M.p. Evans Share Discussion Threads

[bobdouthwaite] 23/11/2021 12:08

hxxps://www.mpevans.co.uk/palm-oil/sustainable-palm-oil

I've been invested in them for some years and am not aware of any expansion into primary forest.

[wad collector] 23/11/2021 11:48

I wonder where the COP26 deforestation statements take MPE.
If the consensus is that MPE are a responsible manager of the plantations and not looking to extend the planting then may be OK.
But if seen as expansionist monocultural exploiters , then not good, unless you view the whole COP26 as toothless virtue signalling that won't be backed by action in the real commercial world.

[forensic] 16/11/2021 10:14

What are they forecasting?

[hrvey8888] 15/11/2021 20:55

Couple of upgrades :)

[wad collector] 23/9/2021 22:59

Tipped in IC this week , citing Peel Hunt upgrade including a EPS forecast of 90cents for full year.

[nobull] 19/9/2021 14:29

Thanks to dandigirl for this link:

[nobull] 17/9/2021 15:09

Press release today:

IN BRIEF: MP Evans sees "dramatic increase in profit" on palm oil boom

MP Evans Group PLC - palm oil producer in Indonesia - On Monday reports results for half-year that ended June 30, saying operations were relatively unaffected by the Covid-19 pandemic and a significant increase in palm oil prices and production led to a "dramatic increase in profitability". Pretax profit multiplies to USD40.1 million from just USD4.4 million a year before, as revenue rises by 69% to USD128.0 million from USD75.9 million. MP Evans' crop production rises by 24% to 413,200 tonnes and output of crude palm oil grows by 29% to 161,400 tonnes. At the same time, average sales prices, even after taking into account an increased export levy, are 34% higher in the first half of 2021 than in the same period of 2020. This includes a USD10 per tonne premium that MP Evans receives for its oil as a sustainable producer.

Doubles interim dividend to 10 pence per share from 5p and says it intends to pay a dividend of at least 30p for 2021, up 36% from 22p in 2020.

Current stock price: 788.00p

Year-to-date change: up 19%

By Tom Waite; [e-mail]

[nobull] 15/9/2021 11:36

IC have us at "a buy" at £7.84p. According to the article, Peel Hunt have raised their FY2021 eps forecast 61% to 90.9 cents (65.65p at £0.72224 to $1). However, with our H1 eps of 38.1p, I think the full year forecast has scope to be upgraded slightly. Indeed, Finncap forecast 102 cents for the same period.

Personally, I think we are a good long term buy but there may be opportunities next year to get in a little bit cheaper, perhaps after the excitement about the FY2020 results has died down, if cpo prices fall from current levels, which the futures market seems to think they will. But surely the increasing production volumes forecast and the higher margins from doing more of their own milling will counteract that? Yes, but maybe not fully. Volume gearing effects aren't as powerful as price gearing effects, right?

My long term buy reason is that if you can earn 16%, pre-company profits tax, on £10.99 (the DCF valuation in the annual report on page 94), to give the cash flows Khong and Jaafar estimate over a 30 year period using a $610 ex-mill gate price, why not earn more than that by buying at today's share price of £7.90? The IC view is that they are a 'buy' because the milling capacity will have increased 50% on last year's, by 2025, and this gives scope for profitable growth. I think this company ticks the box "an average annual 12% CAGR machine at least". No, it won't be 12% every year: some years more, others, less. JMV.

[wad collector] 13/9/2021 22:10

A planned Divi rise to 30p for 2021 would give a rather respectable 3.75% yield if today's price held , and I suspect it will not stay here long. That is one of the best in my AIM portfolio and well covered too. Hold and prosper I think.

[galles] 13/9/2021 11:28

Agree. It's been many years in the waiting, that everything going in the right direction - CPO price, crop production, processing. Finally yielding investment on the crops and infrastructure. Would have hoped the dividend could have been higher but it's not a bad thing to be cautious

[nobull] 13/9/2021 07:15

Brilliant results. Doubled int div to 10p is unexpected (I was expecting 6p int + 24p final, although the 30p total div for FY 2021 is probably already priced in). The $738 8 month average ex mill gate price means my full year forecast above looks conservative. I expect Finncap will upgrade their eps forecast this morninng. Small share price rise maybe when market opens? Ex-mill gate price received last Tuesday would have been about $769 for example. CPO production for H1 was 161,400 tonnes against my estimate for full year of 340,000 tonnes, so 340,000 for full year looks possible, I wonder? The eps for H1 of 38.3p means most of the Full Year forecast eps has already been achieved! There is smallish backwardation on CPO prices for the remainder of the FY.

"In line with its growth programme, the Group plans to deliver ever-increasing returns to shareholders."

[nobull] 03/9/2021 15:34

Export tax has gone up three notches (from $93 to $166) but Palmoilanalytics.com says only two.

Ex-mill gate price was probably about $779 last Wednesday, the first day the new export tax level came into force. Can't see any reason why the above forecast for the full year will not be achieved,if not bettered. H1 results on 13/09/21, when I hope Finncap will upgrade their 52.5 cent eps forecast for 2021 to be more than mine. Fingers crossed.

[nobull] 09/8/2021 09:33

Brilliant announcement. That 81p eps imagined scenario in the company's June presentation (page 11) does not look so fanciful now. Of course it had no date on when it might occur; it was just trying to hint of things that might happen, right?

Well, with, say, 340,000 tonnes of CPO production for the full year (yes, I know H2 production exceeds H1, but I am just trying to be conservative in my forecast) and an average ex-mill gate price of, say, $710 (use your own price, here, as there still a lot of uncertainty over the remaining 4.5 months, and export tax will go up sharply in September),it is not impossible to see FY2021 revenue of $241m (FY2020 $174.5m). Page 10 makes clear the margin doubles when you do your own milling. Anyway, I won't be surprised to see the expected 30p div for 2021 more than twice covered by eps. Great announcement. Thank you.

[nobull] 19/7/2021 08:08

Ex mill gate average $724. Very good. This really sets the benchmark to judge the CEO at REA on - I bet they don't get an average realised ex-mill gate price anywhere near this - more like $660, I wonder? All this was achieved despite crippling levels of taxation for one month. But this is no excuse not to do some extension planting. Award of free shares should be tied to amount of extension planting done, should it not, not to rising cpo prices.

[nobull] 13/7/2021 07:36

Ha, so you've rumbled me.

[galeforce1] 12/7/2021 18:05

Noble - I guess KLK might go to £9 a share. I can't see them paying more than that.

[nobull] 12/7/2021 15:40

Why has he left? No job to go to. A bit odd. 20% premium? £8.52? No, thank you.
P.S. I'd have thought extension planting was the way to get the share price up to fend off a bid.

[galeforce1] 12/7/2021 14:48

Probably a good day to add a bit. I don't see anything in the RNS to cause a 5% drop. Peter Hadsley-Chaplin should be a steady hand on the tiller until a replacement for Tim Price is recruited.

It's surely just a question of time here before KLK bids for the whole company at a 20% premium.

[nobull] 29/6/2021 13:41

Export duty, levy to be lowered to $116/mt, $175/mt: sources



That is an extra $147 in less combined levy and tax per tonne we pay in July compared with June.

[nobull] 22/6/2021 07:28

Export Levy to be reduced from $255 to $175 when the CPO reference price is set at $1,000 or more. Implementation expected at the end of this month.

[nobull] 17/6/2021 07:38

How quickly things change: 17/05/21 CPO CIF Rotterdam $1,310, net of export deductions $916 and net of insurance and freight to Rotterdam $816; 14/06/21 CPO CIF Rotterdam $960, net of export deductions $532 and net of insurance and freight to Rotterdam $432.

The $255 export levy is set at ridiculous levels, particularly when Brent crude is $74 - not such a big biodiesel subsidy is needed.

[nobull] 10/6/2021 12:59

You were right about eps rocketing in the future: I see they gave a conservative illustration at $600 CPO price (presumably an ex-mill gate price) leading to 81p eps in 2024.

If you assume no further significant growth in eps after 2024 and you require a 12% earnings yield just for being in this kind of business in Indonesia, then that generates a price target of £6.75 (PE of 8.33). Of course if eps are going to continue growing after 2024, then the PE ratio will be a lot higher than 8.33. Hopefully, they will acquire more land near Simpang Kiri, build a new mill there, and more importantly get the extension planting done at Musi Rawas. If they do all the right things, growth wise, then a higher PE in 2024 would give a much more decent price target e.g. 14 x 81p = £11.34p. JMV.

[oli12] 04/6/2021 09:00

AGM next week - Hopefully a YTD update: based on the record Palm oil price and the anticipated crop growth, MPE should be on for a very good year.

[nobull] 21/4/2021 19:19

4,394 ringgit a tonne for the May CPO contract at that time, so a way to go yet, perhaps another $100, before the Rotterdam CPO price can overcome that US$1300 price barrier where the export levy and export tax cease to rise any further.

I make the average CPO price this year, net of export levy and export tax, about $762, which gives an ex mill gate price of, say, $712, if the freight and insurance to Rotterdam is, say, $50. The significance is we are in for another bumper year of high eps, eps propelled not just by higher volumes of cpo production but also by an average cpo price a bit higher than that obtained in FY2020.

Hopefully all this will be confirmed in the H1 2021 results.

Edit 22 04 21: Nothing to get excited about - yesterday's May cpo price rise was probably to accommodate the higher export tax coming into force in May, I wonder? Sorry I didn't realise that yesterday.

This is a good web site to see palm oil prices out into the future. Out of date spot prices can be found elsewhere.
hxxps://www.bursamalaysia.com/market_information/derivatives_prices?code=FCPO