M.P. Evans Group PLC (MPE) Earnings Call Transcript & Summary

We've announced our results for the 6 months ended the 30th of June 2026 today, and they show a very strong first half for M.P. Evans Group. Revenue increased by 9% to $196.3 million, while gross profit rose by 24% to $78.9 million. Profit for shareholders increased by 25% to $61 million, a record first half result, and earnings per share rose by 21% to 86.5p. Gross margin also improved from 35% to 40%, reflecting the quality and efficiency of our operations.

What's particularly encouraging is that this performance was not simply the result of favorable palm oil prices. Pricing for crude palm oil and palm kernels remained strong, but we also harvested more crop, improved the mix going through our mills, increased extraction rates, and reduced unit costs. The crop harvested from areas managed by us increased by 14% to 705,400 tonnes. At the same time, purchases from independent suppliers fell by 22% and made up only 12% of the total crop processed. That meant more of the crop going through our mills came from the high-quality areas we manage, supporting both production and margins. Total crop processed increased by 8%, but crude palm oil production rose by 11% to 192,300 tonnes. All 6 group mills improved their extraction rates, taking the average from 23.5% to 24.2%. That improvement was worth approximately $4.7 million in additional revenue. The cost of production from our own areas also fell by 8% to $409 per tonne.

We continued to make good progress on sustainability with certified sustainable crude palm oil production increasing by 16% to 151,800 tonnes. Responsible production remains central to how we operate and to the long term value we create for the communities around our estates. There is also plenty of growth still come at the end of June more than 7,000 planted hectares under our management had yet to reach maturity providing a visible source of future crop. Since the period end, we have also added further planted and plantable land close to Kota Bangun with the potential to add at least another 3,000 planted hectares over time.

Our financial position remains very strong. We ended June with net cash of $113.5 million, up 61% from the same point last year. That gives us the flexibility to continue investing in growth while maintaining our progressive approach to shareholder returns. The Board is proposing an interim dividend of 25p per share, an increase of 39%. That increase partly reflects a review of the balance between the interim and final payments and should not be taken as a guide to the increase for the year as a whole. Since the end of June, the positive momentum has continued. In the 8 months to the 31st of August, the crop harvested from areas managed by us was 965,100 tonnes, up 16% on the same period last year. We have also continued to sell our output at healthy prices.

Our estates are performing well, including a clear recovery at Simpang Kiri following last year's flooding. We're also monitoring the drier conditions associated with El Nino. Any effect on crop is more likely to be felt in 2027 than in this year, while the spread of our estates across Sumatra and Kalimantan provides some resilience. Taken together, we have a high-quality asset base, increasingly efficient operations, and a strong balance sheet with clear opportunities for further growth. The Board remains confident in the group's prospects. Finally, none of this would be possible without the hard work of all of our people. I'd like to thank everyone at our estates and mills in Indonesia and in our Jakarta and U.K. offices for their contribution during the first half of the year.