INTERIM For the six months ended 30 June 2021 - MP Evans Group PLC
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2021 Interim Report & Financial Statements (unaudited)
INTERIM
REPORT
For the six months ended 30 June 2021
M.P. Evans is a responsible producer of sustainable
Indonesian palm oil, striving for excellence in all the
Group’s operations, with a focus on continuing growth
and offering an increasing yield.
CONTENTS
1 Group highlights
4 Strategy update
5 The palm-oil market
6 Results for the period
10 Current trading and prospects
FINANCIAL STATEMENTS
12 Unaudited consolidated
income statement
13 Unaudited consolidated balance sheet
14 Unaudited statement of changes in
consolidated total equity
15 Unaudited consolidated
cash-flow statement
17 Notes to the interim statements
Young palms in the nursery at Musi Rawas
OTHER INFORMATION
20 Officers, professional advisers Cover image: Harvesting mature palms at the Bangka estate
and representatives
GROUP FINANCIAL HIGHLIGHTS
For the six months ended 30 June 2021
24% 29% 34%
INCREASE INCREASE INCREASE
IN GROUP CROP IN TOTAL CPO IN EX-MILL-GATE
PRODUCTION CPO PRICE
111% 13% 588%
INCREASE DECREASE INCREASE
IN SUSTAINABILITY IN COST OF PALM IN OPERATING
PREMIA PRODUCT PROFIT
2021 US$1.9 million 2021 US$335 per tonne 2021 US$41.3 million
2020 US$0.9 million 2020 US$385 per tonne 2020 US$6.0 million
572% 100% 21%
INCREASE INCREASE DECREASE
IN EARNINGS PER IN INTERIM DIVIDEND IN NET DEBT
SHARE PER SHARE
2021 38.3p 2021 10.0p 2021 US$67.7 million
2020 5.7p 2020 5.0p 2020 US$85.6 million
POST-PERIOD END
• Group’s fifth palm-oil mill commissioned at Bumi Mas
• Planting restarted at Musi Rawas
1
M.P. EVANS GROUP PLC
INTERIM REPORT 2021
GROUP
Gross profit was US$42.7 million The Group continued to be highly
in the period compared to US$8.9 cash generative, recording an
HIGHLIGHTS million in the first half of 2020,
whilst operating profit for the first
operating cash inflow before
tax and interest payments of
The Group achieved a half of the year was US$41.3 million US$33.0 million compared to
dramatic increase in compared to US$6.0 million in the US$11.2 million in 2020. The Group
profitability in the first same period in 2020. The total crop remains focused on completing the
half of 2021, as a result processed by the Group rose by 28% development of its existing estate
of significant increases to 702,300 tonnes, with increases in portfolio, and invested US$15.1 million
total crop observed at all the Group’s in capital expenditure during the
in both prices and
estates. Particularly notable were the period. Its most significant project
production.
doubling of crop at Musi Rawas as was its fifth oil-palm mill, a 60-tonne-
the palms mature at that developing per-hour processing facility at the
estate, and the 72% increase at Bumi Mas project in East Kalimantan,
Bangka as crops recovered from which began processing after the
a period of low rainfall that had end of the period, in August 2021.
affected production in 2020. Crude The Group was able, even after
palm oil (“CPO”) production rose capital investment and an increased
overall by 29% to 161,400 tonnes in dividend payment to shareholders,
the period, whilst CPO production to reduce net debt over the last
in Group mills increased by 30% to 12 months by US$17.9 million, both
125,900 tonnes, as a result of both as some of the Group’s scheme
rising crop and having the Group’s smallholders reach a point of being
Rahayu mill in operation throughout able to access independent finance
the first six months of 2021. and repay funding provided by the
Group, and as a reflection of the
CPO prices had increased significantly Group’s strong operating cash flows.
in the latter part of 2020 and
remained at high levels throughout COVID-19 UPDATE
the first half of this year. As The Group continues to monitor
previously reported by the Group, carefully the global Covid-19 situation,
the Indonesian government with a particular focus on the
introduced a change to the CPO locations in which it has operations.
export levy structure from December It remains the case that the pandemic
2020, the result of which was that has had relatively little effect on
the Group did not receive the full the Group’s business. Preventative
benefit of increased prices. However, measures remain in place, and the
mill-gate prices were still significantly Group adjusts its response based on
higher, up by 34% on the first half latest guidance, including the use of
of 2020. The Group continued to travel restrictions, access controls
keep tight control over its costs, and and remote working where possible.
in addition rising crops helped to A significant number of the Group’s
reduce unit costs. Overall, the workforce has received Covid-19
cost of production fell by US$50 per vaccinations, and vaccination rates
tonne in the first half of the year continue to increase. All estates and
to US$335 for CPO produced from mills operated without interruption
Group-controlled areas. during the period.
2
GROUP HIGHLIGHTS
DIVIDENDS
The board proposes to pay an interim dividend of 10p per share
(2020 – 5p per share), and considering the marked increase in crop
and production both shown in these results and projected for the
immediate future, and also in light of the prospects for the palm-oil
market, the board intends to recommend a total dividend of at least
30p per share in respect of 2021.
The board believes that the developing maturity of the Group’s
estates combined with increasing milling capacity form a basis for
strong cash flows, and hence the opportunity for further significant
increases in shareholder returns. The board intends to continue its
long-standing policy of at least maintaining, and where possible
increasing, the annual dividend.
BOARD CHANGES
On 31 July 2021, Tristan Price left the Group after fifteen years, the last
five of which were spent as chief executive. Throughout that time,
he played a central role in delivering the Group’s strategy. Amongst
his many achievements, Tristan led the development of the Group’s
policies on corporate governance and, notably, sustainability. The
board would like to thank him for his valuable contribution and
wishes him well in the future. Pending the appointment of a new
chief executive, Peter Hadsley-Chaplin has, as part of his function as
executive chairman, assumed the responsibilities previously managed
by Tristan.
On 1 August 2021, K Chandra Sekaran joined the board as an executive
director. Chandra joined the Group in 2008 as president director of
its Indonesian subsidiary P.T. Evans Indonesia. He is one of the most
respected individuals in the industry and has been responsible for
the on-the-ground success of the Group’s sustainable Indonesian
palm-oil expansion. The board is delighted to welcome Chandra as
an executive director, who brings with him a wealth of knowledge and
experience of the plantation industry.
3
M.P. EVANS GROUP PLC
INTERIM REPORT 2021
STRATEGY UPDATE
M.P. Evans is a responsible producer of sustainable Indonesian palm oil, striving for
excellence in all the Group’s operations, with a focus on continuing growth and offering
an increasing yield.
The Group provides schools, particularly on its The Group seeks to ensure that its new planting,
more remote estates, encouraging staff retention housing and roads are of the highest quality
Acting responsibly is at the heart of what we do and Excellence comes from investing for the long term.
who we are. We are active members of the RSPO, Our investment is not only in plantation assets
we do not deforest, and are good stewards of the but also in our employees, including in their
land we cultivate. We provide housing along with training and development. In this way, we are
medical, educational and leisure facilities for our consistently able to deliver both high yields and
workers and their families. high oil-extraction rates from our estates and mills.
Responsibility Excellence
Strategy
pillars
Growth Yield
GROWTH IN CROPS PROCESSED (‘000 TONNES) GROWTH IN DIVIDENDS (PENCE)
1,400 35
Normal dividends
Group
1,200 Scheme smallholders 30
Independent smallholders
1,000 25
800 20
600 15
400 10
200 5
0 0
2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021
* 10p interim dividend proposed for 2021 and intended total
dividend of at least 30p for the year
We seek to grow and develop the business. Growth
continues to come from the increasing maturity The Group’s investment strategy has already led
of the Group’s young estates, from the ongoing to a significant improvement in shareholder
focus on improving yields, and from the planned returns. In line with its growth programme, the
acquisition and sustainable development of new Group plans to deliver ever-increasing returns to
areas of land. shareholders.
4
THE PALM-OIL MARKET
THE PALM-OIL MARKET
During the first half of 2021 the cif other major vegetable oils, have 2020, and prices were maintained
Rotterdam palm-oil price continued been at low levels throughout the throughout the first half of 2021,
the rise that began in the second period. Production in Malaysia has averaging US$1,275, up by 78% from
half of 2020, reaching a high point been adversely affected by Covid-19 the same period in 2020. Prices for
of US$1,295 per tonne in May 2021, restrictions on foreign workers, the palm kernels sold by the Group
a price last seen a decade ago. The and yields per hectare have fallen also increased to US$491, up by
average price in the first half of the to multi-year lows. By contrast, 65%. Palm-kernel oil, and its main
year was US$1,115, 72% higher than Indonesia is expected to deliver a competitor, coconut oil, showed
the US$648 average in the same recovery in production in 2021. Like some declines in production both in
period of 2020. As referred to above, palm oil, soya-oil prices increased in 2020 and into early 2021, but both
owing to the significant increase the first half of 2021 from 2020 levels, started to show signs of recovery
in the Indonesian CPO export levy also reflecting concerns about low later in the first half, and this is
structure, the Group did not receive stocks, and about rainfall deficits in expected to continue into the
the full benefit of the higher prices. several parts of the USA which may remainder of the year.
The average mill-gate price received reduce yields later in the year.
by the Group in the first half of the
year was US$724 per tonne, 34% In a similar way to palm oil,
higher than in the same period in palm-kernel-oil prices had risen
2020. Stocks of palm oil, along with significantly in the second half of
CRUDE-PALM-OIL PRICE
US$ per tonne cif Rotterdam
1300
1200
1100
1000
900
800
700
600
500
400
2017 2018 2019 2020 2021
5
M.P. EVANS GROUP PLC
INTERIM REPORT 2021
RESULTS FOR THE PERIOD
CROPS 2020, and even more so at the In particular at Bangka, crop started
The total crop produced from the Group’s Bangka estate. There was a to increase in the second half of
Group’s own areas was 413,200 noticeable rebound in 2021 at both 2020 after the impact of the dry
tonnes, an increase of 24% from locations, particularly at Bangka spell, meaning that whilst crop
the 334,100 tonnes in the first half which achieved a 72% increase in in 2021 is expected to be
of 2020. As can be seen in the table crop. In addition, the Group has significantly higher than last year,
below, crop increased in all the invested heavily in recent years in the full-year percentage increase
Group’s estates, but increases were water management projects at its is expected to be lower than that
particularly strong at Musi Rawas, Kota Bangun estate, and the benefits for the first half.
Bangka and Kota Bangun. are being felt in crop increases, as
the Group enjoys year-round access The crop from scheme smallholders
At the Group’s young Musi Rawas to palms in some of the lower- was 120,900 tonnes in the first half
estate, crop doubled compared lying areas at the estate which had of 2021, a 43% increase. The increase
to the same period in 2020, as periodically been affected by water was proportionately higher than for
more hectares were brought into encroachment. Group-owned areas, reflecting the
maturity and the yield from already higher concentration of smallholder
mature hectares increased rapidly. At some locations, the rate of projects associated with the Group’s
As previously reported, a period of increase in crop experienced in the younger estates. In addition, the
RESULTS
dry weather in 2019 had adversely first half of the year may not be Group continued to purchase ffb
affected crop at Kota Bangun in sustained for the whole of 2021. from independent smallholders
FOR THE
CROPS SIX MONTHS ENDED INCREASE/ SIX MONTHS ENDED YEAR ENDED
30 JUNE 2021 (DECREASE) 30 JUNE 2020 31 DECEMBER 2020
TONNES % TONNES TONNES
PERIOD
Fresh fruit bunches
Own crops
Kota Bangun 104,200 21 86,300 186,400
Bangka 89,200 72 52,000 127,500
Pangkatan group 83,500 6 79,000 170,300
Bumi Mas 80,700 2 78,900 154,300
Musi Rawas 31,800 101 15,800 44,500
Simpang Kiri 23,800 8 22,100 41,300
413,200 24 334,100 724,300
Scheme-smallholder crops
Kota Bangun 45,500 17 38,900 81,500
Bangka 45,900 84 24,900 64,400
Bumi Mas 14,300 4 13,800 26,900
Musi Rawas 15,200 117 7,000 20,200
120,900 43 84,600 193,000
Independent-smallholder crop processed
Kota Bangun 107,300 100 53,600 142,500
Bangka 41,700 (29) 58,900 112,800
Pangkatan group 19,200 4 18,400 34,400
168,200 28 130,900 289,700
TOTAL CROP 702,300 28 549,600 1,207,000
6
RESULTS FOR THE PERIOD
PRODUCTION AND EXTRACTION RATES
CRUDE PALM OIL PALM KERNELS
YEAR YEAR
SIX MONTHS SIX MONTHS ENDED SIX MONTHS SIX MONTHS ENDED
ENDED INCREASE/ ENDED 31 DECEMBER ENDED INCREASE/ ENDED 31 DECEMBER
30 JUNE 2021 (DECREASE) 30 JUNE 2020 2020 30 JUNE 2021 (DECREASE) 30 JUNE 2020 2020
TONNES % TONNES TONNES TONNES % TONNES TONNES
PRODUCTION
Kota Bangun (G) 59,900 37 43,600 96,500 11,400 33 8,600 19,300
Bangka (G) 42,800 36 31,400 69,600 10,100 31 7,700 16,900
Pangkatan group (G) 23,200 5 22,000 46,100 5,400 6 5,100 10,800
125,900 30 97,000 212,200 26,900 26 21,400 47,000
Bumi Mas (TP) 20,600 12 18,400 37,400 4,500 2 4,400 8,600
Musi Rawas (TP) 9,600 109 4,600 13,200 2,200 120 1,000 2,900
Simpang Kiri (TP) 5,300 10 4,800 8,900 1,100 10 1,000 1,900
35,500 28 27,800 59,500 7,800 22 6,400 13,400
161,400 29 124,800 271,700 34,700 25 27,800 60,400
EXTRACTION RATES % % % % % % % %
Kota Bangun –
Bumi Permai (G) 23.9 (2) 24.4 23.8 4.7 (2) 4.8 4.9
Kota Bangun –
Rahayu (G) 22.4 21.6 4.1 4.0
Bangka (G) 24.2 5 23.1 22.9 5.7 — 5.7 5.5
Pangkatan group (G) 22.6 — 22.6 22.5 5.3 2 5.2 5.3
23.5 — 23.5 23.1 5.0 (4) 5.2 5.1
Bumi Mas (TP) 21.7 9 19.9 20.7 4.7 (2) 4.8 4.7
Musi Rawas (TP) 20.5 1 20.3 20.4 4.6 — 4.6 4.6
Simpang Kiri (TP) 22.5 5 21.5 21.5 4.5 — 4.5 4.5
G = Group mills, TP = third-party mills
to make profitable use of spare Taking all the above into account, kernels in the first six months of
capacity in its palm-oil mills. In the the total crop processed increased 2021, increases of 29% and 25% on
six months to June 2021, purchases by 28% to 702,300. the previous year respectively. The
from independent smallholders oil-extraction rate achieved by the
increased to 168,200 tonnes, within Separately, crop at the Group’s Bumi Permai mill at Kota Bangun
which there was a 100% increase in 38%-owned associated-company has fallen slightly from that achieved
purchases at the Kota Bangun estate estate, Kerasaan, was 27,600 tonnes in the same period last year, but is
as the Group’s Rahayu mill, having in the first half of 2021, a little lower up by a small amount on the full
opened in the second half of 2020, than the 29,400 in the first six year rate for 2020. Following some
was operational throughout the months of the previous year. technical challenges, this mill remains
period. There was a reduction in the an area of management focus as
independent ffb purchased at Bangka PRODUCTION an opportunity for increasing rates.
as spare capacity reduced following The Group produced 161,400 tonnes The Rahayu mill, whilst not having a
crop increases. of CPO and 34,700 tonnes of palm comparator for the same period in
7
M.P. EVANS GROUP PLC
INTERIM REPORT 2021
2020, has increased extraction rates scheme-smallholder crop. Since the increase in the export levy applied to
since its first period of operation in completion of the mill at Bumi Mas, a CPO announced in December 2020 by
the second half of last year, and is key priority for the Group is building the Indonesian government. Where
achieving good levels given that its its sixth palm-oil mill at Musi Rawas, previously applied at a flat rate of
focus has been on ffb bought from scheduled for completion around the US$55 per tonne, the government
independent smallholders, which is of end of 2022. introduced an increasing charge
a lower quality than that from Group up to a maximum of US$255 per
or scheme-smallholder areas. The Of the Group’s production, 54% tonne at CPO prices over US$1,000.
Bangka mill has been able to increase is certified sustainable palm oil. As a result of the higher export levy,
its oil-extraction rate to 24.2% as Certification is awarded to mills along with the existing export tax
the proportion of independent ffb rather than for the crop, and even which also increases at higher prices,
processed has decreased. Overall after new mills are opened there is a the average mill-gate price in the
efficiency in Group mills has necessary process of demonstrating first half of the year was US$724.
remained high and the average oil- compliance with RSPO requirements However, this was still a significant
extraction rate in Group mills has for a period of time, followed by 34% increase on the same period in
remained consistent at 23.5%. an independent audit, before 2020. As part of this price, the Group
certification is received. As a result, received an average of US$10 per
During the first half of the year, the certification may be awarded 1-2 tonne sustainability premium on
Group was able to agree increases to years after commissioning. The Group sale of CPO, up by US$2 on the
the rate of extraction built into the remains committed to increasing previous year.
contracts for selling ffb to local mills significantly its milling capacity,
in those locations where the Group processing ffb in its own mills, and For palm kernels, the Group received
has not yet built its own processing achieving certification for each one. US$491 per tonne in the first half of
facilities. As before, to reflect the In the meantime, all the Group’s crop the year, a significant 65% recovery
substance of these arrangements, and that of its associated scheme in the price compared to the US$298
oil produced from these estates is smallholders is produced in full received in the same period in 2020,
included in CPO production. The accordance with RSPO standards. consistent with the increase in
increase in rates was particularly Rotterdam CPO prices. Within this, the
marked at Bumi Mas where the MILL-GATE PRICES Group received an average of US$26
oil-extraction rate rose from 19.9% CPO prices began to rise sharply in per tonne sustainability premium on
to 21.7%, acknowledging the high the latter part of 2020, and remained palm kernels, compared to US$9 in
quality of the Group’s crop. Since the at high levels throughout the first half 2020. Premia were significantly higher,
end of the period, in August 2021, of 2021, with an average cif Rotterdam partly in line with palm-kernel prices,
the Group has commissioned its own price of US$1,115, 72% higher than the but also as demand for products
palm-oil mill at Bumi Mas, and is now same period in 2020. The increase containing sustainably sourced
processing, and starting to maximise did not translate fully into a rise palm-kernel oil, including cosmetics,
returns from, both Group and in the mill-gate price following an continued to increase.
AVERAGE SELLING PRICES SIX MONTHS ENDED SIX MONTHS ENDED YEAR ENDED
30 JUNE 2021 30 JUNE 2020 31 DECEMBER 2020
US$ US$ US$
CPO (cif Rotterdam) 1,115 648 716
CPO – Group ex mill gate 724 541 591
Palm-kernel oil 1,275 718 796
Palm kernels – Group ex mill gate 491 298 316
8RESULTS FOR THE PERIOD
COSTS PLANTING joint venture. All sale conditions
The cost per tonne of palm product Following the announcement of were met before 30 June 2021, other
(CPO and palm kernels) produced changes to RSPO rules, the Group than the finalisation of bank finance
from the Group’s own areas was paused planting at its Musi Rawas by Bertam Properties, which was
US$335 in the first half of the year, estate in late 2019, and subsequently delayed by Covid-19 restrictions in
US$50 lower than in the first half provided all necessary documentary Malaysia, but is expected to occur
of 2020. The decrease can primarily evidence to demonstrate compliance before the end of October. Total
be attributed to the effect of with the updated requirements. The sale consideration is RM99.9 million
processing higher volumes of crop Group received clearance from the (US$24.1 million), and the transaction
compared to the previous year, but RSPO at the end of July 2021 that will be taxed at the 10% Real Property
the Group also benefitted from a planting could restart. There are 8,000 Gains Tax rate in Malaysia.
one-off non-cash credit of planted hectares at Musi Rawas and,
US$2.1 million in the first half of based on the clearance now received, MALAYSIAN ASSOCIATE:
the year due to a change in the Group remains confident of BERTAM PROPERTIES
Indonesian pension legislation, being able to reach a total of at least Bertam Properties achieved a profit
further reducing costs. The effect 10,000 hectares. Elsewhere in the first in the first half of the year, of which
of this on cost per tonne will be half of 2021, the Group undertook a the Group’s share was US$0.2 million,
diluted in the 2021 full year results. small amount of new planting and compared to breaking even in the
replanting totalling 126 hectares. first half of 2020. Whilst conditions
The cost of purchasing ffb from in the Malaysian property market
both scheme smallholders NEW LAND remain challenging, Bertam Properties
and independent smallholders In line with its strategy, the Group is continues to show resilience, and
increased significantly in the first continuing to look for opportunities to perform well within its location
half of 2021 compared to 2020 as to acquire additional land close to and market.
purchase costs are linked to CPO its existing estates. It is currently
prices. As a result, the Group’s pursuing potential acquisitions near RESULT
total cost per tonne at its mills in both Kota Bangun and Simpang Kiri. The Group recorded revenue of
the first half of 2021, including ffb Land acquisition close to Simpang Kiri US$128.0 million in the first six
from all sources, was US$437 (2020 may subsequently justify developing months of 2021, up by 69% on
US$410) compared to an average a mill to process the Group’s the same period in 2020 as both
ex-mill-gate price in the same ffb, further increasing returns to prices and production increased
period of US$724 (2020 US$541). shareholders. In North Sumatra, the significantly. Gross profit increased
Total gross profit was US$37.3million Group is supporting the formation by a factor of almost five to
(2020 US$10.7 million) from those of independent smallholder co- US$42.7 million whilst operating
locations where the Group has its operatives which will add another profit increased more than sixfold
own milling facilities. source of ffb to the Pangkatan mill. to US$41.3 million as costs were well
At the end of June 2021, independent controlled and margins increased.
Performance at the Group locations smallholder co-operatives covering Whilst slightly lower, finance costs
which do not yet have their own 883 hectares had been formed. were similar to the same period
mills continues to improve as last year at US$1.4 million. After
a result of higher prices, better MALAYSIA: SALE OF interest, tax, and recognising its
extraction rates agreed with outside BERTAM ESTATE share of the profits of associated
mills, and improving yields and As reported previously, the Group companies, the Group recorded a
efficiency. For the first half of 2021, reached an agreement in 2020 to sell profit of US$30.4 million in the first
those locations achieved a gross the wholly owned 70-hectare Malaysian six months of the year, US$26.1 million
profit of US$5.5 million compared to estate to Bertam Properties Sdn. higher than in the previous period.
a gross loss of US$1.8 million in the Berhad (“Bertam Properties”), the Earnings per share were 38.3 pence.
first half of 2020. Group’s 40%-held Malaysian property
9M.P. EVANS GROUP PLC
INTERIM REPORT 2021
1
CURRENT TRADING AND PROSPECTS 1 SIMPANG KIRI
Mature oil-palm estate in the
Group crops continued to follow a similar pattern in the two months to August 2021 province of Aceh, near the
to that observed in the first half of the year, although during these two months border with North Sumatra,
which was acquired in the
there was a significant increase in crop at the Group’s Kota Bangun estate, reflecting
early 1980s. Ffb are processed
the relative timings of high and low cropping periods. The total crop processed in
in a nearby third-party mill.
the two months was 227,500 tonnes, bringing the total for the year to date to
929,800 tonnes as shown in the following table: 2,600 hectares
Group planted area:
EIGHT MONTHS EIGHT MONTHS 2,400 hectares
ENDED ENDED
31 AUG 2021 INCREASE 31 AUG 2020
TONNES % TONNES
Own crops 555,900 24 449,300
Scheme-smallholder crops 158,500 43 110,800 2
Independent-smallholder crop processed 215,400 30 165,800
929,800 28 725,900 2 KERASAAN
Mature (ex-rubber) oil-palm
The Group’s fifth palm-oil mill began operation at Bumi Mas in August, and CPO is estate near the town of
Pematangsiantar in North
now being transferred to the recently completed bulking facility on the estate, ready
Sumatra. Ffb are processed
for the first Group dispatch from that location. Having completed construction, the
in the neighbouring Bukit
Bumi Mas mill is being monitored by mill and engineering management to ensure Marajah mill, owned by the
that efficiency and extraction rates can be maximised. In addition, the Group’s SIPEF Group - also the
engineering team has completed the majority of the tendering for the Group’s majority shareholder in
new palm-oil mill at Musi Rawas. Groundworks are already well advanced, and Kerasaan.
construction is expected to start during the final quarter of 2021. Planted area: 2,300 hectares
At the start of July, the cif Rotterdam palm-oil price was US$1,060 per tonne, and Group minority share: 38%
increased during the two months to the end of August, ending the period at
US$1,235. Furthermore, the Indonesian government announced a reduction in the
export levy applied to CPO, taking effect from 2 July 2021, which reduced the highest
levy from US$255 per tonne to US$175. A combination of increasing prices and the
levy reduction helped to increase ex-mill-gate prices in the two months to August, 3
resulting in an increase in the Group’s average mill-gate price from the US$724 in the
first six months of the year to US$738 for the first eight months of the year. 3 PANGKATAN GROUP
Grouping of three estates
The rollout of the Covid-19 vaccination programme is continuing in Indonesia and (Pangkatan, Bilah, Sennah)
gathering momentum. By the end of August, over 40% of the Group’s workforce whose fruit is processed in
had received at least one vaccination, and this percentage is expected to increase a 40-tonne mill built on
significantly by the year end. All the Group’s mills and estates are continuing to Pangkatan in 2005. Combination
of a long-established, mature
operate without interruption.
(ex-rubber) oil-palm estate
As indicated above, CPO prices remained strong in the first two months of the (Pangkatan), and land acquired
second half of 2021 and given the continued strength evident in the forward markets, or planted over the last
30 years (Bilah and Sennah).
the full-year average cif Rotterdam price for the year is likely to be at a multi-year
high. Looking into 2022, much depends on the extent to which production in Malaysia 7,500 hectares
recovers if and when foreign labour restrictions are relaxed as Covid-19 is brought Group planted area:
under control. Palm oil is also dependent on developments in the wider vegetable-oil 7,000 hectares
market, in particular the soya-oil market which is likely to continue to be influenced
by weather patterns in the Americas. In addition, with regard to input costs, there
may be some upward pressure arising from fertiliser and other items. However,
production increases will help to mitigate against any increases in unit costs.
Irrespective of developments in the wider market, the board is of the view that a
combination of rising yields, increasing milling capacity and a focus on controlling
costs puts the Group in a strong position to generate rising cash flows and returns
for shareholders, and that the outlook remains positive.
10RESULTS FOR THE PERIOD
8 7
8 BERTAM PROPERTIES AND BERTAM 7 BUMI MAS
ESTATE Located in East Kalimantan, north-east
This land was previously the Group’s Bertam of Sangatta next to the Manubar River.
Estate, most of which was sold into Bertam The land was acquired in 2017. It was
Properties, a joint venture with two Malaysian largely planted in 2012-14, with the first
partners. Starting in 1992, the area has been harvesting taking place during 2015.
developed into a new town. The remaining A 60-tonne mill was commissioned in
developable land amounts to 179 hectares. In August 2021.
2020, the Group signed a conditional agreement
to sell Bertam Estate to Bertam Properties. 9,000 hectares
Group planted area: 7,500 hectares
Bertam Properties: 280 hectares
Scheme smallholder planted area:
(Group minority share: 40%)
1,400 hectares
Bertam Estate: 70 hectares
8
Malaysia
1
Medan
2
Kuala Lumpur
3 Singapore
Sumatra 7
6
Kalimantan Samarinda
Bangka
5 Island
4
Jakarta
Indonesia
4 MUSI RAWAS 5 BANGKA 6 KOTA BANGUN ESTATES
Located in South Sumatra province Located on the island of Bangka, Located in East Kalimantan,
near the town of Lubuk Linggau, the land was acquired in 2005. close to Kota Bangun and next
the project was started in 2012. The first areas planted started to the Mahakam River, the land
Much had previously been production during 2009. A 45-tonne was acquired in 2006. The first
planted with smallholders’ rubber, mill with composting facility and areas planted started production
which had been abandoned. The biogas plant was commissioned during 2010; a 60-tonne mill
Group began planting oil palm at in May 2016 and extended to 60 was commissioned in December
the end of 2014, and harvesting tonnes in 2019. 2012, and a 40-tonne mill was
started in 2017. commissioned in September 2020.
12,000 hectares
10,000 hectares Group planted area: 6,100 hectares 16,000 hectares
Group planted area: 5,500 hectares Scheme smallholder planted area: Group planted area: 10,500 hectares
Scheme smallholder planted area: 3,900 hectares Scheme smallholder planted area:
2,500 hectares 4,600 hectares
4 5 6
11M.P. EVANS GROUP PLC
INTERIM REPORT 2021
UNAUDITED CONS0LIDATED INCOME STATEMENT
For the six months ended 30 June 2021
SIX MONTHS SIX MONTHS YEAR
ENDED ENDED ENDED
30 JUNE 30 JUNE 31 DECEMBER
2021 2020 2020
Note US$’000 US$’000 US$’000
Continuing operations
Revenue 3 128,033 75,894 174,510
Cost of sales* (85,302) (67,023) (139,755)
Gross profit 3 42,731 8,871 34,755
Gain on biological assets 762 (647) 682
Foreign-exchange losses (570) (799) (1,068)
Other administrative expenses (2,350) (2,207) (4,587)
Other income 718 824 1,539
Operating profit 41,291 6,042 31,321
Finance income 244 308 527
Finance costs (1,445) (1,928) (3,408)
Profit before taxation 40,090 4,422 28,440
Tax on profit on ordinary activities (9,656) (749) (7,692)
Profit after tax 30,434 3,673 20,748
Share of associated companies’ profit after tax 3 774 635 1,421
Profit for the period 31,208 4,308 22,169
Attributable to:
Owners of M.P. Evans Group PLC 28,857 3,896 20,371
Non-controlling interests 2,351 412 1,798
31,208 4,308 22,169
US cents US cents US cents
Continuing operations
Basic earnings per 10p share 53.0 7.2 37.4
Diluted earnings per 10p share 52.8 7.1 37.3
Pence Pence Pence
Basic earnings per 10p share
Continuing operations 38.3 5.7 29.2
*includes a US$2.1 million past service credit in 2021 relating to past service liabilities in Indonesia
12FINANCIAL STATEMENTS
UNAUDITED CONS0LIDATED BALANCE SHEET
As at 30 June 2021
30 JUNE 30 JUNE 31 DECEMBER
2021 2020 2020
Note US$’000 US$’000 US$’000
Non-current assets
Goodwill 11,767 11,767 11,767
Other intangible assets 1,298 1,453 1,381
Property, plant and equipment 394,981 376,199 390,642
Investments in associates 21,123 21,272 22,154
Investments 65 63 67
Deferred-tax asset 4,129 4,985 5,046
Trade and other receivables 11,743 11,555 10,917
445,106 427,294 441,974
Current assets
Biological assets 3,511 1,419 2,749
Inventories 14,846 12,359 11,617
Trade and other receivables 45,093 44,970 48,620
Current-tax asset 3,600 3,430 3,968
Current-asset investments 324 329 334
Cash and cash equivalents 29,737 11,822 27,222
97,111 74,329 94,510
Total assets 542,217 501,623 536,484
Current liabilities
Borrowings 39,743 37,426 39,605
Trade and other payables 22,119 21,374 26,039
Current-tax liabilities 6,946 715 6,003
68,808 59,515 71,647
Net current assets 28,303 14,814 22,863
Non-current liabilities
Borrowings 58,007 60,296 66,079
Trade and other payables — 151 38
Deferred-tax liability 11,371 10,173 10,529
Retirement-benefit obligations 12,086 10,091 14,051
81,464 80,711 90,697
Total liabilities 150,272 140,226 162,344
Net assets 391,945 361,397 374,140
Equity
Share capital 5 9,204 9,204 9,204
Other reserves 54,297 55,514 55,090
Retained earnings 316,343 287,305 300,117
Equity attributable to the owners of M.P. Evans Group PLC 379,844 352,023 364,411
Non-controlling interests 12,101 9,374 9,729
Total equity 391,945 361,397 374,140
13M.P. EVANS GROUP PLC
INTERIM REPORT 2021
UNAUDITED STATEMENT OF CHANGES IN
CONS0LIDATED TOTAL EQUITY
For the six months ended 30 June 2021
SIX MONTHS SIX MONTHS YEAR
ENDED ENDED ENDED
30 JUNE 30 JUNE 31 DECEMBER
2021 2020 2020
Note US$’000 US$’000 US$’000
Profit for the period 31,208 4,308 22,169
Other comprehensive expense for the period (356) (979) (2,189)
Total comprehensive income for the period 30,852 3,329 19,980
Issue of share capital — 23 —
Share buy-backs — (1,155) (1,155)
Dividends paid 4 (13,150) (8,594) (12,980)
Credit to equity for equity-settled share-based payments 103 108 609
Transactions with owners (13,047) (9,618) (13,526)
At 1 January 374,140 367,686 367,686
Balance at period end 391,945 361,397 374,140
14FINANCIAL STATEMENTS
UNAUDITED CONS0LIDATED CASH-FLOW STATEMENT
For the six months ended 30 June 2021
SIX MONTHS SIX MONTHS YEAR
ENDED ENDED ENDED
30 JUNE 30 JUNE 31 DECEMBER
2021 2020 2020
Note US$’000 US$’000 US$’000
Net cash generated by operating activities 6 24,954 4,514 39,598
Investing activities
Purchase of property, plant and equipment (15,084) (16,459) (41,409)
Purchase of intangible assets — (102) (113)
Interest received 244 308 108
Decrease in bank deposits treated as current asset
investments 10 831 826
Decrease in receivables from smallholder co-operatives 13,013 3,172 3,886
Proceeds on disposal of property, plant and equipment 516 206 732
Net cash used by investing activities (1,301) (12,044) (35,970)
Financing activities
New borrowings — 10,000 24,581
Repayment of borrowings (7,934) (6,752) (13,307)
Lease liability payments (108) (104) (209)
Dividends paid to Company shareholders (13,150) (8,594) (12,105)
Purchase of non-controlling interests — — (89)
Buy-back of Company shares — (1,155) (1,155)
Net cash used by financing activities (21,192) (6,605) (2,284)
Net increase/(decrease) in cash and cash equivalents 2,461 (14,135) 1,344
Cash and cash equivalents at 1 January 27,222 25,947 25,947
Effect of foreign-exchange rates on cash and cash
equivalents 54 10 (69)
Net cash and cash equivalents at period end 29,737 11,822 27,222
15M.P. EVANS GROUP PLC
INTERIM REPORT 2021
New jetty and bulking facility at Bumi Mas estate
16NOTES TO THE INTERIM STATEMENTS
For the six months ended 30 June 2021
1 General information
The financial information for the six-month periods ended 30 June 2021 and 2020 has been neither audited nor reviewed by
the Group’s auditors and does not constitute statutory accounts within the meaning of section 434 of the Companies Act 2006.
The financial information for the year ended 31 December 2020 is abridged from the statutory accounts. The 31 December 2020
statutory accounts have been reported on by the Group’s auditors for that year, BDO LLP, and have been filed with the Registrar of
Companies. The report of the auditors thereon was unqualified and did not contain a statement under section 498(2) or (3) of the
Companies Act 2006, nor did it contain any matters to which the auditors drew attention without qualifying their audit report.
2 Accounting policies
The consolidated financial results have been prepared in accordance with International Financial Reporting Standards (IFRS and
IFRIC interpretations) issued by the International Accounting Standards Board (IASB), and with those parts of the Companies Act
2006 applicable to companies preparing accounts under IFRS.
The accounting policies of the Group follow those set out in the annual financial statements at 31 December 2020. The Group has
made a number of critical accounting judgements and key estimates in the preparation of this interim report, and they remain
consistent with those set out in note 3(r) to the 2020 annual financial statements.
3 Segment information
The Group’s reportable segments are distinguished by location and product: Indonesian oil-palm plantation products and
Malaysian property development.
PLANTATION PROPERTY
INDONESIA MALAYSIA OTHER TOTAL
US$’000 US$’000 US$’000 US$’000
6 months ended 30 June 2021
Revenue 127,984 — 49 128,033
Gross profit/(loss) 42,753 — (22) 42,731
Share of associated companies’ profit after tax 565 209 — 774
6 months ended 30 June 2020
Revenue 75,863 — 31 75,894
Gross profit/(loss) 8,915 — (44) 8,871
Share of associated companies’ profit after tax 592 43 — 635
Year ended 31 December 2020
Revenue 174,458 — 52 174,510
Gross profit/(loss) 34,851 — (96) 34,755
Share of associated companies’ profit after tax 1,070 351 — 1,421
4 Dividends
SIX MONTHS SIX MONTHS YEAR
ENDED ENDED ENDED
30 JUNE 30 JUNE 31 DECEMBER
2021 2020 2020
US$’000 US$’000 US$’000
2019 final dividend – 12.75p per 10p share — 8,594 8,594
2020 interim dividend – 5.00p per 10p share — — 3,511
2020 final dividend – 17.00p per 10p share 13,150 — —
13,150 8,594 12,105
Subsequent to 30 June 2021, the board has declared an interim dividend of 10p per 10p share. The dividend will be paid on or after
5 November 2021 to those shareholders on the register at the close of business on 15 October 2021.
17M.P. EVANS GROUP PLC
INTERIM REPORT 2021
NOTES TO THE INTERIM STATEMENTS continued
5 Share capital
30 JUNE 30 JUNE 31 DECEMBER 30 JUNE 30 JUNE 31 DECEMBER
2021 2020 2020 2021 2020 2020
NUMBER NUMBER NUMBER US$’000 US$’000 US$’000
Shares of 10p each
At 1 January 54,490,253 54,461,220 54,461,220 9,204 9,200 9,200
Issued — 182,320 182,320 — 23 23
Redeemed — (153,287) (153,287) — (19) (19)
At period end 54,490,253 54,490,253 54,490,253 9,204 9,204 9,204
6 Analysis of movements in cash flow
SIX MONTHS SIX MONTHS YEAR
ENDED ENDED ENDED
30 JUNE 30 JUNE 31 DECEMBER
2021 2020 2020
US$’000 US$’000 US$’000
Operating profit 41,291 6,042 31,321
Biological (gain)/loss (762) 647 (682)
Disposal of property, plant and equipment 96 194 1,008
Release of deferred profit (23) (21) (58)
Depreciation of property, plant and equipment 10,077 8,580 17,776
Amortisation of intangible assets 83 82 165
Retirement-benefit obligation (1,862) 690 2,148
Share-based payments 241 108 609
Dividends from associated companies 1,216 — 1,646
Operating cash flows before movements in working capital 50,357 16,322 53,933
Increase in inventories (3,229) (1,287) (545)
Increase in receivables (10,312) (3,025) (7,574)
(Decrease)/increase in payables (3,832) (851) 3,806
Cash generated by operating activities 32,984 11,159 49,620
Income tax paid (6,585) (4,717) (6,614)
Interest paid (1,445) (1,928) (3,408)
Net cash generated by operating activities 24,954 4,514 39,598
18NOTES TO THE INTERIM STATEMENTS
7 Exchange rates
30 JUNE 30 JUNE 31 DECEMBER
2021 2020 2020
US$1=Indonesian Rupiah
Average 14,273 14,579 14,541
Period end 14,500 14,285 14,050
US$1=Malaysian Ringgit
Average 4.10 4.25 4.20
Period end 4.15 4.29 4.02
£1=US Dollar
Average 1.38 1.26 1.28
Period end 1.38 1.24 1.37
19M.P. EVANS GROUP PLC
INTERIM REPORT 2021
OFFICERS, PROFESSIONAL ADVISERS & REPRESENTATIVES
SECRETARY AND REGISTERED OFFICE
EXECUTIVE DIRECTORS Katya Merrick
3 Clanricarde Gardens, Tunbridge Wells, Kent TN1 1HQ
Peter E Hadsley-Chaplin,
Company number: 1555042
MA MBA
t +44 (0)1892 516 333
Executive chairman
e katya.merrick@mpevans.co.uk
Matthew H Coulson, BA FCA w www.mpevans.co.uk
Finance director
INDONESIAN REGIONAL OFFICE
K Chandra Sekaran, BSc (UPM)
PT Evans Indonesia
Executive director, Asia
Gedung Graha Aktiva, Suite 1001, Jl HR Rasuna Said Blok X-1 Kav 03,
Jakarta 12950
NON-EXECUTIVE DIRECTORS
MANAGING AGENT IN MALAYSIA
Jock M Green-Armytage,
Straits Estates Sdn. Berhad
BA MBA *†
Loke Mansion, 147 Lorong Kelawei, 10250 Penang
Senior independent, chair
of audit and remuneration
INDEPENDENT AUDITORS
committee
BDO LLP
Bruce C J Tozer, BSc MSc MBA *† 2 City Place, Beehive Ring Road, Gatwick, West Sussex RH6 0PA
Independent
REGISTRARS
Philip A Fletcher, FCA *
Computershare Investor Services PLC
Darian M McBain, BE MSc PhD *† The Pavilions, Bridgwater Road, Bristol BS99 6ZZ
Independent t +44 (0)3707 071 176
w www.computershare.com
* Member of the audit committee
† Member of the remuneration
committee PRINCIPAL BANKERS
OCBC Bank 18 Jalan Tun Perak, 50050 Kuala Lumpur, Malaysia
AmBank Group 55 Jalan Raja Chulan, 50200 Kuala Lumpur, Malaysia
NatWest 89 Mount Pleasant Road, Tunbridge Wells, Kent TN1 1QJ
NOMINATED ADVISER AND JOINT BROKER
Peel Hunt LLP
7th Floor, 100 Liverpool Street, London, EC2M 2AT
JOINT BROKER
finnCap
1 Bartholomew Close, London, EC1A 7BL
SOLICITORS
Hogan Lovells International LLP
Atlantic House, 50 Holborn Viaduct, London EC1A 2FG
PUBLIC RELATIONS ADVISERS
Hudson Sandler LLP
25 Charterhouse Square, London EC1M 6AE
20New palm-oil mill and housing at Bumi Mas estate
3 Clanricarde Gardens Tunbridge Wells Kent TN1 1HQ United Kingdom t +44 (0)1892 516 333 e enquiries@mpevans.co.uk w mpevans.co.uk
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