International agronomy services group Origin Enterprises plc reported an operating profit for the year ended 31 July of €90.8m, a drop of 24.4% from 2022’s performance.

Turnover for the year increased to €2,456m, with the reduced profit driven by higher costs which saw operating margin drop from 5.1% to 3.7%.

The Dublin-based group also announced that it will cease trading in Ukraine by the end of this month.

It said the business in that country has been loss making for a number of years and there is little evidence that the trading environment would improve after the war.

'Strong performance'

Chief executive Sean Coyle said that Origin “delivered a strong performance in declining commodity markets” and that “effective operational execution” helped deliver the results.

He pointed to the company’s free cashflow of over €104m, which arose as fertiliser raw materials and feed prices decreased globally.

He said the results for the year were at the top end of the group’s guidance.

Origin announced a dividend of 13.65c per share, bringing the full-year payout to 16.8c/share. The group also completed a €20m share buyback scheme.

The results released on Tuesday show that the four acquisitions announced during the year - Keystone Environmental, Neo Environmental, Agrigem and British Hardwood Tree Nursery - cost a combined €30.1m.

Drop in profits

Origin’s Irish and UK business, accounting for around two-thirds of turnover, saw the biggest drop in profits - down 38.8% for the year. The company said this was driven by a return to “more normalised trading” in the wake of a “unique” 2022.

Profits were up at its continental Europe business, which increased 6.6%, while those in Latin America surged 62.1%, with the results driven by increased capacity in Brazil, as well as greater planting of soya and maize in the country.

Coyle said the group “will continue to invest for growth across our existing operations and strengthen our earnings potential through margin accretive acquisitions”.

Shares in the company added 3% in early trading in Dublin.