AGRANA revenue drops
July 11, 2014
by World Grain Staff
VIENNA, AUSTRIA — AGRANA reported on July 10 a significant decline in revenue for the first quarter as a result of lower market prices, following the record revenues of the past two years.
Compared to the year-earlier quarter, Group revenue in the first three months fell by 19.1% to €647.2 million. EBIT (earnings before interest and taxes), at €52.9 million, eased by 11.2% from the first quarter of the prior year. While EBIT in the Starch segment remained steady, lower revenues in the Sugar and Fruit segments weighed on absolute earnings in these businesses. The EBIT margins, however, improved in all three segments.
"Despite the difficult environment, AGRANA looks to the future with confidence and continues to invest in profitable growth," said AGRANA Chief Executive Officer Johann Marihart. "As a prominent example of capital investment, our fourth U.S. fruit preparations plant, in Lysander, New York, began operation on schedule. In the Starch segment, we are working to deepen our strategic commitment to specialty starch products like organic and waxy corn starches for market success. With this in mind, we are building out corn starch capacity at the Austrian facility in Aschach by about 30%. In Tulln, Austria, we are doubling the molasses desugaring volume, thus also considerably improving yield."
Net financial items in the first quarter of 2014-15 amounted to a net finance expense of €2.7 million compared to net expense of €7.6 million a year ago. Profit for the period was €39.2 million compared to €39.9 million in the same period a year earlier. After deducting non-controlling interests, earnings per share attributable to AGRANA's shareholders amounted to €2.66 compared to €2.65 per share last year.
As the downward pressure on sugar and ethanol prices is likely to continue, AGRANA expects a significant decrease in EBIT for the full 2014-15 financial year. The Group's revenue is projected to ease on lower average selling prices that more than counterbalance slightly rising sales volumes.