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Profits at palm oil producer MP Evans have soared as the price of the edible vegetable oil hit record highs as a result of the Ukraine war.
The group, which produces sustainable palm oil in Indonesia, reported “an excellent set of results” in the first half to 30 June 2022 thanks to the high prices.
Crude palm oil prices reached historic highs in the first half of 2022, peaking at almost $2,000 per tonne in early March in response to global concerns surrounding vegetable oil supplies.
The average price during the half stood at $1,622, while MP Evans achieved an average mill-gate price for its crude palm oil of $1,035 per tonne, 43% higher than achieved a year ealier and 28% higher than all the previous year.
The rise was partly offset by a temporary export ban during part of April and May as the Indonesian government responded to the high-price environment by increasing taxes on palm oil.
MP Evans’ production costs also increased during the half as a result of inflationary pressures, with the cost per tonne of palm product produced rising to $425, $90 higher than the $335 per tonne in the first half of 2021.
However, the group still achieved a record gross profit of $64.8m, an increase of more than 50% on the first half in 2021.
Operating profits at the producer rose 49% year on year to $61.7m.
Executive chairman Peter Hadsley-Chaplin said: “The group has delivered an excellent set of results for the first half of 2022, supported by the high CPO price environment, but once again demonstrating the benefits of the group’s commitment to long-term responsible management and development of its estates.”
MP Evans also proposed a 25% increase in the interim dividend to 12.5p per share.
The stock rose 2.2% to 830p as markets opened this morning.
Morning update
The FTSE 100 started the week by rising 0.7% to 7,400.49pts.
Early fmcg risers included Science in Sport, bouncing back 7.1% to 30p, Glanbia, up 5.4% to €12.37, and Just Eat Takeaway, up 1% to 1,393p.
Fallers so far included HelloFresh, down 5% to €25, Bakkavor, down 3.3% to 95.6p, and AG Barr, down 2.2% to 499.6p.
Yesterday in the City
The markets are looking much busier this week as the summer holiday recedes into the rearview mirror.
The latest Kantar grocery market share data gets things rolling tomorrow, while Fever-Tree reports first-half results and Ocado issues a Q3 trading update.
Wednesday sees the latest UK inflation rate released by the ONS.
Thursday looks busy with interims from John Lewis and Waitrose. Retail analyst Nick Bubb warns that the first-half loss could “easily be as much as £90m pre-exceptionals” and like-for-like sales could be more than 5% lower.
Embattled ecommerce group THG also reports first-half results on Thursday, as does meat and fish producer Hilton Food Group.
The latest decision by the Bank of England’s Monetary Policy Committee, which was due on Thursday, has been postponed for a week.
Friday brings the monthly retail sales figures for August from the ONS.
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