AGRANA improves operating profit in third quarter of 2015|16 and confirms full-year forecast, with EBIT up slightly from prior year
Date: 13.01.2016Group revenue of AGRANA Beteiligungs-AG was steady in the first nine months of the 2015|16 financial year at € 1,908.0 million (Q1-Q3 prior year: € 1,914.4 million). While profit for the period, at € 108.8 million in the first three quarters, was still off 12.5% year-on-year, EBIT in the third quarter was already up 7.2% from one year earlier.
As AGRANA Chief Executive Officer Johann Marihart explains, "the first nine months of the financial year continued to be characterised by difficult conditions in the sugar market. Although selling prices did not fall further, they remained low, weighing on revenue and earnings. Nonetheless, we were already able to bring the Sugar segment's EBIT back into positive territory from the second quarter, and for the full year as well Sugar EBIT should be at least neutral or slightly above, as a result of higher sales volumes.
In the Starch segment we achieved a strong improvement in profitability from the prior-year period thanks especially to higher ethanol prices. Our third segment, Fruit, is also showing a solid overall business performance, driven by a positive trend in the fruit preparations division and despite lower results in the fruit juice concentrate division. These results once again prove the effectiveness of our strategy of diversification into three pillars for balancing out the effects of fluctuating business conditions across the segments."
Net financial items of the AGRANA Group in the first three quarters of 2015|16 amounted to a net expense of € 16.3 million (Q1-Q3 prior year: net expense of € 12.7 million); the year-on-year difference resulted primarily from net currency translation losses (Q1-Q3 prior year: net translation gains). After an income tax expense of € 21.6 million, corresponding to a tax rate of approximately 23.4% (Q1-Q3 prior year: 27.3%), profit for the period was € 70.8 million (Q1-Q3 prior year: € 81.2 million). Earnings per share attributable to AGRANA shareholders were € 4.97 (Q1-Q3 prior year: € 5.39).
Net debt as of 30 November 2015 was € 449.0 million (28 February 2015: € 330.3 million). Total assets saw a minor increase to € 2.44 billion compared with 28 February 2015, and the equity ratio was steady at 49.7%. The gearing ratio rose to 37.0% as of the quarterly balance sheet date (28 February 2015: 27.7%).
AGRANA consolidated financial results for first three quarters of 2015|16
(1 March to 30 November 2015)*
€ million, except %
|
Q1-3 2015|16 |
Q1-3 2014|15 |
Revenue |
1,908.0 |
1,914.4 |
EBITDA** |
154.1 |
168.2 |
Operating profit before exceptional items*** |
90.8 |
108.0 |
Share of results of equity-accounted joint ventures |
19.7 |
20.1 |
Exceptional items |
(1.7) |
(3.7) |
Operating profit (EBIT) |
108.8 |
124.4 |
EBIT margin |
5.7% |
6.5% |
Net financial items |
(16.3) |
(12.7) |
Income tax |
(21.6) |
(30.5) |
Profit for the period |
70.8 |
81.2 |
Investment**** |
78.8 |
62.5 |
|
Q3 2015|16 |
Q3 2014|15 |
Revenue |
644.5 |
629.2 |
EBITDA** |
61.0 |
55.0 |
Operating profit before exceptional items*** |
32.8 |
29.8 |
Share of results of equity-accounted joint ventures |
7.7 |
7.2 |
Exceptional items |
(0.4) |
0.4 |
Operating profit (EBIT) |
40.1 |
37.4 |
EBIT margin |
6.2% |
5.9% |
Net financial items |
(5.1) |
(4.6) |
Income tax |
(8.0) |
(11.8) |
Profit for the period |
26.9 |
21.0 |
Investment**** |
38.0 |
23.9 |
*All prior-year data have been restated under IAS 8
**EBITDA represents operating profit before exceptional items, results of equity-accounted joint ventures, and operating depreciation and Amortisation
***Operating profit before exceptional items and results of equity-accounted joint ventures
**** Investment represents purchases of property, plant and equipment and intangible assets, excluding goodwill
Sugar segment
€ million, except %
|
Q1-3 2015|16 |
Q1-3 2014|15 |
Revenue |
540.5 |
563.4 |
Operating profit (EBIT) |
10.4 |
29.0 |
EBIT margin |
1.9% |
5.2% |
|
Q3 2015|16 |
Q3 2014|15 |
Revenue |
195.5 |
185.3 |
Operating profit (EBIT) |
4.0 |
0.9 |
EBIT margin |
2.1% |
0.5% |
Sugar segment revenue in the first three quarters of 2015|16 declined slightly, easing by 4.1% year-on-year to € 540.5 million. Lower sugar selling prices were partly offset by higher sales volumes of quota sugar, especially to industrial customers. As expected amid the pressure on sugar prices, the segment's EBIT of € 10.4 million came in significantly below the year-ago result. However, EBIT improved in the third quarter, reflecting primarily the year-on-year reduction in raw sugar costs and the higher sales quantities.
Starch segment
€ million, except %
|
Q1-3 2015|16 |
Q1-3 2014|15 |
Revenue |
544.0 |
535.4 |
Operating profit (EBIT) |
52.9 |
45.6 |
EBIT margin |
9.7% |
8.5% |
|
Q3 2015|16 |
Q3 2014|15 |
Revenue |
191.3 |
184.2 |
Operating profit (EBIT) |
21.8 |
20.4 |
EBIT margin |
11.4% |
11.1% |
Revenue in the Starch segment in the first nine months of 2015|16 was € 544.0 million, or 1.6% above the value for the prior-year comparative period. Among other areas, the revenue growth was achieved in the bioethanol business, which benefited from higher selling prices, and in wet starch derivatives, thanks to higher sales volumes. EBIT of € 52.9 million significantly surpassed the year-earlier amount, by 16.0%. This operating profit growth was driven above all by the improved prices of ethanol; also, average raw material costs for the Starch segment as a whole eased slightly year-on-year.
Fruit segment
€ million, except %
|
Q1-3 2015|16 |
Q1-3 2014|15 |
Revenue |
823.5 |
815.6 |
Operating profit (EBIT) |
45.5 |
49.8 |
EBIT margin |
5.5% |
6.1% |
|
Q3 2015|16 |
Q3 2014|15 |
Revenue |
257.7 |
259.7 |
Operating profit (EBIT) |
14.3 |
16.1 |
EBIT margin |
5.6% |
6.2% |
Fruit segment revenue in the first three quarters of 2015|16 was € 823.5 million, in line with the good year-earlier period. In the fruit preparations business the revenue growth of almost 9% resulted from increased sales volumes and prices. The fruit juice concentrate business, on the other hand, was impacted by the low apple juice concentrate prices from the 2014 harvest and registered a revenue decrease of about 20% year-on-year. This also made itself felt in EBIT for the segment as a whole, which declined by 8.6% from one year earlier to € 45.5 million despite a significant improvement in fruit preparations EBIT.
Outlook
AGRANA continues to expect Group revenue to remain steady in the 2015|16 financial year. For operating profit (EBIT) the Group is projecting slight growth year-on-year in view of a combination of increased price expectations for bioethanol, lower raw material prices and an at least neutral earnings result in the Sugar segment. In the 2015|16 financial year the AGRANA Group's total investment will be about € 112 million, thus exceeding depreciation of just under € 90 million.
About AGRANA
AGRANA converts agricultural raw materials into high-quality foods and numerous industrial intermediate products. About 9,000 employees at more than 50 production sites worldwide generate annual Group sales of around € 2.5 billion. Established in 1988, the company today is the leading sugar producer in Central and Eastern Europe, and its Starch segment is both a major European manufacturer of specialty products and the largest producer of bioethanol in Austria. AGRANA is also the world market leader in fruit preparations and Europe's largest maker of fruit juice concentrates.