M.P. Evans Posts Record Half-Year Profit on Volume Gains
M.P. Evans Group reported a 21% rise in first-half profits, driven by an 11% increase in crude palm oil production and an 8% reduction in unit costs, rather than significant price appreciation.
M.P. Evans Group (LON: MPE) recorded a record first-half profit of US$61.0m for the six months ending 30 June, a 21% year-on-year increase. The palm oil producer, which operates plantations in Indonesia, achieved this growth primarily through volume expansion and operational efficiency rather than favorable market pricing. Earnings per share rose to 86.5p, reflecting a 25% surge in gross profit to US$78.9m.
Market reaction to the interim results was positive, with shares opening at 1926p and reaching an intraday high of 2040p. By 9:01 am, the stock traded at 1958p, representing a 3.8% premium to Friday’s close of 1886p. The share price movement underscores investor confidence in the company’s ability to deliver margin expansion through internal cost controls despite a flat external price environment.
Production volume drives financial performance
The core driver of the improved bottom line was a significant increase in output. Crude palm oil (CPO) production climbed 11% to 192,300 tonnes, while total crop processed rose 8% to 798,200 tonnes. This volume-led growth strategy allowed the group to capture higher absolute profits even as the average mill-gate CPO price remained largely static, rising only 1% to US$873 per tonne.
Operational discipline further amplified the benefits of increased production. The unit cost of Group palm product fell 8% to US$409 per tonne, a key factor in lifting the gross margin to 40% of revenue, up from 35% in the comparable period last year. This structural improvement in efficiency indicates that the profit growth is rooted in operational capability rather than temporary market spikes.
Dividend hike and cash position strengthen
Management translated the financial performance into shareholder returns by raising the interim dividend by 39% to 25p per share. Payment is scheduled for 6 November to holders registered on 9 October. Concurrently, the group’s cash position improved to US$113.5m from US$91.1m a year earlier, providing a stronger liquidity buffer for ongoing operations and future investments.
Expansion continues in third quarter
Post-period-end activity signals continued growth momentum. The group completed the US$2.0m acquisition of PT Kalimantan Wahaya Berjaya, adding 776 planted hectares near its Kota Bangun estate. Chairman Peter Hadsley-Chaplin noted that strong CPO and palm kernel pricing has persisted into the third quarter, supporting the outlook for sustained earnings growth. The company cited increased extraction rates and harvested crop volumes as key contributors to the encouraging results reported in the interim update from GN stocks/buyback sources.
