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Agrana AG: announces 9M 2019-2020 Financial Results

Wien / AT. (ab) In the first three quarters of the 2019/2020 financial year, Austria’s Agrana Beteiligungs-AG, the fruit, starch and sugar company, generated Ebit operating profit of EUR 69.8 million, already surpassing the result of the full prior year. Agrana Chief Executive Officer Johann Marihart comments: «Despite a recent improvement in the sugar price situation, seen especially in the spot markets in Eastern Europe, higher campaign costs are again weighing on results in the 2019 beet processing campaign, as heat and drought led to reduced beet crops. Revenue in the Fruit segment was stable, although fruit preparations revenue remained below initial expectations despite higher sales volumes. The Starch segment benefited from the high bioethanol prices and, with its Ebit growth, drove the Group’s earnings improvement relative to the prior year.»

9M 2019/2020 at a glance

  • Revenue: EUR 1,879.4 million (+0.9 percent; Q1-Q3 prior year: EUR 1,863.5 million)
  • Ebit: EUR 69.8 million (+9.9 percent; Q1-Q3 prior year: EUR 63.5 million)
  • Ebit margin: 3.7 percent (Q1-Q3 prior year: 3.4 percent)
  • Profit for the period: EUR 43.1 million (+16.5 percent; Q1-Q3 prior year: EUR 37.0 million)
  • Equity ratio: 53.4 percent (28 February 2019: 59.0 percent)

Outlook for full year 2019/2020

  • Forecast for full 2019/2020 financial year reaffirmed, with significant Ebit increase and slight growth in revenue year-on-year
  • Investment well above depreciation
  • Diversification and specialties are basis for stable Group performance

Results in each business segment

Fruit segment: Fruit segment revenue in the financial first three quarters was EUR 889.3 million, in line with the year-earlier period. Ebit, at EUR 45.9 million, showed a significant decrease of 26 percent from a year ago. The causes of this deterioration lay mainly in the fruit preparations division, where several factors, including sales volume growth below expectations, reduced margins in Europe as well as one-off effects especially in raw materials, along with low sales prices for apples in Ukraine, were the primary drivers of the reduction in operating profit.

Starch segment: The Starch segment’s revenue in the first nine months rose by 7.2 percent year-on-year to EUR 606.9 million. And with Ebit of EUR 57.3 million, the Starch segment surpassed the comparative year-earlier result by 55.3 percent. The very significant earnings growth was powered largely by the rise in the market price of ethanol and by higher sales volumes of saccharification products and native and modified starches.

Sugar segment: Sugar segment revenue in the first three quarters of the financial year was EUR 383.2 million, off 5.8 percent from one year earlier. Lower sugar sales volumes were responsible for this decrease. Ebit improved moderately to a deficit of EUR 33.4 million, from a deficit of EUR 35.4 million in the year-ago period. Although the 2019 campaign, like the prior year’s, is associated with significant idle-capacity costs resulting from smaller beet harvests, higher sugar sales prices than in the prior year had a positive effect on Ebit.

Outlook

For the full 2019/2020 financial year, Agrana AG, company of Leipnik-Lundenburger Invest Beteiligungs AG, continues to expect a significant increase in Group operating profit (Ebit). Revenue is projected to be slightly higher than in the year before. In the 2019/2020 financial year the Agrana Group plans to invest EUR 140 million, significantly exceeding the budgeted depreciation of about EUR 110 million. CEO Johann Marihart says: «The construction of the betaine crystallisation plant in Tulln, Austria, a EUR 40 million project, is proceeding apace and from June 2020 this new facility will boost the amount of value added in the Sugar segment. The second wheat starch plant in Pischelsdorf, Austria, which opened in November, has successfully begun operation and will already contribute significant product quantities to the Starch segment’s sales volumes in the fourth quarter of the 2019/2020 financial year. Thanks to our diversified business model, we are thus able to reiterate the guidance of a significant year-on-year improvement in the Group’s Ebit for the full year 2019/2020.»