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(Sharecast News) - Sustainable palm oil producer MP Evans described a challenging market environment in its final results for 2023 on Tuesday, primarily due to a lower crude palm oil (CPO) price environment compared to the exceptionally high prices seen in 2022.
The AIM-traded firm said the average mill-gate price for group CPO dropped to $729 per tonne from $854 per tonne in the prior year.
As a result, revenue fell slightly to $307.4m from $326.9m year-on-year.
Operating profit fell to $75.3m from $101.6m, alongside a decrease in operating cash generation to $107m from $129.5m.
Earnings per share were reported at 78.1p, down from 108p in 2022.
Despite the financial downturn, the dividend for the year was hiked to 45p per share from 42.5p in 2022, with a proposed final dividend of 32.5p per share.
On the operational front, MP Evans said total crop processed increased 7% to 1.6 million tonnes, with 95% processed in group mills, all of which were operational throughout almost the entire year.
Notably, CPO production in group mills rose 22% to 362,100 tonnes, and by the end of 2023, all six group mills succeeded in producing certified output with regards to sustainability.
Sustainable CPO production saw a significant uptick, reaching 233,400 tonnes, up from 218,300 tonnes in 2022.
The year also saw an expansion in the group's agricultural footprint, with the acquisition of more than 10,000 planted hectares, while planting at the Musi Rawas estate surpassed the 10,000-hectare target.
"The group has made further significant progress in delivering its strategy in 2023," said chairman Peter Hadsley-Chaplin.
"We increased the amount of crop that was processed and, importantly, almost all that crop is processed in a group mill now that our sixth mill is up and running.
"We have secured a substantial increase in planted hectarage during the year, which will support our continuing growth, and we remain focused on opportunities for further sustainable development, both at our existing estates and as we continue to review additional acquisition prospects."
Hadsley-Chaplin said profit and cash generation remained strong, forming a "sound foundation" for the board's proposal to increase the final dividend for 2023 to 32.5p per share.
"This brings total dividends for the year up to 45p per share, another step forward in the group's long-standing progressive approach to shareholder returns."
At 1100 GMT, MP Evans Group shares were down 0.03% at 749.8p.
Reporting by Josh White for Sharecast.com.
