Origin report operating loss of €1.8 million from Agri-Services in quiet first half
A slower start to Agri-Services trading in seasonally quiet first half has hit Origin Enterprises revenues hard.
In its interim results announced the morning it said highly adverse weather conditions combined with the current difficult market backdrop for primary producers is resulting in increased seasonality and a more challenging trading environment.
However, it also said that a well-established autumn and winter cropping base providing favourable platform for seasonally important second half.
Origin Chief Executive Officer Tom O’Mahony said trading for the seasonally quiet first half of the financial year has been both slow and challenging with the Group recording an operating loss of €1.8 million from Agri-Services.
He said highly adverse and unseasonal weather patterns have significantly limited in-field crop maintenance activity during the second quarter in particular.
“This, combined with weak farmer confidence reflecting the current pressures on primary producer incomes and cash flows, is expected to result in a greater concentration of service and input demand arising during the main application period in the second half of the financial year.
“The Central and Eastern European acquisition development completed during the period furthers our objective of building a coherent, scalable and geographically diverse farm services footprint.
“We are committed to extending the Group’s crop management systems and yield enhancement capabilities to positively influence the profitability and sustainability of the Group’s 30,000 plus farm customers.
“With the seasonally more important second half of the financial year to come and assuming normal weather patterns and no material adverse change in current exchange rates, the Group expects to achieve full year adjusted diluted earnings per share of between 51 and 53 cent.
“We will provide a further update on guidance at the time of the announcement of the Group’s third quarter trading update in May 2016,” he said.