M.P. Evans seeing bumper palm-oil crop

The palm oil and beef producer M.P. Evans has seen profits hit by a reduction in beef prices but the palm oil operation is seeing productivity surge.

Evans's livestock division is based in Australia and has been hit a by a fall in prices for beef since the highs of late 2011.

The herd at the fattening site in South Queensland known as the Woodlands has been kept at 10,000 and the animals showed weight gains during the first half. But the fall in prices saw the unit lose US$0.57m in the six months to the end of June.

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The group also owns a share in the huge North Australian Pastoral Company which runs a herd of around 200,000 cattle in the Northern Territory and Queensland. That share produced a post tax loss of US$1.24m in the first half against a $2.88m profit in the prior year.

The story at Evans's palm oil sites in Indonesia is quite different, with production of oil-palm "fresh fruit bunches" expected to hit 300,000 at the group's majority owned sites by year's end. Current numbers show the crop is 22% better than the same period of last year.

Prices for palm oil have declined 8% compared to the first half of 2011, to $1,096 per tonne which has led to a 31% decline in profits before tax to $15.33m. But the market likes the increased production profile, with the stock up 1% since the half year report was released on Friday morning.

Commenting on the results, the chairman of M. P. Evans, Peter Hadsley-Chaplin, said: "Overall, the Group has performed well in the first half of 2012 and it is particularly pleasing to note the increase in palm-oil profits from the majority-held operations...Projected growth in the Group's crops to 300,000 tonnes in 2012 is expected to continue to around 500,000 tonnes in 2015. Although the beef-cattle operations suffered a loss in the first half, the prospects for Australian beef remain favourable."

BS