Revenue at agri-business group Origin Enterprises rose by more than 53 per cent in the first half of its financial year, as price increases in feed and fertiliser boosted figures.
Operating profit for the period ending January 31st, 2022 was €11.1 million, up from €1.2 million a year earlier, as the business bounced back. Underlying operating profit rose €7.3 million. Underlying volume growth was 15 per cent for the first half.
The group said it saw increased overall demand, driven by a combination of forward buying by farmers and an encouraging autumn-winter planting season.
Chief executive Sean Coyle said there had been strong performances across all three operating segments.
"While rising fertiliser pricing resulted in a 5 per cent reduction in fertiliser demand in the period, security of product supply is the key focus ahead of peak seasonal demand. The UK and Ireland saw a notable recovery through improved plantings and good early season volumes across our seed and crop protection portfolios," he said.
"An improved contribution from continental Europe was driven by early season demand and positive on-farm sentiment. Our Latin American segment delivered a strong underlying performance in both our core portfolio and new controlled-release fertiliser volumes as our CRF plant in Minas Gerais in Brazil successfully managed its first seasonal peak."
Adjusted diluted earnings per share of were 4.99 cent in the first half, compared to a loss per share of 1.53 cent in the prior year.
The company said the interim dividend would be 3.15 cent per share. It is also preparing a €40 million share buyback programme, which will commence on March 9th and may continue until November 15th, 2022.
Quieter trading period
The six-month period marked the completion of the first phase of its Cork property disposals, which generated cash flow of €19.5 million.
“Although in the seasonally quieter trading period, the group’s first-half performance represents a positive foundation for the full year, with an encouraging cropping profile across each of our geographies,” said Mr Coyle. “We are conscious of the challenges of price volatility and risk in the supply chain and are taking appropriate actions to mitigate these risks where possible.”
The group said it was well placed to deliver solid growth in earnings for the full year. It said it was mindful of the price volatility and supply chain risks that could pose a challenge in the second half.
Origin has operations in Ukraine, which were initially suspended following Russia's invasion of the country. It has recommenced limited localised operations in areas away from the conflict, when safe to do so, said the company.
The group has established internal support teams in Poland and Romania to meet colleagues and their families as they cross the border.
“These teams are in close contact with our Ukrainian colleagues, organising transport, accommodation, food, clothing, medication, and any other support required by the families that are crossing the border,” said Mr Coyle.