AGRANA Beteiligungs-AG

EANS-News: AGRANA results for first quarter of 2014|15 (ended 31 May 2014) - Pressure on sales prices in Sugar and Fruit reduces revenue and EBIT

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Financial Figures/Balance Sheet/quarterly report

AGRANA, the global manufacturer of sugar, starch and fruit products, started the
2014|15 financial year with a significant decline in revenue as a result of
lower market prices, following the record revenues of the past two years.
Compared to the year-earlier quarter, Group revenue in the first three months
fell by 19.1% to EUR 647.2 million. EBIT (earnings before interest and taxes),
at EUR 52.9 million, eased by 11.2% from the first quarter of the prior year.
While EBIT in the Starch segment remained steady, lower revenues in the Sugar
and Fruit segments weighed on absolute earnings in these businesses. The EBIT
margins, however, improved in all three segments.

 
"Despite the difficult environment, AGRANA looks to the future with confidence
and continues to invest in profitable growth," says AGRANA Chief Executive
Officer Johann Marihart. "As a prominent example of capital investment, our
fourth US fruit preparations plant, in Lysander, New York, began operation on
schedule. In the Starch segment, we are working to deepen our strategic
commitment to specialty starch products like organic and waxy corn starches for
market success. With this in mind, we are building out corn starch capacity at
the Austrian facility in Aschach by about 30%. In Tulln, Austria, we are
doubling the molasses desugaring volume, thus also considerabely improving
yield."

 
 
AGRANA Group financial results
(EUR million, except %)
 


                        Q1  2014|15 Q1 2013|14*
Revenue                 647.2       800,0
EBITDA**                69.9        76.1
Operating profit [EBIT] 52.9        59.6
EBIT margin             8.2%        7.5%
net financial items     (2.7)      (7.6)
Income tax              (11)        (12.1)
Profit for the period   39.2        39.9
Investments***          14.9        21.5

 

*The prior-year data have been restated under IAS 8 for the adoption of IFRS 11
(Joint Arrangements).
**Operating profit before exceptional items, depreciation and amortisation.
***Purchases of property, plant and equipment and intangibles (excluding
goodwill).

 
Net financial items in the first quarter of 2014|15 amounted to a net finance
expense of EUR 2.7 million (Q1 2013|14: net expense of EUR 7.6 million); the
year-on-year improvement resulted primarily from net currency translation gains.
With an income tax expense of EUR 11.0 million, corresponding to a tax rate of
21.9% (Q1 2013|14: 23.2%), profit for the period was EUR 39.2 million (Q1
2013|14: EUR 39.9 million). After deducting non-controlling interests, earnings
per share attributable to AGRANA's shareholders amounted to EUR 2.66 (Q1
2013|14: EUR 2.65).
 
Net debt as of 31 May 2014 stood at EUR 418.1 million, a significant seasonal
increase of EUR 31.3 million from the 2013|14 financial year-end. Total assets
were stable relative to 28 February 2014, at EUR 2,365.1 million, and the equity
ratio rose from 49.9% to 52.1%. The gearing ratio increased slightly to 34.0%
from the 28 February 2014 level of 32.4%.
 
 
Changes in reporting as a result of IFRS 11
The new, 2014|15 financial year brought substantial changes in financial
reporting. With the mandatory application of IFRS 11, from this year the joint
ventures of the STUDEN group (in the Sugar segment) and HUNGRANA group (in the
Starch segment) are accounted for using the equity method rather than
proportionate consolidation as before. As this standard must be applied
retrospectively, the values for the prior year have been restated.
 

 
Sugar segment financial results
(EUR million, except %)
 


                        Q1  2014|15 Q1 2013|14*
Revenue                 185.1       293.5
Operating profit [EBIT] 17.0        21.0
EBIT margin             9.2%        7.2%

 

As expected, business in the Sugar segment was off to a weaker start in the
2014|15 financial year, lagging behind the year-earlier results in sales volume,
revenue and operating profit (EBIT). In the first quarter, revenue declined by
36.9% year-on-year to EUR 185.1 million, driven by a reduction in sales prices
and slightly smaller quantities sold into the sugar-using industry. As
anticipated, the EBIT result of EUR 17.0 million was down from the high year-ago
value. Proactive measures were able to cushion the decrease.
 

 
Starch segment financial results
(EUR million, except %)
 


                        Q1  2014|15 Q1 2013|14*
Revenue                 177.3       180.9
Operating profit [EBIT] 14.5        14.5 
EBIT margin             8.2%        8.0%

 

Starch segment revenue in the first quarter of 2014|15 was EUR 177.3 million,
about 2% less than in the same quarter one year earlier. The mild downtick was
caused primarily by lower selling prices, which narrowly outweighed the positive
effect of the additional volumes from the wheat starch plant in Pischelsdorf,
Austria, that began production in June 2013. At EUR 14.5 million, EBIT was
constant year-on-year in absolute terms, but the EBIT margin widened to 8.2%.

 
 
Fruit segment financial results
(EUR million, except %)
 


                        Q1  2014|15 Q1 2013|14*
Revenue                 284.8       325.6
Operating profit [EBIT] 21.4        24.1 
EBIT margin             7.5%        7.4%

 

Fruit segment revenue decreased by 12.5% in the first quarter of 2014|15, to
EUR 284.8 million. In fruit preparations, sales quantities were held steady at
the prior-year level, but foreign exchange effects from the stronger euro led to
a revenue decline of close to 8%. The revenue reduction of about 25% in the
fruit juice concentrate business resulted from lower sales quantities and
selling prices. EBIT in the first quarter was EUR 21.4 million, or 11.2% less
than one year earlier. However, both in fruit preparations and fruit juice
concentrates, the segment was able to maintain the EBIT margin thanks to reduced
structural and material costs.
 

 
Outlook
 
As the downward pressure on sugar and bioethanol prices is likely to continue,
AGRANA expects a significant decrease in EBIT for the full 2014|15 financial
year. The Group's revenue is projected to ease on lower average selling prices
that more than counterbalance slightly rising sales volumes. The budget
investment of approximately EUR 96 million for the year is in line with
depreciation.
 

 
About AGRANA
 
AGRANA turns agricultural raw materials into high-quality foods and many
industrial intermediate products. About 8,800 employees at more than 50
production sites worldwide generate annual revenue of around three billion
euros. Established in 1988, the company today is the leading sugar producer in
Central and Eastern Europe and its Starch segment is a major European
manufacturer of specialty products and bioethanol. AGRANA is also the world
market leader in fruit preparations and Europe's largest producer of fruit juice
concentrates.


 
This Press Release is also available on the AGRANA website at www.agrana.com.

Further inquiry note:
AGRANA Beteiligungs-AG

Mag.(FH) Markus Simak
Pressesprecher
Tel.: +43-1-211 37-12084
e-mail: markus.simak@agrana.com

Mag.(FH) Hannes Haider
Investor Relations
Tel.: +43-1-211 37-12905
e-mail:hannes.haider@agrana.com

end of announcement                               euro adhoc 
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company:     AGRANA Beteiligungs-AG
             F.-W.-Raiffeisen-Platz  1
             A-1020 Wien
phone:       +43-1-21137-0
FAX:         +43-1-21137-12045
mail:     info.ab@agrana.com
WWW:      www.agrana.com
sector:      Food
ISIN:        AT0000603709
indexes:     WBI, ATX Prime
stockmarkets: Präsenzhandel: Berlin, Stuttgart, Frankfurt, official market: Wien 
language:   English
 

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