AGM Statement

RNS Number : 9415E

M. P. Evans Group PLC

08 June 2012

 



M.P. EVANS GROUP PLC

The annual general meeting of M.P. Evans Group PLC ("the Group") is being held in London today.  The following statement, presenting an update on trading conditions and progress on the Group's activities since the publication of the annual report in late April, is being given at the meeting by the chairman, Peter Hadsley-Chaplin:-

1)        Indonesian palm oil

2012 started well with improved crops and strong palm-oil prices.  The palm-oil price has eased over the last few weeks but nevertheless remains at historically-high levels.

a)        Prices

            In the early part of the year, prices climbed to the robust level of just below US$1,200 per tonne (Rotterdam c.i.f.) following concerns about weather-affected soybean crops in South America, lower palm-oil production in South East Asia and continuing demand for vegetable oils.  These conditions still largely apply although commodities in general, including palm oil, have fallen as a result of negative sentiment related to the European debt crisis.  The current price level is around US$1,000 per tonne which, in historical terms, is still at a strong level.  Furthermore, export tax at 13.5% is 6% lower than at the high point referred to above.

b)        Crops

            As expected, the crops of oil-palm fresh fruit bunches ("f.f.b.") from the two new, majority-owned, projects continue to increase sharply.  For the first five months of 2012, the crop amounted to 34,200 tonnes, a 93% increase over the 17,700 tonnes harvested in the same period in 2011.

            The f.f.b. crops from the majority-owned established estates in Sumatra for this period amounted to 79,800 tonnes compared with 76,000 tonnes for the same period last year.  This represents an increase of 5%.  The total crops for the Group's majority-owned estates (both new and established) amounted to 114,000 tonnes, an overall increase of 22% over the same period in 2011.

            The rapid increase in f.f.b. production from the new projects is expected to continue.  As referred to in my statement in the 2011 annual report, it remains the board's expectation that, following 250,000 tonnes in 2011, production for 2012 is expected to be approximately 300,000 tonnes, rising to 500,000 tonnes in 2015.

            The new palm-oil mill in Kalimantan started successfully at the end of 2011 and continues to achieve good extraction rates of over 24%.  The marked increase in the production of f.f.b. and, in turn, of palm oil and palm kernels will have a very positive impact on the Group's revenues in 2012 and beyond.

            The f.f.b. crops from the Indonesian associated companies for the five-month period amounted to 151,000 tonnes, similar to the 149,700 tonnes for the same period in 2011.

c)        New Indonesian palm-oil projects

In the first five months of 2012, some 520 hectares have been planted on the new projects, of which 360 hectares relate to the Group and 160 hectares to the smallholders' cooperatives.  It is expected that the rate of planting will accelerate in the remainder of the year.

The board continues to review possible new areas of environmentally-suitable land for the Group's palm-oil expansion.

d)        Sustainability

The Round Table on Sustainable Palm Oil ("RSPO") audit of the Pangkatan mill and its satellite estates has been completed.  It is expected that formal accreditation will be received later in the year.

Now that the palm-oil mill is operating on the new Kalimantan project, arrangements are being made for the RSPO "pre-audit" to commence.  It is hoped that the final audit and accreditation will be completed by early 2013.

A feature of the Kalimantan project is not only, as on Pangkatan Estate, the production of organic compost but also, from September, the generation of electricity using methane captured from the mill effluent.

2)        Australian beef cattle

Woodlands and the NAPCo properties have enjoyed another good season so far this year with the cattle in excellent condition.  The recent rainfall at Woodlands should ensure a successful forage-oats crop and enable the herd to be maintained at around 10,000 head, with increased weight gains, over the winter period.  Cattle prices are below the five-year record-high levels recorded in January of this year but are still trading at historically-strong levels.  The recently-expanded feedlot capacity is increasingly now being utilised and the NAPCo management is taking advantage of the recent decline in grain prices to buy in grain for future use.

3)        Malaysian property

Land sales and successful property development by Bertam Properties continue and cash realisations are periodically distributed as dividends. 

4)        Financial position

            Positive cash flows have ensured the Group remains liquid and able to support its planned investment programme.  The Group continues to have a strong balance sheet.

8 June 2012

Enquiries:

M.P. Evans Group PLC                                                                                       Telephone: [phone]

Peter Hadsley-Chaplin, chairman                                                

Philip Fletcher, managing director

Tristan Price, finance director

Peel Hunt

Dan Webster                                                                                                         Telephone: [phone]

Matthew Armitt

Richard Brown

Hudson Sandler                                                                                                    Telephone: [phone]

Charlie Jack

Katie Matthews

 

END

 

 

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