oil mill there.
In its 2022 annual report, the Group gave disclosures in line with the
requirements of the Taskforce on Climate-related Financial Disclosures
("TCFD") and is committed to providing more detailed analysis in a standalone
sustainability report due for publication later in 2023.
Strategy
The Group has four key strategic pillars: it is a responsible producer of
sustainable Indonesian palm oil, striving for excellence in all its
operations, with a focus on continuing growth and offering an increasing
yield.
Acting responsibly is at the heart of everything the Group does. The Group
does not deforest and acts as a good steward of the land it cultivates. It
invests for the long term, in its employees, their training and in the
facilities it provides for them. This approach fosters a culture of
excellence, enabling the consistent delivery of both high crop yield and good
extraction rates. In turn, the long-term investment, the age profile of the
Group's planted areas and the yields achieved support continuing growth, and
the opportunity to increase shareholder returns.
An increased total dividend of 42.5p per share has been proposed in respect of
2022, and it remains the board's intention to continue the Group's long-term
trend of at least maintaining, or increasing, dividends for shareholders.
9 June 2023
Enquiries:
M.P. Evans Group PLC Telephone: 01892 516333
Peter Hadsley-Chaplin - chairman
Matthew Coulson - chief executive
Luke Shaw - chief financial officer
Peel Hunt LLP (Nomad and joint broker) Telephone: 020 7418 8900
Adrian Trimmings, Andrew Clark, Lalit Bose
finnCap (Joint broker) Telephone: 020 7220 0500
Tim Redfern, Harriet Ward
Hudson Sandler (Financial PR) Telephone: 020 7796 4133
Charlie Jack, Amelia Craddock, Francis Kerrigan
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