It’s almost five years since Indonesian palm oil producer, MP Evans, fought off a hostile bid.
The predator was a larger palm oil producer in Indonesia, prepared to pay £7.50 a share. MPE did not see this as a fair representation of the company’s value estimating it at about £11. At the time the bidder held about 10% of MPE’s shares, now they have more than 20%. Meanwhile MPE continues to expand production, build mills and produce palm oil sustainably. The price of palm oil has recovered to above $700 and the Net Asset Value of the shares should be at least £13 but they are trading at under £6. However, while the patient shareholders wait for the value of their investment to be realised there is a 3% dividend to cheer us up. Yesterday the company reported its results for the first half of this year – nothing to grumble about.
· 16% increase in first-half crop
· 31% increase of CPO produced, including fresh fruit bunches bought in
· 23% increase in average price of CPO cif Rotterdam to US$648 per tonne
· Cost of palm production maintained at US$385 per tonne
· Operating profit US$6.0 million (2019 US$1.0 million)
· Interim dividend maintained at 5.00 pence per share
· Agreement to dispose of 70 hectares of land in Malaysia for US$24.1 million (Post-period end)