Shares in MP Evans (LON:MPE) tested new all-time highs after the sustainable Indonesian palm oil producer posted record H1 results. The AIM-listed food producer also raised the dividend by a bumper 39% to 25p a share.
And investors welcomed the news strong pricing for both crude palm oil (CPO) and palm kernels (PK), the group’s secondary product, has persisted into Q3.
The high oil price, exacerbated by Middle East tensions and other geopolitical events, is supporting robust demand for alternative fuels such as palm oil. Meanwhile, efforts by the Indonesian and other governments to promote demand for the commodity is helping prices.
Harvesting record results
MP Evans’ results for the six months to June 2026 revealed a 25% increase in pre-tax profits to US$78.6 million on a 9% rise in revenue to $196.3 million. Earnings per share increased by 21% to a record 86.5p.
This tasty performance was mainly driven by higher volumes of CPO processed, supported by a higher percentage of own crop milled.
MP Evans also benefited from a continuation of strong pricing. Encouragingly, cropping levels continued to be higher year-on-year in July and August.
Pricing remains strong
During H1, the average CPO mill-gate price achieved rose by 0.6% to $873 per tonne, versus $868 per tonne last year.
| Year to December | FY26E | FY27E | FY28E |
| Revenue ($m) | 381.2 | 347.5 | 348.5 |
| Adjusted pre-tax profit ($m) | 150.6 | 125.6 | 124.6 |
| DPS (c) | 93.1 | 96.4 | 99.8 |
Source: Cavendish estimates
Current CPO mill-gate pricing since the period end has remained firm and the eight-month average price achieved was $868 per tonne. In addition, the PK price has remained strong for a second year.
What did the chair say?
‘The first half of 2026 has been particularly encouraging for the group, with increases in both crop harvested and extraction rates in our mills,’ enthused chairman Peter Hadsley-Chaplin. ‘Our focus on efficiency helps us to push down unit costs, and our gross margin has improved again, leading to another increase in earnings.’
Hadsley-Chaplin added: ‘Our recent land purchase provides us with further opportunities to increase crop into the medium and longer term.’
Investor appetite for the MP Evans story is building. The group has cultivated tasty share price gains year-to-date, despite a dip caused by the Indonesian Government’s unexpected announcements on a revised commodity export tax regime.
We have a positive view on the company, which has enjoyed an exceptional few years for profitability. MP Evans is putting its free cash flow to good use via acquisitions. And its $113.5 million net cash pile gives management the optionality to complete further earnings-enhancing acquisitions and/or increase dividends and buybacks.
Following the results, Cavendish upgraded its FY26 EPS estimate by 12.5% to $230.2 cents and its dividend forecast by 17% to 70p. ‘The strategic shift to increasing the mix of owned fruit as a percentage of CPO production is paying dividends,’ commented the broker.
While the pricing backdrop remains favourable, investors should be aware that this year’s El Nino weather event is expected to be the most intense in over a century. El Nino is likely to negatively impact palm crops yields six-to twelve months after the event. However, demand for palm oil shouldn’t change, which means mill-gate price increases should compensate for the decline.
