Significant drop in revenues for Origin
Agri-services group reports 12.5 per cent drop in sales
Falling prices for fertiliser and feed saw agri-services group Origin report a record drop in Q1 sales
Revenues at agri-services group Origin fell by 12.5 per cent in the first quarter of its financial year, down to €307.3 million, driven by lower global fertiliser and feed prices. On an underlying basis, excluding currency impact, sales fell by 7.9 per cent in the three months to October 26th.First-half revenues typically contribute just 10 per cent of full year revenues at the group.
In the UK, the group, in which food group Aryzta is a majority shareholder, found “near perfect conditions” on-farm supported a return to normal winter cropping patterns in the period. Current estimates indicate a total wheat area of approximately 2 million hectares, an increase of 23 per cent on last year. Oil seed plantings are estimated to be lower by some 15 per cent on last year at approximately 640,000 hectares, principally reflecting the impact of rotational disruption encountered last year due to unseasonal weather. This reduction is being offset through the increased planted area for wheat and other arable crops.
“Crops in general are well established and in excellent condition with the overall profile providing a strong foundation for the full year result,” the group said.
In Poland, the group noted that there has been a “good start” to the financial year against the background of a later maize harvest.
Business-to-business agri-inputs had a slower start to the financial year due mainly to lower fertiliser volumes in the UK. “Customers are adopting a cautious approach to the timing of purchase commitments in advance of the main application period given the largely stable pricing environment currently”.
In consumer foods, Origin’s Valeo Foods Group delivered a “solid performance in an intensely competitive trading environment”.
Looking ahead, the agri-services group says it has made “good progress” in building an integrated and intelligence led agri-services business capability. This, it says, “ is well positioned to capitalise on the provision of innovation and technology transfer for the sustainable development of primary crop enterprises”.As such, it expects diluted earnings per share for the current financial year to be broadly in line with the 2013 financial year, before the impact of the pending Agroscope acquisition in the Ukraine. This acquisition was announced on October 30th, 2013.