MP Evans buoyed by firm palm oil prices and strong harvest

MP Evans Group PLC anticipates full-year 2025 revenue and profit to surpass previous forecasts, driven by sustained strong crude palm oil (CPO) and palm kernel (PK) prices, which averaged US$869/tonne and US$756/tonne respectively through October. The Indonesia-focused sustainable palm oil producer also benefited from an 8% year-on-year increase in harvested crop from managed estates and associated smallholders, alongside disciplined cost management through a 40% reduction in independent supplier purchases. This robust operational and market performance has also enabled the company to clear US$20.9 million in outstanding loans, underscoring strong cash generation.

Analysis

MP Evans Group PLC (AIM:MPE) anticipates 2025 full-year revenue and profit to surpass previous forecasts, driven by robust commodity prices and strong operational performance. Crude palm oil (CPO) prices averaged US$869/tonne at October's end, with palm kernel (PK) prices strengthening to US$756/tonne, both sustaining H1 gains. November tenders for CPO and PK remain firm at US$850/tonne and US$780/tonne respectively, indicating stable market demand.

The company reported an 8% year-on-year increase in harvested crop from managed estates and smallholders for the ten months to October, building on a 9% H1 rise. Concurrently, MPE reduced purchases from independent suppliers by 40%, demonstrating disciplined cost management and a focus on sustainability. This operational efficiency, combined with strong pricing, has resulted in solid cash generation, enabling the repayment of US$20.9 million in outstanding loans.

This combination of higher own-crop production, favorable commodity pricing, and stringent cost controls positions MPE for enhanced profitability and financial resilience. The clearing of all outstanding loans significantly de-risks the balance sheet and improves financial flexibility. This positive guidance, ahead of the January 2026 full-year update, suggests a strong fundamental trajectory for the Indonesia-focused producer.

Key Decisions for Investors

• Investors should monitor the upcoming full-year update in January 2026 for detailed crop, production, and pricing data to confirm the sustained positive trajectory.
• Given the strong cash generation, debt reduction, and positive guidance, consider MPE's improved financial health and potential for future capital allocation decisions.
• Evaluate the stability of palm oil and palm kernel prices, as well as the company's continued ability to manage costs and increase own-crop production, as key drivers for sustained performance.