AGCO, the maker of Massey Ferguson, Fendt and Valtra machinery, has reported bumper profits for its 2018 financial year thanks to double-digit sales growth of new combine harvesters.

Despite continued weakness in grain commodity prices during the year, AGCO reported growth of 13% in 2018 as sales hit $9.4bn (€8.2bn).

Operating profits for AGCO soared by close to 20% during the year to reach $501m (€440m), as profit margins widened from 5% in 2017 to 5.4% in 2018. Pre-tax profits jumped by more than a quarter (+27%) in 2018 to reach $360m (€315m). During the year AGCO returned $184m (€160m) to shareholders via an ongoing share repurchase programme. The company has returned $1.2bn (€1bn) to shareholders over the last six years.

Driving this performance was strong growth in sales of new combines. AGCO said sales of combine harvesters were up 10% in North America, 13% in western Europe and 9% in South America. In contrast, sales of new tractors were up a modest 2% in North America, flat in South America and down 2% in Europe.

AGCO chief executive Martin Richenhagen said the outlook for sales in 2019 is favourable thanks to improving farm incomes in Europe and Brazil, which will more than offset weaker sales in Argentina. While the US Department of Agriculture is forecasting farm incomes in the US to fall in 2019, AGCO says it expects continued sales growth for high-horsepower machinery.