The agri-services, inputs and agronomy group which owns Origin and Goulding fertiliser brands made an operating profit of €3.8m in its first six months to the end of January, compared with a loss of €314,000 for the same period last year.
Operating profit from the agri-services business was €2m compared with a loss of €1.8m in the same period last year. The improved performance in the seasonally quiet first half of the year was mainly due to an increase in agronomy service and crop input volumes, together with improved margins.
Revenues rose by 11% to €564.4m as a result of increased agronomy service revenue and crop input volumes. It was partially offset by lower fertiliser prices and crop sales prices and volumes. There was underlying volume growth of almost 13% in the period compared with the corresponding period last year.
Net debt at 31 January 2017 was €161.6m compared with €168.3m at 31 January 2016, which is 1.95 times profits (EBITDA).
Seasonally quiet period
Origin’s share of the profits from its joint ventures and associates increased by €0.2m to €1.7m. R&H Hall is a joint venture with W&R Barnett. Origin has a 50% shareholding in John Thompson, the largest single-site multi-species animal feed mill in the EU. The group said it delivered a satisfactory result in the period.
The first six months are seasonally the quiet trading period for the group and Origin said that there has been a solid foundation established for the more important second half, based on crop plantings.
Commenting on the results, Origin chief executive officer Tom O’Mahony said: “Performance was supported by a more stable near-term planning environment for primary producers together with the benefit of generally settled weather, which led to increased on-farm activity throughout the period.’’
He added that the group remains focused on embedding strategic cost initiatives, working capital management and business integration. The consolidation of acquisitions completed in 2016 in the UK, Poland and Romania is progressing as planned.
Origin recently reached an agreement to acquire the fertiliser blending and nutrition business of Bunn Fertiliser in the UK for a consideration of £14m.
Origin also announced today that it has acquired Resterra which develops agri-based software and is a specialist in data capture and analytics for a total consideration of £11.4m.
Resterra has £2.6m revenues and profits (EBIT) of £800,000 and will complement the work of the Origin-UCD collaborative partnership.