Release Date: March 25, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- M P Evans Group PLC (FRA:NYP, Financial) reported record-breaking financial results for 2024, with revenue up 15%, gross profit up nearly 50%, and earnings per share up 66%.
- The company announced a 17% increase in its final dividend, reflecting strong financial performance and commitment to shareholder returns.
- M P Evans Group PLC has successfully maintained production levels despite weather challenges in Indonesia, showcasing resilience in operations.
- The company has made significant strides in sustainability, reducing its carbon balance sheet by 36% since 2021 and increasing the proportion of certified sustainable output to 69%.
- M P Evans Group PLC has a strong cash position, generating over $150 million from operations in 2024, highlighting its robust cash flow and financial health.
Negative Points
- The sustainability premium income decreased from $6.5 million to $5.6 million, despite an increase in certified volume, due to lower demand for certified products.
- There was a slight decrease in palm oil production in 2024 due to dry weather conditions in Indonesia, impacting overall yield.
- The cost of buying in fruit from outside suppliers increased, affecting the total cost per ton, which rose by 4% to $519.
- The company faces challenges in narrowing the gap between its share price and book value per share, despite strong financial performance.
- Uncertainty in the sustainability market, particularly with the impending introduction of new EU deforestation regulations, has impacted the premium for sustainable oil.
Q & A Highlights
Q: Does palm oil have a smaller carbon footprint compared to soy?
A: Matthew Coulson, CEO, explained that palm oil is more efficient in terms of yield per hectare, producing over three tons of oil per hectare annually, compared to soy's half a ton. This efficiency contributes to a smaller carbon footprint for palm oil.
Q: What is the impact of Indonesia's BD-50 biodiesel mandate on palm oil demand and export levies?
A: Matthew Coulson noted that while Indonesia aims to increase palm oil use in biodiesel, the actual implementation may lag behind targets. The export levies have remained stable, but any future changes are uncertain.
Q: What is the minimum acceptable return for new palm planting projects?
A: Luke Shaw, CFO, stated that while specific numbers are not disclosed, the company evaluates potential projects based on returns and broader capital allocation strategies.
Q: How does M P Evans plan to narrow the gap between share price and book value per share?
A: Peter Hadsley-Chaplin, Executive Chairman, emphasized the company's commitment to executing its strategy and communicating effectively with the market, which they hope will reflect in the share price.
Q: Why has the premium for sustainable oil reduced despite increased focus on sustainability?
A: Matthew Coulson suggested that market uncertainty due to new sustainability criteria, such as the EU's deforestation regulations, might be affecting premiums. He hopes clarity will improve the situation.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
