12th Apr 2016 09:32
LONDON (Alliance News) - MP Evans Group PLC, the London-listed producer of Indonesian palm oil and Australian beef cattle, on Tuesday said the 10% drop in its annual profit was "pleasing" given the drop in average palm oil prices during the year.
With a strategy of looking to expand its oil palm areas in Indonesia, and to "capitalise on the value" of its Australian and Malaysian operations, using any sale proceeds to fund the continuing Indonesian palm oil development, MP Evans sold Woodlands, the Australian cattle-fattening property, to China's Fucheng Group for AUD28 million in November 2015.
Profit, including both continuing operations and discontinued operations after tax, fell by 10% to USD25.4 million in 2015, MP Evans said in a statement. The company's maintained its total dividend for the year at 8.75 pence per share.
Plantation profits fell by just more than half to USD15.1 million, with palm oil prices averaging USD622 per tonne in 2015, down 24% from USD821 a year earlier. The company cited the "decline" in the biodiesel market for the fall in average palm oil prices.
MP Evans said a 10% increase in its Indonesian crops of oil palm fresh fruit bunches to 423,900 tonnes helped to mitigate the effect of lower palm oil prices. Those prices have strengthened to about USD730 per tonne since the end of 2015, the company said.
Pressure from palm oil was partly offset by "substantially higher" profit from MP Evans' Australian operations, including both Woodlands and the company's associate, The North Australian Pastoral Company Pty Ltd.
The cattle market strengthened in 2015, MP Evans said, citing Asian demand for beef, the weakening of the Australian dollar, and supply pressures from a reduction in cattle herds both domestically and in the US.
"It is pleasing that, in a year of significantly lower palm oil prices, the profit for the year fell only by 10% following much-improved profits at Woodlands and NAPCo, resulting from the surge in beef-cattle prices," Peter Hadsley-Chaplin, executive chairman, said in a statement.
"The strong cattle market provided the opportunity for the group, in line with its strategy, successfully to sell Woodlands towards the end of 2015. In early 2016, the palm oil market has staged a welcome recovery from the low levels of 2015 and Australian beef-cattle prices, whilst softening a little, remain at historically-strong levels," Hadsley-Chaplin said.
In Malaysia, MP Evans' share of profit at Bertam Properties Sdn Berhad fell "a little, notwithstanding that property development and sales continued at a healthy level," the chairman said.
Shares in MP Evans were up 4.9% at 435.00 pence on Tuesday morning.
By Samuel Agini; [email protected]; @samuelagini
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