Palm oil producer MP Evans has posted a surge in profits in 2021 as the palm oil sector went “from strength to strength” amid spiralling prices.

The company posted a record gross profit for the year of US$103.6m, treble the previous year’s result. Operating profit was up by 266% to $114.6m from $31.3m in 2020.

This was chiefly attributable to a further increase in crops and production and was supported by the strong palm-oil prices in the year.

Production rose as the group reaped the benefits from the maturing of its Indonesian oil-palm estates. Total crop processed were up 13% to 1.4m tonnes, while average mill-gate prices were up by 37% to $810 per tonne.

Prices for palm kernels also increased in 2021, reflecting stronger demand for palm-kernel oil and an ongoing shortage of coconut oil, with average prices of US$533 per tonne in the year, 69% higher than the US$316 per tonne in 2020.

Some 55% of its total output is currently certified sustainable pending formal certification of newer mills.

The surging profits saw the board is recommending a final dividend of 25p per share (17p per share last year), which represents an increase of 59% in the normal dividend for the year to a total of 35p, following a 24% increase in the previous year.

Since year-end the group has seen Current trading a seasonal 10% in downturn in crop in early 2022, although expects a recovery to long-term growth pathway expected as year progresses

There has been a significant increase in palm-oil price in same period, with average mill-gate US$1,050.

This strength in price partly attributable to restricted vegetable oil supply due to “tragic events in Ukraine”.

Exec chairman Peter Hadsley-Chaplin commented: “2021 has been an excellent year for the Group. Crop and production have risen further in line with our long-term strategic plans, whilst the palm-oil market has gone from strength to strength. Profit and cash generation have risen sharply, with retained profit of US$91.8m and the group’s net debt almost wholly eliminated by the year end.

“[The dividend increase] is a notable increase from the total of 22p paid in respect of the previous year, and marks another significant step in the group’s progressive dividend policy.”

The group’s shares are up 2.1% today to 982p and up by 55% year-on-year.

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