Origin Enterprises plc., the international agri-services group, which provides specialist agronomy advice, crop inputs and digital agricultural solutions, saw an increase of almost 50% in its group revenue in the quarter to the end of April 2022.
The company has today (Friday, June 10) issued its FY22 Trading Update for the three and nine months ended 30 April 2022.
Reported group revenue was €880.6 million for quarter three (Q3), an increase of 47.3% on the prior year.
According to the company, while exceptional price volatility for both agricultural outputs and fertiliser persisted through Q3, the group experienced strong trading conditions throughout the period.
This was due to good crop establishment, generally favourable weather conditions and strong on-farm sentiment.
Origin Enterprises finances
Group revenue for the nine months ended 30 April 2022 was €1,757.7 million, an increase of 50.2% year-on-year on a reported basis.
Excluding crop marketing, revenue in the company’s agronomy and inputs businesses delivered constant currency growth of 49.6%, reflecting volume growth of 2.3%, pricing improvement of 47.5% and a reduction of 0.2%.
The group saw strong crop protection and seed volume growth, offset by fertiliser demand reduction as a result of the exceptionally high fertiliser pricing environment.
Ireland and the UK recorded an overall reduction in underlying volumes in Q3 of 8.7% and an increase year-to-date of 0.4%.
Q3 saw encouraging volume performances across the group’s seed and crop protection portfolios, offset by reduced fertiliser volumes, according to the latest financial report.
This trading environment was supported by a positive planting profile, with good crop establishment and favourable weather conditions, despite the impact of price inflation.
Planting
Total autumn and winter plantings for principal crops are estimated to be 8.7% ahead of last year at 2.6 million hectares.
The area of winter wheat is estimated to be up 6.7% to 1.8 million hectares (1.7 million hectares in FY21) and oilseed rape up 19.0% to 0.4 million hectares (0.3 million hectares in FY21).
Total autumn, winter and spring plantings for the 2022 growing season are forecast to be 2.9% ahead of last year, at 4.4 million hectares.
Business-to-business agri-inputs has recorded increased revenues year-to-date driven primarily by global raw material price inflation, partly offset by reduced levels of demand.
Outlook
The global fertiliser market has seen significant raw material price volatility over recent months, however the group said it continues to navigate these supply chain and pricing pressures.
Origin Enterprises Amenity business has delivered a strong performance year-to-date, continuing the positive momentum from the first half of the year, the latest report indicates.
The integration of UK’s manufacturer and distributor of landscaping, forestry and ground maintenance equipment, Green-tech, has progressed to plan and is performing ahead of expectations, according to the company.
Digital Agricultural Services continues to develop the Group’s capabilities in precision farming and digital agronomy. By the end of Q3 FY22, over 1.8 million active hectares were uploaded to the group’s platform.
On March 9, 2022, Origin Enterprises began a share buyback programme to repurchase up to €40 million of ordinary shares.
The programme is progressing to plan and is currently 96% complete, according to the company.
New chair
Also announced separately today, chairman Rose Hynes will be succeeded by Gary Britton at the 2022 AGM in November.
Gary Britton joined the board as a non-executive director in October 2015 and was appointed as senior independent director in January 2021. He is currently chairman of the Audit and Risk Committee and a member of the Nomination and Corporate Governance Committee.
He is a former partner in KPMG where he served in a number of senior positions, including on the firm’s board, on the Remuneration and Risk Committees and as head of its Audit Practice.
Britton is currently a non-executive director at Cairn Homes plc., and was formerly a non-executive director of The Irish Stock Exchange plc and KBC Bank Ireland plc.
As part of a programme of ongoing refreshment and renewal, the Origin Nomination and Corporate Governance Committee is also engaged in a process to appoint two non-executive directors to the board.