MP Evans Reports Strong Palm Oil Pricing Amid Lower Production Volumes
MP Evans Group PLC reported that stronger palm oil prices, with average crude palm oil prices rising 5% to US$866 per tonne, offset a 3% decline in production volumes to 360,800 tonnes. The company’s strategy to reduce third-party fresh fruit bunches contributed to the production drop, but improvements in milling capacity and a forecast EBIT margin of 37% supported a positive outlook. Analysts remain cautiously optimistic about future palm oil prices due to ongoing biofuel demand and planting limits.
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MP Evans Group PLC reported a year where stronger palm oil prices mitigated lower production volumes. Average crude palm oil (CPO) mill-gate prices were US$866 per tonne, up 5% year-on-year. Palm kernel prices increased by 42% to US$748 per tonne.
CPO production declined by 3% to 360,800 tonnes, partly due to a strategy to reduce third-party fresh fruit bunches (FFB), which fell by 41%. Analysts noted that lower production was offset by higher prices, leaving earnings forecasts largely unchanged.
The company's milling capacity improvements allowed it to process most of its own crop, with an EBIT margin forecast rising to 37%. Free cash flow was estimated at US$118.4 million, supporting dividends and debt repayment, resulting in a net cash position. Looking ahead, analysts remain cautiously optimistic, citing ongoing biofuel demand and planting limits as positive factors for palm oil prices.
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