Sugar, starch and fruit company AGRANA saw revenues grow by 9.9% to €851.6 million in the first quarter, but operating profitability declined from year-ago levels by 12.7% to €61.9 million.
While operating profit in the fruit segment was all but doubled, higher raw material costs weighed on the margins in the sugar and starch segments, as expected.
“In terms of revenue, we achieved a positive start to AGRANA's anniversary year,” said AGRANA CEO Johann Marihart. “At the same time, as expected, the high raw material prices detracted from our profitability.”
The Sugar segment, as expected, began 2013|14 on a downward trend compared to one year earlier. Revenue in the first quarter was down slightly year-on-year as a result of somewhat lower sales to industrial customers. Revenue from by-products and other products remained constant. The pressure on prices in Hungary and Romania and the overall rise in raw material costs depressed operating profit before exceptional items to €21.1 million.
Starch segment revenue in the first quarter was up from the year-ago level. Operating profit before exceptional items decreased from the year-earlier quarter. The main reason was an increase in raw material costs. The profit contribution from AGRANA Bioethanol was in line with one year earlier. On balance, this business performance in the segment led to a reduction in operating margin from 12.5% to 7.5%.
Revenue in the Fruit segment continued to rise significantly in the first quarter. This resulted especially from substantial volume growth of 10% in sales of fruit preparations as market share was expanded significantly in all regions. AGRANA noted that it was particularly gratified that volume growth was achieved even in the EU market. Operating profit before exceptional items nearly doubled year-on-year. AGRANA raised the operating margin in the Fruit segment to 7.4%, an increase of 2.9 percentage points from the first quarter of the prior year. The positive revenue and earnings trend was also made possible by the fruit juice concentrates business, thanks to higher sales volumes of apple juice concentrates and additional earnings from the Ybbstaler companies.
For the 2013/14 financial year, AGRANA continues to expect a slight increase in group revenue, driven primarily by volume growth. AGRANA reiterated its projection that full year operating profit before exceptional items will not reach the group's very good results of the past two financial years. In all three segments, the total investment will be about €143 million in the 2013|14 financial year, thus, said the company, providing solid support for the group’s long-term growth trajectory.
