Origin issues profit warning as high rainfall hits business
Agri-services group says ‘challenging weather conditions’ disrupting sales
Origin said it would provide further detail on trading conditions in the coming months
The company said unusually high levels of rainfall in both countries had hit demand for agronomy services and crop inputs.
“The impact on Ireland and UK performance of the adverse conditions experienced to-date together with the challenges associated with an anticipated large increase in spring cropping, means that it is expected that group operating profit and adjusted diluted earnings per share for the full year will now be significantly below the current range of analysts’ estimates,” it said in a trading statement.
Origin said it would provide further detail on trading conditions in the coming months. “However, the outlook for the spring planting season remains uncertain, and consistent with prior years, we will be in a better position to provide a meaningful update on full-year guidance at the time of the third quarter trading update on June 17th 2020,” it said.
It said it did not expect any change to the long-term growth rates for the business.
“Autumn/winter rainfall has been at its highest level in 30 years, with more than double the number of continuous days rainfall compared to the prior year and the fifth wettest on record,” the company said.
“ It is anticipated that a greater area will now transfer to spring cropping, with a consequential lower investment spend by farmers and growers on agronomy services and crop inputs,” it said.
“With the extent of the shortfall in winter cropping in addition to the poor establishment of already sown crops, the total planted area for the 2020 financial year is expected to be circa 10 per cent lower year on year, compared to the anticipated 2 per cent reduction at the time of the Q1 trading update (last November),” the company said.
Origin said its business in Continental Europe had been shored up by a strong planting season “and we anticipate good sales growth for the full year”.