Agrana revenues surge on back of Atys acquisition
Despite a sharp rise in energy costs and a narrowing of margins from sugar operations, consolidated profit from operating activities during the first three quarters was up on the year at € 83.5 million.
13/01/06 The AGRANA Group’s revenues during the first three quarters of the current 2005|06 financial year (1 March through 30 November 2005) surged by 49 per cent compared with the same period of 2004|05 to total € 1,121.5 million (Q1 – Q3 2004|05: € 753.0 million). Most of the powerful increase in revenues was due to the addition of the Atys Group — the world’s leader in fruit preparations — to the scope of consolidation as of the second quarter of 2005|06, and the growth in exports by our Sugar Segment also made itself felt.”
Despite a sharp rise in energy costs and a narrowing of margins from sugar operations, consolidated profit from operating activities during the first three quarters was up on the year at € 83.5 million (Q1 – Q3 2004|05: € 82.3 million). As Johann Marihart commented, “For the first time, the Specialities Segment, that is fruit and starch, made a bigger contribution to our overall profit than the Sugar Segment, delivering profit from operating activities of € 42.6 million. That compared with profit from sugar operations of € 41.0 million. In other words, our timely strategic investments in the Specialities Segment have enabled us to more than offset the decline in our operating profits from sugar.” AGRANA’s net cash from operating activities during the first three quarters tripled to € 216.6 million (Q1 – Q3 2004|05: € 70.3 million).
Profit after income tax during the first nine months of the financial year fell to € 63.6 million (Q1 – Q3 2004|05: € 77.4 million). That was mainly the consequence of a fall in profit from investing and financial activities (loss of € 4.6 million, as against a profit of € 3.0 million in Q1 – Q3 2004|05) and a substantially increased tax load. The key factors underlying the development of profit from investing and financial activities were the Group’s acquisitions in the fruit sector and the associated increase in interest expense.
Consolidated earnings for the period came to € 56.2 million, as against € 72.9 million in the first nine months of the previous financial year. The principal reasons for the decline included an increase in minority interests in the Group’s consolidated earnings. However, as AGRANA’s CFO Walter Grausam commented, “AGRANA took over the remaining 37.5 of Atys on 15 December, so minority interests will be significantly smaller in the 12 months to year-end.”
The AGRANA Sugar Division’s revenues during the first three quarters of 2005|06 came to € 594.3 million, which was 15 per cent up on the previous year’s figure of € 515.8 million. The amount of sugar sold in the nine months ended 30 November 2005 increased sharply to 880,000 tonnes (Q1 – Q3 2004|05: 656,000 tonnes). This growth was due to accelerated exports (to allow for the fact that implementation of the WTO panel ruling will limit export opportunities in the course of 2006) and deliveries made within the scope of the EU intervention system. The large supply of sugar within the EU forced the industry to accept price cuts averaging about 12 per cent. In addition, profits were dented by energy higher costs and a supplementary levy for the 2004 harvest. Consequently, the Sugar Division’s profit from operating activities during the first three quarters fell to € 41.0 million, which was well below the figure of € 60.8 million recorded in the same period of 2004|05.
Total sales by volume in the Specialities Segment more than doubled to € 527.2 million (Q1 – Q3 2004|05: € 237.2 million). The segment’s profit from operating activities also increased significantly to € 42.6 million (Q1 – Q3 2004|05: € 21.5 million). Austrian starch revenues during the first three quarters grew by 4.8 per cent. The 14.0 per cent increase in sales by volume more than made up for the year-on-year fall in prices. The division continued to step up sales of tailor-made starch products. The International Starch Division’s revenues during the first three quarters of 2005|06 were 6.1 per cent up on the same period of the previous year, and sales by volume grew by 11.4 per cent.
The Fruit Preparations Division continued to develop well during the third quarter of the 2005 calendar year. Sales by volume of fruit preparations were roughly 9.3 per cent up on the same period of the previous year. Particularly rapid growth was achieved in the USA, Mexico, Russia and Australia. The two new processing facilities located in Tennessee, USA, and Serpuchov, Russia, were already operating at high capacity immediately after commencing production.
Sales by volume by the Fruit Juice Concentrates Division during the first nine months of 2005 were slightly up on the year. The Group will be making allowance for the growing consumption of fruit juices in Russia and the Ukraine by stepping up its presence in those markets.
The Group’s results during the 2005|06 financial year as a whole will be dominated by the first far-reaching consolidation of its fruit operations. Combined with rapid organic growth in AGRANA’s fruit and starch operations and high earlier-than-planned sugar exports, it will generate a surge in revenues. In the words of Managing Board Chairman Johann Marihart, “We expect our revenues this financial year to come to nearly € 1,500 million, compared with € 981 million last year. For the first time, the Specialities Segment—that is, fruit and starches—will catch up with the Sugar Segment in revenue terms.”
Whereas the Specialities Segment’s profit from operating activities will double, the Sugar Segment’s results will decline as a consequence both of high campaign energy costs and of unfavourable prices despite declassification. Overall, AGRANA’s full-year profit from operating activities should be up on the year. Restructuring decisions necessitated by changed conditions in the sugar sector will be made by the end of this financial year.
