VIENNA, AUSTRIA — AGRANA reported on July 9 that operating profit for the first three months of the year dropped 40.3% to €31.6 million ($34.9 million) as a result of lower market prices.
 
Group revenue declined 5.3% in the first three months, to €612.7 million. While in the Sugar segment the significant erosion in sales prices detracted from revenue and led to a negative operating result, EBIT in the Starch segment improved somewhat. In the Fruit segment, EBIT eased year-on-year as expected, as a result of a modest dip in the profit trend in fruit juice concentrates.
 
“In the Sugar segment we are passing through a challenging financial year in 2015|16. The first quarter too was marked by lasting downward pressure on sugar prices. In the Starch and Fruit segments we achieved a good trend in sales volume. Our diversification across three business segments will be helpful in delivering solid profit for the period as a Group in the full financial year,” said Johann Marihart, chief executive officer of AGRANA Beteiligungs-AG.
 
Net financial items in the first quarter of 2015-16 amounted to a net expense of €1.7 million compared to net expense of €2.7 million in the first quarter a year ago. The year-on-year improvement arose primarily from the net interest result. After an income tax expense of €8.3 million, corresponding to a tax rate of 27.8% (Q1 of prior year: 21.9%), profit for the period was €21.6 million (Q1 of prior year: €39.2 million). Earnings per share attributable to AGRANA shareholders were €1.45 (Q1 of prior year: €2.66).
 
The Starch segment's revenue in the first quarter was €174.1 million, about 1.8% less than in the same quarter one year earlier. This small downtick was driven mainly by lower selling prices for products purchased for resale, which were almost fully made up for by greater sales volumes of modified starches and higher prices for ethanol. At €14.7 million, absolute EBIT was up slightly year-on-year, and profitability (the EBIT margin) rose to 8.4%.