Profits and Revenues Down at Agrana as Hurt by Lower Sugar Prices but “Well Positioned” for Rest of Year

17 May 2016 --- Agrana Beteiligungs-AG has reported a dip in full-year profits and revenues after its sugar division was hurt by industry-wide lower sugar prices.

Profits at the Vienna-based sugar and starch maker fell from €84.6m ($96m) to €80.9m ($92m) over the year.

Revenues were down from €2.493bn ($2.82bn) to €2.477bn ($2.8bn) in the period according to the results which were described by chief executive Johann Marihart as "respectable".

Marihart said: "More than ever, we are benefiting from our diversification across three pillars, which led to a respectable earnings result for the year. While in the Sugar segment the price-driven lower revenue was reflected in the expected weaker, but positive operating profit, the Starch and Fruit segment proved dependable pillars of the group's earnings."

“In fact, the Starch segment, buoyed not just by its product diversity in food and non-food starches but also by ethanol prices above the prior year´s level, delivered the best EBIT result in its history."

“The Fruit segment achieved EBIT at the prior-year level, with a significant increase in profit on the fruit preparations side. In the fruit juice concentrate business, the result was hurt especially by the low prices for apple juice concentrate from the 2014 crop."

Revenues across its sugar division were down 8 percent to €672.6m ($762m) on the year while EBIT (Earnings before Interest, Tax) was down 52 percent to €4.3 million ($4.9m), as it took a hit on lower sugar prices which have also impacted competitors.

But Agrana said the second half of the year benefited from higher sales volumes, which help improve operating profits.

Revenues in its starch division came in at €721.6 million ($817m), up slightly by 3.1 percent from the previous year.

The revenue growth in starch was driven by the performance of its bioethanol business on higher selling prices and higher volumes across starch derivatives. Overall earnings were up 22 percent to €65.9 million ($75m).

Sales across its fruit division were up two percent to €1,083.4 million ($1.2bn) while earnings were €58.8 million ($66.6m), around level with the previous year.

In the fruit perpetrations division, sales volume increased slightly from one year earlier. But in the fruit juice concentrates division, revenues were down by around 18 percent as a result mainly of sharply lower selling prices for apple juice concentrate from the 2014 crop.

Looking ahead Agra said it was "well-positioned" for the year ahead.

Marihart added: "For the 2016/17 financial year we currently expect both Group revenue and operating profit (EBIT) to show a moderate increase."