Revenue at agri-services group Origin Enterprises grew almost 35 per cent in the first half of the financial year as price inflation and strong volume growth in some of its markets boosted the company.
But underlying business volumes fell and operating profit was lower in the UK and Ireland, the interim results noted.
The first half of the year, which ended January 31st, 2023, showed strong performance was driven by the contribution from the Dublin-listed group’s Latin America business and continental Europe, offsetting weaker operating profit in Ireland and the UK, which fell from €3.2 million to €2.9 million.
Revenue grew 34.5 per cent to €1.18 billion as commodity-led price inflation of 40.2 per cent combined with early season seed and crop protection volumes, and strong volume growth in Latin America. Operating profit almost doubled to €20.3 million, up from €11.1 million a year earlier.
However, underlying business volumes, excluding crop marketing, fell by 4.6 per cent as fertiliser demand fell and there was lower activity in Ukraine.
Adjusted diluted earnings per share were 8.70 cent, up from 4.99 cent in the first half of 2022. The interim dividend of 3.15 cent per share was flat year-on-year.
Net bank debt was €130.9 million, which reflected a commodity inflation-led increase in working capital, share buyback spend of €53.1 million and acquisition investment of €12.7 million in the 12-month period. The period under review saw the acquisition of Keystone Environmental, which is currently being integrated into the business.
Origin said it would continue to invest, announcing the acquisition of ground care products specialist Agrigem Limited, which will further extend Origin’s product range.
Net finance costs increased to €8.6 million as interest rates rose and commodity inflation led the increase in working capital.
Origin chief executive Sean Coyle said improved performances in Latin America and continental Europe helped lift the group.
“In Ireland and the UK, a favourable planting profile resulted in solid early season volumes across our seed portfolio, while overall fertiliser demand reduced due to higher global raw material prices,” he said. “In Continental Europe, Poland and Romania saw strong demand in the crop protection and seed portfolios, with an element of forward buying by growers, while LATAM [Latin America] delivered a strong underlying performance across its product portfolio.”
Looking ahead, the group said it had a strong start to the first half of the financial year – normally its seasonally quieter period – which set a solid foundation for the rest of the year.
“Origin is well positioned to deliver on the financial and strategic targets outlined in our capital markets day in May 2022,” Mr Coyle said. The company will provide an update on full year guidance in June.
