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LONDON (Alliance News) - M.P. Evans Group PLC Monday reported a higher pretax profit for the first half of 2014, boosted by higher palm-oil prices and lower costs, but warned that a dry spell earlier in the year and a drop in prices since the start of the second half has hit current trading.
The producer of Indonesian palm oil and Australian beef cattle reported a pretax profit of USD12.0 million before biological bearer-asset adjustment for the six months to June 30, compared with USD3.0 million in the first half of 2013.
It said profit was driven by higher crops, a slightly-improved palm-oil price and lower costs. Revenue increased to USD47.5 million, from USD38.4 million a year earlier.
"However, an acute dry spell at the beginning of the year has meant that crop estimates in the second half of the year and for 2015 have had to be reduced. The palm-oil price has reacted to high soybean crops and has fallen quite sharply since the mid-year," said Chairman peter Hadsley-Chaplin in a statement.
The company maintained its interim dividend at 2.25 pence per share,
It said negotiations are in progress for the sale of the Woodlands cattle-fattening property in Australia, which carried some 3,837 head of cattle at the end of 2013. It's a 31,000 hectare site. It has been reviewing opportunities regarding its Australian beef cattle interests.
"Cattle operations were curtailed at a lower level than would have been the case if operations were planned to continue. As a result of both this and a challenging season, the loss incurred in the first half of 2014 increased when compared to the same period in 2013," the company said.
It said it will continue to hold its 34.37% investment in The North Australian Pastoral Company, one of the biggest cattle companies in Australia which owns some 5.8 million hectares of land in the Northern Territory and Queensland with a normal carrying capacity of some 200,000 head of cattle.
Prospects for the cattle price in Australia are more encouraging following some welcome rain and signs of improvement in export demand, said Hasley-Chaplin.
MP Evans said the expected increase in the crop of oil-palm fresh fruit bunches on its majority-owned estates continued, with the overall level 17% higher in the first half of 2014 at 183,600 tonnes, compared with 156,800 tonnes in the first half of 2013. It said the average palm-oil price was 6% higher in the first half of the year, whilst the price of palm kernels was nearly 60% higher.
The company's stock was trading down 2.2% at 46.00 pence Monday.
By Rowena Harris-Doughty; rowenaharrisdoughty@alliancenews.com; @rharrisdoughty
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