TIDMMPE
RNS Number : 9146L
M. P. Evans Group PLC
11 September 2023
M.P. EVANS GROUP PLC
M.P. Evans Group PLC ("M.P. Evans" or "the Group"), a producer
of sustainable Indonesian palm oil, announces its unaudited interim
results for the six months ended 30 June 2023.
highlights
-- 2% increase in total crop processed to 721,100 tonnes (2022 -
705,700 tonnes)
-- 3% increase in total production of crude palm oil to 166,200
tonnes (2022 - 160,800 tonnes)
-- 27% decrease in mill-gate CPO price to US$755 per tonne (2022
US$1,035 per tonne)
-- 7% increase in certified sustainable production to 96,500
tonnes (2022 90,500 tonnes)
-- 26% increase in cost of Group palm product to US$535 per
tonne (2022 US$425 per tonne)
-- 62% decrease in operating profit to US$23.4 million (2022
US$61.7 million)
-- 61% decrease in earnings per share to 24.8p (2022 -
63.3p)
-- Maintained interim dividend per share at 12.5p (2022 -
12.5p)
-- Maintained net cash position - 2023 net cash US$2.5 million
(2022 - US$13.5 million)
POST PERIOD- HIGHLIGHTS
-- Increase in cropping levels, with total crop processed
318,800 tonnes in two months to August 2023
-- Agreement signed to acquire 8,350 planted hectares in East
Kalimantan, benefiting existing milling operations.
M.P. Evans chairman, Peter Hadsley-Chaplin, commented : "The
Group continues to increase output, notably from its own production
facilities, following the commissioning of the Musi Rawas mill this
February. We are delighted to be reporting further strategic
increases in planted hectarage, both at Simpang Kiri earlier this
year, and the recently announced agreement to acquire over 8,000
planted hectares in East Kalimantan. These developments, along with
increasing cropping levels, put the Group in a strong position to
deliver a productive and profitable 2023 and bodes well for its
longer-term prosperity."
11 September 2023
Enquiries:
M.P. Evans Group PLC Telephone: 01892 516333
Peter Hadsley-Chaplin - Executive
chairman
Matthew Coulson - Chief executive
Luke Shaw - Chief financial officer
Peel Hunt LLP (Nomad and joint Telephone: 020 7418 8900
broker)
Adrian Trimmings, Andrew Clark,
Lalit Bose
finnCap (Joint broker) Telephone: 020 7220 0500
Tim Redfern, Harriet Ward
Hudson Sandler (Communications Telephone: 020 7796 4133
consultants)
Charlie Jack, Charlotte Cobb, Francis
Kerrigan
An analysts' meeting will be held today at 9:30am at the offices
of Hudson Sandler, 25 Charterhouse Square, London EC1M 6AE.
Overview
The Group has continued to deploy its strategy in the first half
of 2023 as a producer of certified sustainable palm oil. In
February of this year, the Group opened its sixth palm-oil mill, at
its Musi Rawas estate in South Sumatra and, as a result, across all
operations, the Group is now processing 96% of the crop harvested
from the areas it manages. In addition, the Group continues to
plant at Musi Rawas and, at the end of June 2023, reached its
target of a total planted area there of 10,000 hectares. As a
result, at the end of June 2023, the Group managed a total planted
area of 56,800 hectares. The Group remains focused on growth and,
in March 2023, acquired over 2,000 additional planted hectares
close to its Simpang Kiri estate in Aceh Province, northern
Sumatra. Very pleasingly, since the end of the period, it has
reached an agreement to acquire over 8,000 further planted hectares
in East Kalimantan.
During the early part of the year, as was the case for many
Indonesian producers, the Group experienced a relatively
low-cropping period in several of its estates, and this had an
impact on the crop harvested from both the Group's majority-owned
areas, as well as that from its associated scheme smallholders. As
the year has progressed, crops have improved, markedly so towards
the end of the first half and moving into the beginning of the
second half of 2023. The Group has continued to work hard to secure
additional crop from independent suppliers to be processed in its
mills, particularly as Group milling capacity has continued to
increase this year. Total Group production of crude palm oil
("CPO") increased in the first half of the year by 3% to 166,200
tonnes. Encouragingly, production from the Group's own mills rose
by 13% to 159,100 tonnes following the commissioning of the Musi
Rawas mill during the period.
By historic standards, CPO pricing remained robust in the first
half of 2023, with an average cif Rotterdam price in the period of
US$986 per tonne. This is 8% higher than the 5-year average of
US$917 and 20% higher than the 10-year average of US$820. However,
prices were exceptionally high in the first half of 2022, in
response to the war in Ukraine and consequential concerns over
vegetable-oil supplies, and at that time the average was US$1,622
per tonne. The Group received, at mill-gate, an average price of
US$755 per tonne for its output in the first half of 2023, and this
was 27% lower than the US$1,035 per tonne received in the first
half of 2022.
Total production costs per tonne of CPO fell during the first
half of the year, as the Group was able to purchase crop from
independent suppliers at a lower price, resulting in a total cost
per tonne of US$574 (2022 US$598), but the cost of production from
the Group's own areas increased to US$535 per tonne (2022 US$425)
as the Group continued to experience cost inflation, notably in
fertiliser inputs. Inflationary pressures are starting to abate,
and this effect, combined with rising production, is expected to
exert downward pressure on the Group's own cost per tonne in the
second half of the year.
The lower CPO price environment for the first half of the year
resulted in lower margins, but the Group has continued to be cash
generative, with cash from operating activities of US$20.4 million
to June 2023. The continuing cash generation combined with the
Group's very strong opening position in 2023 (gross cash of US$82.5
million) has enabled it to fund the acquisition of the additional
hectarage at Simpang Kiri, continue to reduce the Group's remaining
debt, and at the same time return over US$25 million to
shareholders through a combination of dividends and share
buybacks.
Post balance-sheet event
On 7 September 2023, the Group announced that it had signed a
conditional agreement to acquire a further 8,350 planted hectares
in East Kalimantan (including 1,686 scheme-smallholder hectares),
for a price of US$60 million, representing US$9,000 per planted
Group-owned hectare. The crop from the majority of these planted
hectares will be available to supply the Group's existing mills at
Kota Bangun, increasing the utilisation and efficiency of the
milling operations there. Like the purchase at Simpang Kiri in
March 2023, this acquisition is fully aligned with the Group's
long-standing strategy to add additional planted hectarage around
its existing operations.
Dividends
Given the Group's continuing ability to generate profits and
cash, and in light of the strategic progress made in the first
half, and moving into the second half of 2023, the board is
maintaining the interim dividend at 12.5p per share (2022 - 12.5p
per share).
The Group has an unbroken track record over more than thirty
years, of at least maintaining, or whenever possible increasing,
ordinary dividends. The board believes that the ongoing trend of
increasing yields from the Group's estates, combined with the
increasing milling capacity, forms a firm foundation for continuing
strong cash flows, which in turn supports the Group's progressive
dividend policy.
Results for the period
Crops and production
Details of the Group's crops, production extraction rates and
average selling prices for the first half of 2023 are shown in the
following table:
6 months ended 6 months Year ended
ended
30 June Increase/ 30 June 31 December
2023 (decrease) 2022 2022
Tonnes % Tonnes Tonnes
Own crops
Kota Bangun 110,900 4 106,200 219,400
Bangka 57,900 (30) 82,900 167,200
Pangkatan group 78,200 (13) 89,900 192,500
Bumi Mas 75,200 (6) 80,000 166,700
Musi Rawas 61,600 26 49,000 107,600
Simpang Kiri 24,300 8 22,400 52,000
408,100 (5) 430,400 905,400
---------- ----------- ------------
Scheme-smallholder crops
Kota Bangun 46,500 6 44,000 91,000
Bangka 34,500 (22) 44,400 91,200
Pangkatan Group 700 75 400 900
Bumi Mas 13,400 - 13,400 30,600
Musi Rawas 29,800 23 24,200 52,000
---------- ----------- ------------
124,900 (1) 126,400 265,700
---------- ----------- ------------
Independent crops purchased
Kota Bangun 66,300 (30) 95,200 191,700
Bangka 48,100 89 25,500 62,800
Pangkatan group 29,400 137 12,400 39,100
Bumi Mas 30,500 93 15,800 47,000
Musi Rawas 13,800 - - -
188,100 26 148,900 340,600
721,100 2 705,700 1,511,700
---------- ----------- ------------
Production
Crude palm oil
Kota Bangun 51,200 (8) 55,400 112,800
Bangka 31,700 (13) 36,600 75,100
Pangkatan group 24,300 2 23,800 53,300
Bumi Mas 28,000 12 25,100 56,200
Musi Rawas 23,900 - - -
---------- ----------- ------------
159,100 13 140,900 297,400
---------- ----------- ------------
Musi Rawas 1,600 (89) 14,900 32,600
Simpang Kiri 5,500 10 5,000 11,700
---------- ----------- ------------
7,100 (64) 19,900 44,300
---------- ----------- ------------
166,200 3 160,800 341,700
---------- ----------- ------------
Palm kernels
Kota Bangun 10,900 (11) 12,200 23,800
Bangka 7,900 (10) 8,800 18,400
Pangkatan group 5,300 (4) 5,500 12,200
Bumi Mas 4,700 12 4,200 9,600
Musi Rawas 4,300 - - -
---------- ----------- ------------
33,100 8 30,700 64,000
---------- ----------- ------------
Musi Rawas 400 (88) 3,400 7,500
Simpang Kiri 1,100 10 1,000 2,300
---------- ----------- ------------
1,500 (66) 4,400 9,800
---------- ----------- ------------
34,600 (1) 35,100 73,800
---------- ----------- ------------
Extraction rate % % %
Crude palm oil
Group mills
Kota Bangun - Bumi Permai 23.9 3 23.3 23.3
Kota Bangun - Rahayu 21.3 - 21.4 21.2
Bangka 22.6 (5) 23.9 23.4
Pangkatan group 22.4 (3) 23.2 22.9
Bumi Mas 23.5 2 23.1 23.0
Musi Rawas 24.6 - - -
23.1 - 23.1 22.9
----- ------ ------
Third party mills
Musi Rawas 20.5 - 20.4 20.4
Simpang Kiri 22.5 - 22.5 22.5
----- ------ ------
Palm kernels
Group mills
Kota Bangun - Bumi Permai 5.4 2 5.3 5.1
Kota Bangun - Rahayu 4.2 (2) 4.3 4.2
Bangka 5.6 (5) 5.9 5.7
Pangkatan group 4.9 (8) 5.3 5.2
Bumi Mas 4.0 5 3.8 3.9
Musi Rawas 4.4 - - -
4.8 (6) 5.1 4.9
----- ------ ------
Third party mills
Musi Rawas 4.7 - 4.7 4.7
Simpang Kiri 4.5 - 4.5 4.5
Average selling prices US$ US$
CPO (cif Rotterdam) 986 (39) 1,622 1,345
CPO - Group mill gate 755 (27) 1,035 854
---------------------------- ----- ---- ------ ------
Palm-kernel oil 915 (54) 1,968 1,073
Palm kernels - Group
mill gate 410 (51) 830 611
---------------------------- ----- ---- ------ ------
Mill-gate prices
CPO prices were exceptionally high during the first half of
2022, as commodity markets responded to the outbreak of war between
Russia and Ukraine, and there were particular concerns over global
vegetable-oil shortages. During that period, CPO prices (cif
Rotterdam) peaked at almost US$2,000 per tonne, and the average was
US$1,622 per tonne. Prices have stabilised since then, and in the
first half of 2023, the average price was US$986 per tonne, 39%
lower. The Group does not receive the cif Rotterdam price when
selling its output, but rather a 'mill-gate' price based on regular
sales tenders. These prices are lower to take account of freight
and insurance costs, but also to allow for export taxes and levies
imposed by the Indonesian government. These are charged using
graduated scales, and the Group benefited from lower taxes and
levies in the first half of 2023. As a result, the reduction in
mill-gate price was smaller than the reduction in the cif Rotterdam
reference price, and the Group achieved an average mill-gate price
of US$755 per tonne in the period to June 2023, 27% lower than in
the first half of 2022.
The increase in palm-kernel prices had been even more marked
than the CPO price increase in the first half of 2022, and so the
Group similarly experienced a reduction in the average price
achieved for its PK sales during the period to June 2023. The
average price for PK sales to June 2023 was US$410 per tonne, a
little less than half the US$830 for the first half of 2022.
Sustainability
Being a producer of certified sustainable CPO and PK remains a
core part of the Group's strategy, and brings with it a significant
financial benefit. In the first half of the year, the Group's
sustainability income was US$3.2 million, similar to the US$3.3
million achieved in the first half of 2022. 71% of the output from
the Group's certified mills was available for sale with
sustainability credits, with a small part of these sales being held
over to the second half of the year. In the first half of the year,
the Group produced 96,500 tonnes of certified sustainable CPO, up
by 7% from the 90,500 tonnes produced in the first half of 2022.
The average premia for CPO when sold as certified oil was US$16.00
(2022 US$17.50), slightly lower than the previous period in
response to lower underlying CPO prices. Demand for certified PK
remained strong with average premia increasing to US$108.80 (2022
US$87.20).
As reported in the 2022 annual report, the Group has started to
follow the guidelines laid down by the Taskforce on Climate-related
Financial Disclosures ("TCFD") to determine its greenhouse gas
emissions. The Group set 2021 as its baseline year for reporting,
and in that year calculated a total of 2.72 million tonnes of CO(2)
equivalent emissions, including both direct (scope 1 and 2) and
indirect (scope 3) emissions. At the time of publishing the 2022
annual reporting, scope 3 emissions for 2022 were still being
collated, but the Group can now report a 2022 total of 2.38 million
tonnes of CO(2) equivalents, a 12% reduction from the previous
year. The fall in emissions is mainly as a result of opening the
Group's fifth palm-oil mill in 2022, reducing scope 3 emissions
from processing Group crop in outside mills. The Group can expect a
further reduction from this source of emissions in 2023 due to the
opening of the Group's sixth mill.
The Group is scheduled to be publishing a detailed, standalone,
TCFD report in September 2023, a copy of which will be available on
the Group's website. In addition, a separate report on wider
environmental, sustainability and governance ("ESG") matters will
be published later this year, and will also be available on the
Group website.
Costs
The cost per tonne of palm product produced from the Group's own
areas increased in the first half of the year to US$535 per tonne
(2022 US$425 per tonne). There were three main reasons for this.
Firstly, as already mentioned, the first part of the year was a
relatively low-cropping period in several parts of Indonesia and,
whilst some of the Group's costs vary with production, there are
also significant fixed costs, and these led to an increase in unit
costs in the first half, by approximately US$50 per tonne.
Secondly, the Group continued to feel the effects of inflation,
particularly in relation to fertiliser, which is one of the largest
external costs on Group estates. Total expenditure on fertiliser
doubled in the first half of the year, adding approximately US$50
per tonne to unit costs. Finally, the Group added another new mill
during the first half of the year, and cost of production is
inevitably higher than other mills at the start of production.
Moving into the second half of the year, unit costs are expected
to fall as production increases, and also as fertiliser costs start
to fall. The Group has already secured its fertiliser supplies for
the remainder of 2023 at a lower cost than those applied in the
first half.
The Group purchases ffb to process in its mills, both from its
associated scheme smallholders and from independent suppliers. The
price paid to purchase crop is linked to the CPO commodity price,
and so the Group was able to secure ffb in the first half of 2023
at a lower price than in the same period in 2022. This helped to
reduce the Group's overall cost of production to US$574 per tonne
(2022 US$598 per tonne).
Planting
The Group continued to plant at its Musi Rawas estate in South
Sumatra in the first half of 2023, and as the planted hectarage
there continues to mature, the crop available for processing in the
Group's new mill will increase. During the first half of 2023 the
Group planted a total of 362 further Group-owned hectares. As a
result, the Group has achieved its objective of planting a total of
10,000 hectares at Musi Rawas. Further planting will take place
when further areas become available.
New land
The Group's long-standing strategy has been to continue to
increase its planted hectarage, both through further planting at
existing properties, and by acquiring additional planted land. In
March 2023, the Group was successful in acquiring 2,100 planted
hectares adjacent to its Simpang Kiri estate in Aceh Province,
northern Sumatra. The purchase cost was US$7,000 per planted
hectare, and the Group has already embarked upon a replanting
programme in some areas to work towards bringing the newly acquired
land up to Group standards.
In addition, after the end of the period, the Group announced
that it had signed a conditional agreement for the acquisition of a
further 8,350 planted hectares, inclusive of 1,686
scheme-smallholder hectares, in East Kalimantan, for a price of
US$9,000 per planted Group-owned hectare. In accordance with the
Group's strategy of maximising the utilisation of its existing
milling capacity, the crop from the majority of these hectares will
be sent for processing to the Group mills at Kota Bangun.
Associated companies
The Group's 40%-held Malaysian property joint venture, Bertam
Properties Sdn Berhad ("Bertam Properties") again traded profitably
in the first half of 2023 as it continues to develop high-quality
and affordable homes within its market in Malaysia. The Group's
share of Bertam Properties' profit in the period was US$0.2 million
(2022 US$0.1 million). The Group's 38%-owned Indonesian oil-palm
associate, PT Kerasaan Indonesia saw a reduction in profits in the
first half of the year, primarily as a result of the lower CPO
price environment. The Group's share of their profit in the period
was US$0.6 million (2022 US$1.1 million).
Result
Overall, the Group recorded revenue of US$134.5 million for the
first half of 2023, a reduction of 21% on the same period in 2022,
primarily due to the lower mill-gate price for Group sales of both
CPO and PK. The lower price environment had a consequential effect
on margins, with the Group achieving a gross margin in the period
to June 2023 of 17% (2022 - 38%) and a gross profit of US$23.1
million (2022 US$64.8 million). There was a small foreign exchange
gain of US$0.6 million in the first half (2022 loss of US$1.9
million) as the Indonesian Rupiah strengthened slightly against the
US Dollar, whilst administrative expenses increased in the period
due to the phasing of certain expenditure including professional
fees and travel, with visits to Indonesia only restarting in the
second half of 2022, and a board trip taking place in the first
half of 2023. Other income, at US$1.2 million, was higher than in
the prior year as the Group was able to command higher prices for
its empty kernel shells, a by-product from the milling process.
Finance costs increased to US$1.7 million (2022 US$1.2 million) as
interest rates on the Group's remaining debt were higher during the
period. The profit for the period was US$17.8 million (2022 US$48.2
million) and earnings per share were 24.8p (2022 - 63.3p).
CURRENT TRADING AND PROSPECTS
The total crop processed in the two months to 31 August 2023 was
318,800 tonnes, an increase of 18% from the 270,700 tonnes
processed in the same period of 2022. This brings the total for the
year to date to 1,039,900 tonnes as shown in the following
table:
8 months ended 8 months
ended
31 August 31 August
2023 Decrease 2022
Tonnes % Tonnes
--------------------------------- ------------- -------- ----------
Own crops 593,700 (2) 604,200
Scheme-smallholder crops 179,100 1 176,600
Independent crops purchased 267,100 37 195,600
1,039,900 7 976,400
------------- ----------
During the two months to August 2023, the crops harvested from
the Group's majority-owned areas and from its associated
scheme-smallholder areas were significantly higher than in the
first half of the year, averaging 119,900 tonnes, 35% higher than
the 88,800-tonne average in the first half of the year. As a
result, crop from majority-owned areas continued to reduce the gap
to prior-year amounts, and is expected to go beyond prior-year
levels in the coming months, as has crop from scheme-smallholder
areas. Crop from independent suppliers continues to be
significantly in excess of prior-year levels.
The Group was delighted to report, in September 2023, that it
had signed a conditional agreement for the acquisition of a further
8,350 planted hectares in East Kalimantan. Once this transaction
has been completed, the Group will have total planted hectarage
under management of over 65,000 hectares, an increase of more than
10,000 hectares in less than 12 months. All of the new planted
hectarage in East Kalimantan is relatively young, with planting
having started in 2017 and an average age of 5 years. The Group can
look forward to increasing yields as the palms mature in the coming
years. The majority of the new hectarage will supply crop to the
Group's existing mills at Kota Bangun, increasing the utilisation
and efficiency of the operations there.
Since the end of the end of the first half, CPO has traded
between US$930 and US$1,055 per tonne cif Rotterdam, not dissimilar
to the average for the first half of the year of US$986 per tonne.
Mill-gate prices have also been similar to those in the first half
of the year, and the Group has received recent pricing between
US$700-740 per tonne for its CPO output.
The board remains firmly of the view that, with the Group's
increased hectarage and prospects for continued increases in crop
and production, as a producer of sustainable palm oil, the Group is
in a strong position to continue to deliver healthy cash flows, and
attractive shareholder returns.
UNAUDITED CONSOLIDATED INCOME STATEMENT
For the six months ended 30 June 2023
6 months 6 months
ended ended Year ended
30 June 30 June 31 December
2023 2022 2022
Note US$'000 US$'000 US$'000
--------------------------------------- ---- ---------- ---------- ------------
Continuing operations
Revenue 3 134,469 170,282 326,917
Cost of sales (111,331) (105,516) (217,707)
--------------------------------------- ---- ---------- ---------- ------------
Gross profit 3 23,138 64,766 109,210
Gain/(loss) on biological assets 1,025 233 (1,431)
Foreign-exchange gains/(losses) 582 (1,864) (3,444)
Other administrative expenses (2,590) (2,290) (4,614)
Other income 1,223 856 1,865
--------------------------------------- ---- ---------- ---------- ------------
Operating profit 23,378 61,701 101,586
Finance income 600 679 1,395
Finance costs (1,683) (1,154) (2,731)
--------------------------------------- ---- ---------- ---------- ------------
Profit before taxation 22,295 61,226 100,250
Tax on profit on ordinary activities (5,267) (14,218) (24,073)
--------------------------------------- ---- ---------- ---------- ------------
Profit after tax 17,028 47,008 76,177
Share of associated companies'
profit after tax 3 786 1,197 2,184
--------------------------------------- ---- ---------- ---------- ------------
Profit for the period 17,814 48,205 78,361
--------------------------------------- ---- ---------- ---------- ------------
Attributable to:
Owners of M.P. Evans Group PLC 16,586 45,004 73,060
Non-controlling interests 1,228 3,201 5,301
--------------------------------------- ---- ---------- ---------- ------------
17,814 48,205 78,361
US cents US cents US cents
--------------------------------------- ---- ---------- ---------- ------------
Continuing operations
Basic earnings per 10p share 30.8 82.3 133.9
Diluted earnings per 10p share 30.7 82.0 133.4
--------------------------------------- ---- ---------- ---------- ------------
Pence Pence Pence
--------------------------------------- ---- ---------- ---------- ------------
Basic earnings per 10p share
Continuing operations 24.8 63.3 108.0
--------------------------------------- ---- ---------- ---------- ------------
UNAUDITED CONSOLIDATED BALANCE SHEET
As at 30 June 2023
30 June 30 June 31 December
2023 2022 2022
Note US$'000 US$'000 US$'000
--------------------------------- ---- -------- -------- ------------
Non-current assets
Goodwill 11,767 11,767 11,767
Other intangible assets 1,077 1,139 1,167
Property, plant and equipment 427,936 403,578 411,658
Investments in associates 11,654 13,440 11,795
Investments 58 61 61
Deferred-tax asset 1,020 1,246 989
Trade and other receivables 9,232 15,226 9,146
--------------------------------- ---- -------- -------- ------------
462,744 446,457 446,583
--------------------------------- ---- -------- -------- ------------
Current assets
Biological assets 4,114 4,753 3,089
Inventories 28,567 36,109 23,112
Trade and other receivables 29,905 26,931 32,681
Current-tax asset 5,740 2,673 2,290
Cash and cash equivalents 42,882 69,977 82,503
111,208 140,443 143,675
--------------------------------- ---- -------- -------- ------------
Total assets 573,952 586,900 590,258
--------------------------------- ---- -------- -------- ------------
Current liabilities
Borrowings 19,001 16,130 17,364
Trade and other payables 29,080 30,727 24,410
Current-tax liabilities 294 5,335 4,455
--------------------------------- ---- -------- -------- ------------
48,375 52,192 46,229
--------------------------------- ---- -------- -------- ------------
Net current assets 62,833 88,251 97,446
--------------------------------- ---- -------- -------- ------------
Non-current liabilities
Borrowings 21,364 40,366 31,675
Deferred-tax liability 13,478 12,391 13,538
Retirement-benefit obligations 11,199 12,803 9,972
--------------------------------- ---- -------- -------- ------------
46,041 65,560 55,185
--------------------------------- ---- -------- -------- ------------
Total liabilities 94,416 117,752 101,414
--------------------------------- ---- -------- -------- ------------
Net assets 479,536 469,148 488,844
--------------------------------- ---- -------- -------- ------------
Equity
Share capital 6 9,124 9,228 9,179
Other reserves 54,642 57,630 54,543
Retained earnings 397,605 386,796 407,460
--------------------------------- ---- -------- -------- ------------
Equity attributable to the
owners of M.P. Evans Group PLC 461,371 453,654 471,182
Non-controlling interests 18,165 15,494 17,662
--------------------------------- ---- -------- -------- ------------
Total equity 479,536 469,148 488,844
--------------------------------- ---- -------- -------- ------------
UNAUDITED STATEMENT OF CHANGES IN CONSOLIDATED EQUITY
For the six months ended 30 June 2023
6 months 6 months Year
ended ended ended
30 June 30 June 31 December
2023 2022 2022
US$'000 US$'000 US$'000
------------------------------------- ------ --------- --------- ------------
Profit for the period 17,814 48,205 78,361
Other comprehensive expense for
the period (1,352) (1,459) (542)
--------------------------------------------- --------- --------- ------------
Total comprehensive income for
the period 16,462 46,746 77,819
--------------------------------------------- --------- --------- ------------
Issue of share capital - 191 191
Share buybacks (5,129) (798) (4,902)
Dividends paid (20,760) (22,121) (29,732)
Credit to equity for equity-settled
share-based payments 119 82 420
Transactions with owners (25,770) (22,646) (34,023)
--------------------------------------------- --------- --------- ------------
At 1 January 488,844 445,048 445,048
--------------------------------------------- --------- --------- ------------
Balance at period end 479,536 469,148 488,844
--------------------------------------------- --------- --------- ------------
UNAUDITED CONSOLIDATED CASH-FLOW STATEMENT
For the six months ended 30 June 2023
6 months 6 months Year
ended ended ended
30 June 30 June 31 December
2023 2022 2022
Note US$'000 US$'000 US$'000
---------------------------------------- ---- --------- --------- ------------
Net cash generated by operating
activities 7 20,411 50,642 102,288
---------------------------------------- ---- --------- --------- ------------
Investing activities
Purchase of property, plant and
equipment (23,824) (13,920) (33,714)
Purchase of intangible assets - - (116)
Interest received 227 405 622
(Increase)/decrease in receivables
from smallholder
co-operatives (2,973) 3,943 1,714
Proceeds on disposal of property,
plant and equipment 66 137 3,055
Net cash used by investing activities (26,504) (9,435) (28,439)
---------------------------------------- ---- --------- --------- ------------
Financing activities
Repayment of borrowings (8,674) (14,552) (22,009)
Lease liability payments - (38) (38)
Dividends paid to Company shareholders (20,035) (20,889) (28,500)
Dividends paid to non-controlling
interest (72) (123) (124)
Issue of Company shares - - 191
Buyback of Company shares (5,129) (798) (4,902)
---------------------------------------- ---- --------- --------- ------------
Net cash used by financing activities (33,910) (36,400) (55,382)
---------------------------------------- ---- --------- --------- ------------
Net (decrease)/increase in cash
and cash equivalents (40,003) 4,807 18,467
Cash and cash equivalents at 1
January 82,503 65,609 65,609
Effect of foreign-exchange rates on cash
and cash
equivalents 382 (439) (1,573)
Net cash and cash equivalents at
period end 42,882 69,977 82,503
---------------------------------------- ---- --------- --------- ------------
NOTES TO THE INTERIM STATEMENTS
For the six months ended 30 June 2023
Note 1 General information
The financial information for the six-month periods ended 30
June 2023 and 2022 has been neither audited nor reviewed by the
Group's auditors and does not constitute statutory accounts within
the meaning of section 434 of the Companies Act 2006. The financial
information for the year ended 31 December 2022 is abridged from
the statutory accounts. The 31 December 2022 statutory accounts
have been reported on by the Group's auditors for that year, BDO
LLP, and have been filed with the Registrar of Companies. The
report of the auditors thereon was unqualified and did not contain
a statement under section 498(2) or (3) of the Companies Act 2006,
nor did it contain any matters to which the auditors drew attention
without qualifying their audit report.
Note 2 Accounting policies
The consolidated financial results have been prepared in
accordance with International Financial Reporting Standards (IFRS
and IFRIC interpretations) issued by the International Accounting
Standards Board (IASB), and with those parts of the Companies Act
2006 applicable to companies preparing accounts under IFRS.
The accounting policies of the Group follow those set out in the
annual financial statements at 31 December 2022. The Group has made
a number of critical accounting judgements and key estimates in the
preparation of this interim report, and they remain consistent with
those set out in note 3(r) to the 2022 annual financial
statements.
Note 3 Segment information
The Group's reportable segments are distinguished by location
and product: Indonesian oil-palm plantation products in Indonesia
and Malaysian property development.
Plantation Property
Indonesia Malaysia Other Total
US$'000 US$'000 US$'000 US$'000
-------------------------------- ------------ --------- --------- ---------
6 months ended 30 June 2023
Revenue 134,469 - - 134,469
Gross profit 23,138 - - 23,138
Share of associated companies'
profit after tax 545 241 - 786
-------------------------------- ------------ --------- --------- ---------
6 months ended 30 June 2022
Revenue 170,282 - - 170,282
Gross profit 64,766 - - 64,766
Share of associated companies'
profit after tax 1,108 89 - 1,197
-------------------------------------- ------ --------- --------- ---------
Year ended 31 December 2022
Revenue 326,872 - 45 326,917
Gross profit 109,165 - 45 109,210
Share of associated companies'
profit after tax 1,677 507 - 2,184
-------------------------------- ------------ --------- --------- ---------
Note 4 Dividends
6 months ended 6 months ended Year ended
30 June 30 June 31 December
2023 2022 2022
US$'000 US$'000 US$'000
------------------------------- --------------- --------------- ------------
2021 final dividend - 25p per
10p share - 17,227 17,227
2021 special dividend - 5p
per 10p share - 3,662 3,662
2022 interim dividend - 12.5p
per 10p share - - 7,611
2022 final dividend - 30p per 20,035 - -
10p share
20,035 20,889 28,500
------------------------------- --------------- --------------- ------------
Subsequent to 30 June 2023, the board has declared an interim
dividend of 12.5p per 10p share. The dividend will be paid on or
after 3 November 2023 to those shareholders on the register at the
close of business on 13 October 2023.
Note 5 Acquisition
On 6 March 2023, the Group acquired 100% of the shares in two
Indonesian companies, PT Teunggulon Raya and PT Dharma Agung for
gross consideration of US$15.5 million. The companies have 2,100
hectares planted with oil palm, and all of the planted areas are
fully titled, with long leaseholds already established. The planted
land is close to the Group's Simpang Kiri estate in Aceh province,
northern Sumatra.
The transaction has been treated as an asset acquisition, based
on the concentration test guidelines in IFRS 3 . Net consideration
of US$11.0 million was paid, made up of assets acquired of US$15.5
million and liabilities assumed of US$4.5 million. Of the assets
acquired, US$15.0 million related to the planted hectarage.
Note 6 Share capital
30 June 30 June 31 December 30 June 30 June 31 December
2023 2022 2022 2023 2022 2022
Number Number Number US$'000 US$'000 US$'000
-------------- ----------- ----------- ------------ -------- -------- ------------
Shares of 10p each
At 1 January 54,230,888 54,696,253 54,696,253 9,179 9,232 9,232
Issued 50,000 30,000 30,000 6 4 4
Redeemed (492,792) (69,604) (495,365) (61) (8) (57)
-------------- ----------- ----------- ------------ -------- -------- ------------
At period
end 53,788,096 54,656,649 54,230,888 9,124 9,228 9,179
-------------- ----------- ----------- ------------ -------- -------- ------------
Note 7 Analysis of movements in cash flow
6 months ended 6 months ended Year ended
30 June 30 June 31 December
2023 2022 2022
US$'000 US$'000 US$'000
------------------------------------- ----------------- --------------- ------------
Operating profit 23,378 61,701 101,586
Biological (gain)/loss (1,025) (233) 1,431
Disposal of property, plant
and equipment 1 242 845
Release of deferred profit (36) (16) (40)
Depreciation of property, plant
and equipment 11,840 10,968 21,931
Amortisation of intangible
assets 90 83 171
Retirement-benefit obligation 115 (83) (586)
Share-based payments 119 272 420
Dividends from associated companies - - 2,656
------------------------------------- ----------------- --------------- ------------
Operating cash flows before
movements
in working capital 34,482 72,934 128,414
Increase in inventories (5,455) (14,355) (1,358)
Decrease in receivables 5,005 11,575 11,864
Increase/(decrease) in payables 1,107 (435) (6,752)
------------------------------------- ----------------- --------------- ------------
Cash generated by operating
activities 35,139 69,719 132,168
Income tax paid (13,045) (17,923) (27,149)
Interest paid (1,683) (1,154) (2,731)
------------------------------------- ----------------- --------------- ------------
Net cash generated by operating
activities 20,411 50,642 102,288
------------------------------------------ ------------ --------------- ------------
Note 8 Exchange rates
30 June 30 June 31 December
2023 2022 2022
------------------------------------------ ------- -------- ------------
US$1=Indonesian
Rupiah * average 15,053 14,452 14,853
* period end 14,993 14,898 15,568
------------------------------------------ ------- -------- ------------
US$1=Malaysian
Ringgit * average 4.46 4.27 4.40
* period end 4.67 4.41 4.41
------------------------------------------ ------- -------- ------------
GBP1=US Dollar * average 1.24 1.30 1.24
* period end 1.27 1.21 1.20
Note 9 Post balance-sheet event
On 7 September 2023, the Group announced that it had signed a
conditional agreement to acquire a further 8,350 planted hectares
in East Kalimantan (inclusive of 1,686 scheme-smallholder
hectares), for a price of US$60 million, representing US$9,000 per
planted Group-owned hectare. The crop from the majority of these
planted hectares will be available to supply the Group's existing
mills at Kota Bangun, increasing the utilisation and efficiency of
the milling operations there. Like the purchase at Simpang Kiri in
March 2023, this acquisition is fully aligned with the Group's
long-standing strategy to add additional planted hectarage around
its existing operations.
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END
IR FLFSEASITIIV
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