Origin Enterprises, the international agri-services group, has announced its interim results for the half-year ended January 31, 2024 (H1 2024).
The group, which provides agronomy services, crop inputs and digital solutions in the area of land use, said that its underlying business volumes, excluding crop marketing, reduced by 2.6% due to adverse weather conditions impacting autumn and winter planting activity in the northern hemisphere.
An expected correction in global feed and fertiliser raw material pricing contributed to the decrease in H1 2024 group revenues to €854.9 million and operating profit to €12.7 million.
Origin said this is “set in the context of a very strong” H1 2023 performance driven by rising commodity markets and strong on-farm demand, which saw group revenues of almost €1.2 billion and operating profit of €20.3 million.
According to the group, the diversification of its profit drivers – geographical and sectoral – is continuing to reduce the impact of adverse weather events in its core UK and Ireland market on the business’ overall profitability.
The acquisition of Groundtrax Systems, a supplier of ground protection and urban drainage systems, “further enhanced” Origin’s product capability in the amenity, environmental and ecology portfolio, the group said.
The company’s cumulative acquisition spend was €54.2 million in the last 12 months, including the completion of an option for the residual 35% interest in crop nutrition business Fortgreen in Brazil, bringing it under 100% control.
Origin’s net bank debt increased to €215.8 million in H1 2024.
Finance costs increased to €8.8 million due to higher interest rates, and adjusted diluted earnings per share were 3.75c, down from 8.7c for H1 2023.
The interim dividend for H1 2024 was 3.15c/share, unchanged from 12 months earlier.
A €20 million share buyback programme for the full financial year of 2024 (FY 2024) is around 27% complete at this point, Origin said.
In terms of personal, current chief financial officer (CFO) TJ Kelly has been appointed divisional managing director of amenity, environment and ecology, and is set to take over that role from August 1. The process of recruiting a new CFO is underway.
Commenting on the interim half-year results, Sean Coyle, Origin Enterprises’ chief executive officer (CEO), said: “The group delivered a solid operating profit in H1 2024 compared to a very strong H1 2023 performance. The H1 result was achieved despite challenging planting and weaker in-field conditions across our markets.
“A challenging planting profile and a downward-moving price environment resulted in reduced early season volumes across our portfolio, with Ireland, the UK, and continental Europe experiencing more challenging conditions,” Coyle added.
“Latin America and our amenity, environmental and ecology businesses delivered solid results despite also being impacted by fertiliser price dynamics.”
In terms of outlook, the CEO said that on-farm sentiment remains cautious, as growers shift towards spring planting and seek to optimise yields from a reduced autumn and winter planted area.
Coyle said that Origin’s earnings for FY 2024 will continue to be impacted by adverse weather conditions.