Agrana reports loss for 1H FY09
At AGRANA, the international sugar, starch and fruit group, the first half of the 2008|09 financial year was defined by high raw material and energy prices. The resulting decrease in margins, along with one-time expenses for a write- down on apple juice concentrate inventories, led to a loss for the period despite a number of countermeasures taken. For the second half of 2008|09, AGRANA expects a considerable improvement in profitability, driven both by the reduction in raw material prices thanks to the new crops, and by remedial action that is already producing results. From the coming 2009|10 financial year onwards, earnings are expected to return to the stronger levels of the last several years.
The first half of the 2008|09 financial year (1 March to 31 August 2008) saw revenue grow by 12.0% to EUR 1,045.5 million (H1 2007|08: EUR 933.3 million). Despite a decrease of 6.2%, the largest revenue contribution came from the Fruit segment, at EUR 408.3 million, followed by the Sugar segment (with revenue up 4.5% to EUR 383.6 million) and the Starch segment (with a revenue increase of about 93.6% to EUR 253.6 million, from EUR 131 million).
In Fruit and Starch, AGRANA had to source its raw materials at extremely high prices from the poor 2007 crops. The resulting cost increases could not be fully passed through to the market. Additionally, the dramatic erosion in sales prices of apple juice concentrate required a downward revaluation of apple juice concentrate inventories to current market prices. This one-time expense amounted to EUR 32.4 million. Overall, the Group recorded an operating loss of EUR 7.8 million (H1 2007|08: operating profit of EUR 54.4 million) before exceptional items. After exceptional items, the operating loss was EUR 10.1 million (H1 2007|08: operating profit of EUR 52.8 million). Net financial items in the first six months of the year amounted to a net expense of EUR 8.0 million (H1 2007|08: EUR 2.8 million) and the Group registered a loss for the period of EUR 21.4 million (H1 2007|08: profit for the period of EUR 36.6 million).