An increase in revenue of almost 4% has been reported by Origin Enterprises plc in a “satisfactory start” to the 2018 financial year, in the “seasonally quiet” first quarter.
The agri-services group issued a trading update for the three-month period ending on October 31 in advance of its AGM in Dublin this morning.
For the three months, group revenue totalled €346.7 million. This compared to €333.6 million in the corresponding period last year, an increase of 3.9%, according to the statement.
On an underlying basis at constant currency, revenue increased by €16.6 million (5%), with this movement principally reflecting increased volumes, the statement added.
The statement outlined that Ireland and the UK delivered a satisfactory performance, recording underlying volume growth in agronomy services and crop inputs of 5.7% during the three-month period.
On a like-for-like basis (adjusted for the impact of currency movements and acquisitions), there was an underlying increase in revenue of 9.8% compared to the corresponding period last year. Acquisitions resulted in increased revenue of 3.3% offset by a 4% reduction due to currency movements.
‘Solid momentum’
Meanwhile, Origin also detailed in its trading update that ‘Integrated Agronomy’ and ‘On-Farm Services’ delivered a “satisfactory performance” in the first quarter with all service and input portfolios “maintaining solid momentum in competitive trading conditions”.
In the first three months of the financial year, autumn and winter crop planting activity reportedly advanced well – following a delayed start to field operations during August and September.
Currently, it is forecast that total winter oil seed rape and winter wheat plantings will be close to 2.8% above last year at 2.42 million hectares. Combined autumn, winter and spring plantings for the 2018 growing season are estimated to be in line with last year, at 4.55 million hectares, Origin explained.
For the combined total, a reduction in spring plantings was taken in favour of the more intensive autumn and winter crop production, agri-services group outlined.
Outlook
Concluding, the trading update added that sector sentiment at the moment remains cautious against an improved planning backdrop for primary food producers.
The autumn and winter cropping profile provides a strong foundation for the seasonally more important second half, when in excess of 90% of earnings typically arise, according to Origin.
A further update on cropping status and farming activity ahead of the group’s main trading season is set to be provided at the time of the interim results announcement in March of next year.