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M.P. Evans Group PLC has reported an 8% increase in the total crop of fresh fruit bunches (FFB) processed in the first five months of 2024. The Group processed 631,400 tonnes of FFB up to May 31, 2024, compared to 584,400 tonnes during the same period in 2023. The early part of the year saw rapid growth, which has slightly slowed in recent months. Despite this, the management is pleased with the year-to-date growth across all sources of crop.
Crop Sources and Production
The breakdown of the crop sources is as follows:
- Majority-owned areas: 360,700 tonnes (up from 329,000 tonnes in 2023)
- Associated scheme smallholders: 107,300 tonnes (up from 101,200 tonnes in 2023)
- Independent suppliers: 163,400 tonnes (up from 154,600 tonnes in 2023)
The crop increases have been bolstered by areas acquired in 2023. While yields from these newly acquired estates remain relatively low, significant progress is being made to enhance agronomic standards, which is promising for future crop growth.
The Group produced 147,500 tonnes of crude palm oil (CPO) in the first five months of 2024, a 10% increase from the 134,400 tonnes produced during the same period in 2023. Operating six palm-oil mills throughout this period, 96% of the CPO was produced in-house, with the remainder from external mills. The Group’s engineering team has maintained robust extraction rates, achieving an average oil-extraction rate of 23.4%, up from 23.0% in 2023.
Sales and Pricing
The average price of CPO (cif Rotterdam) for the first five months of 2024 was US$997 per tonne, closely matching the US$1,001 per tonne during the same period in 2023. The Group realized an average mill gate price of US$770 per tonne, a slight decrease from US$779 per tonne in 2023. Prices for palm kernels have shown improvement, with the year-to-date price at US$425 per tonne by the end of May, surpassing the previous year’s average of US$415 per tonne.
Strategic Acquisition
M.P. Evans Group recently acquired a 5% minority holding in most of its Indonesian subsidiary trading companies for a total cost of US$14.0 million, based on an agreed price of US$9,000 per planted hectare. This acquisition increases the Group’s effective ownership of high-quality plantation land by over 1,700 hectares. This strategic move is aligned with the Group’s growth strategy and is expected to be immediately earnings enhancing for shareholders.
Outlook
The Group’s recent performance and strategic acquisitions underline its commitment to growth and operational excellence. The improvements in agronomic standards and the robust production figures reflect M.P. Evans Group's dedication to maximizing yield and profitability. As the company continues to enhance its operations and expand its footprint, stakeholders can anticipate sustained growth and value creation.
