Origin Enterprises saw its operating profits fall 14.7% to €67.3m for the year ended 31 July 2016 in what was a very difficult trading year for the group.

While performance was boosted from it’s Central and Eastern European businesses acquired in 2016, adverse and unseasonal weather along with weak farm sentiment, had a negative impact on the group’s profitability and returns.

Revenues increased 4.3% to €1.52bn year on year. When the impact of currency and acquisitions are excluded, revenues fell 3.7%, mainly as a result of lower input prices and crop marketing volumes.

Profits in associate and joint ventures fell by 60.1% to €5.6m mainly as a result of the disposal of Valeo.

When these are taken into account total group operating profit fell 21.6% to €72.9m. Operating margins declined 100 basis points to 4.4%.

Margins reduced in its fertiliser business as farm incomes came under pressure. The group saw an increase in volumes, through its Gouldings brand in Ireland, which partially offset a decrease in volumes in the UK.

Finance expenses increased 53.2% to €7.4m during the year. The group saw its net cash position fall €85m to €3.1m at the end of July this year.

In the UK, which accounts for about 70% of the business it saw “good” volume recovery in the 4th quarter following a very weak third quarter. The UK business recorded lower revenue and margins in the period due to poor weather and downward pressure on farm incomes. Origin recently completed the acquisition of ReSo Seeds and R&T Liming in the UK.

In Poland, extreme weather conditions resulted in the loss of 20% of plantings.

It’s Romanian operations, comprising Comfert and Redoxim, delivered an “excellent” contribution in the period. In Ukraine, Agroscope’s operating profit was lower year on year, reflecting highly competitive environment and weak local currency.

Adjusted diluted earnings per share of 44.51 cent, a decrease of 25.9 per cent ?

Origin announced that the full year dividend is maintained at 21c/share.

Tom O’Mahony, CEO of Origin said that farm sentiment remains subdued reflecting the current pressures on farm incomes.

"The group is well positioned to respond to present market conditions and to benefit from a sustained improvement in farmer returns in the future," he said, adding that Origin will continue to expand it’s footprint into new geographies through acquisitions.

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