Agri-services group Origin Enterprises has reported a recovery in half year profits thanks to a significant increase in crop plantings in the UK and Ireland this year.
Announcing half year results on Thursday, Origin said operating profits for the six months to the end of January 2021 had improved to just over €1.2m, which the group attributed to a return to more normalised autumn and winter crop plantings in the UK and Ireland.
Including contributions from joint venture subsidiaries, Origin recorded a group operating profit of €2m.
Origin posted a group wide operating loss of €7.2m for the same period last year, when extremely poor weather conditions in the back end of 2019 resulted in a major slump in winter crop plantings.
Overall, Origin recorded a 5% decline in sales for the first half of its 2021 financial year to just over €572m. The decline in sales was attributed to adverse currency movements in its international markets in Eastern Europe.
Strong cashflow management in the first half of the year allowed Origin to reduce its net debt by more than €100m year-on-year, to stand at just over €158m.
Having decided against paying an end of year dividend to shareholders last August, Origin said it would resume paying a shareholder dividend in 2021, as it announced a half year dividend of 3.15c per share.
Origin also provided some updates on its forecast for crop plantings in the UK and Ireland in 2021. The group said autumn and winter plantings in the UK and Ireland for 2021 are expected to be up almost 70% on last year at 1.7m hectares.
The strong recovery in autumn and winter crop plantings means the area planted in spring crops in the UK and Ireland is likely to be down close to 10% on last year.
This means the total area in the UK and Ireland planted in both winter and spring crops is likely to be up more than 10% in 2021 to 4.4m hectares.
Crop plantings in the Ukraine and Poland are forecast to be up 1% to 2% in 2021, while Romanian crop plantings are expected to be down 1% this year.
As a result of the recovery in crop plantings in its key markets, Origin is forecasting “good growth” in profits for its full financial year. Shares in Origin Enterprises increased 2% to just under €3.50 in early morning trading on Thursday.