MP Evans beefs up profits

MP Evans, the producer of Indonesian palm oil and Australian beef cattle, brought new plantations on stream just in time last year to take advantage of historically high palm oil prices.

Profit before tax in 2011 rose 62% to $39.7m from $24.45m in 2010. Earnings per share increased to 66.39 cents from 41.17 cents the year before.

Strong palm oil prices and increasing crops of oil palm fresh fruit bunches (FFBs) on both the new projects and the established estates were the prime reason for the improved results, the group said.

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The palm oil price averaged $1,123 per tonne on a cost, insurance and freight basis, up from $905 per tonne in 2010, but prices were on a downward trend for most of 2011; they have since reversed course in 2012, with the prevailing price currently in the region of $1,175 per tonne.

Crops of oil palm FFBs rose 27% to 249,300 tonnes from 2010's levels. The group said it remains on track for FFB production of 300,000 tonnes in 2012 and 500,000 tonnes in 2015.

On the cattle side, "a significant improvement in profits was achieved by the Australian associated company, NAPCo, after a good season," revealed Peter Hadsley-Chaplin, Chairman of MP Evans.

"Cattle prices have eased from the higher levels seen in 2011, but nonetheless remain at historically-firm levels. Growing demand in Asia and the continuing decline of the US cattle herd would indicate that the medium-to-long-term outlook for Australian beef-cattle markets remains positive," Hadsley-Chaplin opined.

The final dividend has been raised to 5.75p from 5.50p, taking the full year pay-out to 8p, versus 2010's full year divi of 7.5p.

JH