MP Evan’s crop and production update was in line with overall expectations notes broker Cavendish.
Much stronger second-half production and higher purchases of independent crops helped to fill the group’s increased milling capacity.
A marginally higher-than-expected average CPO price mill-gate price of $729/tonne for 2023 should drive an 8% increase in annual revenues, Cavendish added.
However, a change in production mix impacts gross margin so its forecasts are essentially unchanged.
“Longer term, we expect increasing scale benefits from the newly acquired land, a sixth mill and better management of the maturing plantations to drive ongoing profit and FCF [free cash flow] generation.
The broker retained its 1300p target price.