Agri-services group Origin Enterprises has seen a slow start to its financial year, where it reported revenues down 13.7% in the first quarter to €371.2m. When the effect of exchange rate is stripped out revenues declined 14.4%. The fall in revenues was driven by a 22% drop in the volumes of seed, crop protection and fertilisers sales.
The group generates around 90% of its operating profits usually in the second half of its financial year.
The group blamed prolonged unseasonal weather conditions in the UK which resulted in fewer acres of winter crops being planted compared to normal years. The group is expecting that this will have a negative impact on group operating profit for its 2020 financial year.
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In Ireland and the UK, Origin saw its crop input volumes decrease by 24%. It is forecasting that the autumn/winter cereal and oil seed rape planted area in the UK will now be 25% lower than last year at 2.1m/ha.
While the majority of this area is expected to transfer into spring cropping, it typically attracts a lower investment spend by farmers and hence will affect Origins revenues and levels of profitability.
The group also saw a 17.9% reduction in volumes across its continental European business with includes Poland, Romania, and the Ukraine. Shares in Origin set a new six year low in Tuesday’s trading when they reached €4.34. Over the past year the share price is down almost 25%.
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Agri-services group Origin Enterprises has seen a slow start to its financial year, where it reported revenues down 13.7% in the first quarter to €371.2m. When the effect of exchange rate is stripped out revenues declined 14.4%. The fall in revenues was driven by a 22% drop in the volumes of seed, crop protection and fertilisers sales.
The group generates around 90% of its operating profits usually in the second half of its financial year.
The group blamed prolonged unseasonal weather conditions in the UK which resulted in fewer acres of winter crops being planted compared to normal years. The group is expecting that this will have a negative impact on group operating profit for its 2020 financial year.
In Ireland and the UK, Origin saw its crop input volumes decrease by 24%. It is forecasting that the autumn/winter cereal and oil seed rape planted area in the UK will now be 25% lower than last year at 2.1m/ha.
While the majority of this area is expected to transfer into spring cropping, it typically attracts a lower investment spend by farmers and hence will affect Origins revenues and levels of profitability.
The group also saw a 17.9% reduction in volumes across its continental European business with includes Poland, Romania, and the Ukraine. Shares in Origin set a new six year low in Tuesday’s trading when they reached €4.34. Over the past year the share price is down almost 25%.
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