Substantial improvement in earnings at AGRANA: € 27.5 million operating profit after exceptional items in third quarter, up from operating loss of € 10.1 million in first half of 2008|09 Ad hocDatum: 14.01.2009
Third quarter of 2008|09
In the third quarter of the 2008|09 financial year, AGRANA, the sugar, starch and fruit group, boosted profitability considerably from the negative first half of the year to a level near the prior year’s third quarter. At € 27.5 million, profit after exceptional items was only € 3.1 million below the year-earlier level of € 30.6 million. This was due primarily to significantly lower grain prices in the Starch segment and an earnings improvement in the Fruit segment compared to the result of the first half of the year.
First three quarters of 2008|09
In comparison to the first three quarters of the prior year, Group revenue increased by 12.5% to € 1,595.5 (Q1-Q3 2007|08: € 1,418.7 million). This revenue growth was driven primarily by the bioethanol business, which expanded strongly. In the first three quarters of the year the Fruit segment generated what continued to be the largest revenue contribution of the Group’s segments, with a share of 38.9%, followed by the Sugar segment at 36.2% and Starch segment at 24.9% (Q1-Q3 2007|08: 13.7%).
AGRANA Group CEO Johann Marihart commented the current business performance: “Raw material prices for grain have normalised again thanks to the good European crops harvested in 2008. In the Starch segment this has restored our accustomed revenue and profit levels.”
Owing to the operating loss in the first half of the year, the Group operating profit of € 19.7 million before exceptional items in the first nine months remained significantly below the year-earlier result of € 87.4 million.
The absolute amount of net financial items increased from a net expense of € 15.7 million in the year-earlier period to a net expense of € 28.8 million in the first three quarters of 2008|09. This was caused largely by the adverse exchange rate movements in Eastern Europe, Ukraine and Brazil, which led to negative currency translation effects.
On balance, the Group posted a pre-tax loss of € 11.4 million (Q1-Q3 2007|08: pre-tax profit of € 67.7 million). The loss for the period was € 16.1 million (Q1-Q3 2007|08: profit for the period of € 49.7 million). The Group registered a loss of € 0.96 per share, compared to earnings per share of € 3.49 one year earlier.
Investment in the first three quarters of 2008|09 totalled € 48.9 million (Q1-Q3 2007|08: € 157.2 million), consistent with the investment budget sized below the level of depreciation.
AGRANA - Results for the three quarters ended 30 November 2008|09 (IFRS)
First three quarters
First three quarters
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Revenue by segment
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In the first three months of the 2008|09 financial year, the Sugar segment achieved revenue growth of 3.3% to € 614.9 million (Q1-Q3 2007|08: € 595.3 million). The increase was driven by higher volumes of quota sugar sales. The marked volatility of some Eastern European currencies reduced operating profit to € 17.3 million (Q1-Q3 2007|08: € 28.9 million).
Starch segment revenue in the first three quarters of 2008|09 was € 423.1 million – an increase of 82.4% from the year-earlier revenue of € 231.9 million. The key reasons were strongly rising bioethanol revenue in Austria and Hungary and the inclusion of co-product revenue in the Starch segment results (co-products were previously attributed to the Sugar segment). Starch operating profit before exceptional items, at € 15.3 million, was still well below the year-earlier period’s € 27.9 million, but represented a pronounced improvement compared with the first half of 2008|09.
In the reporting period the Fruit segment generated revenue of € 620.7 million (Q1-Q3 2007|08: € 644.5 million). The revenue shortfall in the first half of 2008|09 was partly made up in the third quarter, particularly in the concentrate business. Although the Fruit segment’s year-to-date operating loss of € 12.8 million is still unsatisfactory, it improved from the loss of € 21.2 million reported in the first six months, which had resulted from the one-time write-down of juice inventories.
AGRANA reiterates its revenue and profit forecast for the 2008|09 financial year: Group revenue is projected to grow from € 1.9 billion to € 2.1 billion, and Group operating profit before exceptional items is expected to measure about € 30 million.
In the Sugar segment, AGRANA expects revenue slightly below the prior-year level, owing primarily to the lower production of quota sugar.
In the Starch segment, the dynamic revenue growth will continue in the fourth quarter. The main contributing factors are the higher starch capacity in Hungary and the full utilisation of the bioethanol plants.
Revenue in the Fruit segment for the full 2008|09 financial year is expected to be somewhat lower than one year earlier, due largely to concentrate prices.