Origin full-year pre-tax profit falls by 26% to €65.5 million

The agri-business group said unseasonal weather conditions and weak farm sentiment hit profits

28th September, 2016
Origin's pre-tax profit fell by 26 per cent to 65.5 million

Agri-business group

Origin Enterprises has reported a 26 per cent drop in full-year pre-tax profit to €65.5 million, a result it described as "a solid performance in a challenging environment".

"Highly adverse and unseasonal weather conditions, combined with weak farm sentiment, drove a highly-competitive trading environment which negatively impacted the group's profitability and returns," chief executive Tom O'Mahony said.

Despite the drop in profits, shares in the company rose in morning trade in Dublin to stand 3.4 per cent higher at €5.70 by 11:00 a.m.

Revenue rose by 4.3 per cent to €1.52 billion but total group operating profit was down by 21.6 per cent to €72.9 million. However, the company maintained its dividend at 21 cent per share. Origin reported a good volume recovery in the fourth quarter following a weak third quarter.

"Notwithstanding the fact that sector sentiment remains subdued reflecting the current pressures on farm incomes, the group is well positioned to respond to present market conditions and to benefit from a sustained improvement in primary producer returns," O'Mahony said.

Origin, which has operations in Ireland, the UK, Poland, Ukraine and Romania, said agri-services had a challenging year, resulting in a 3.7 decrease in underlying revenue which reflected the impact of lower input prices and crop marketing volumes.

Average net debt totalled €190 million, compared to €186 million last year. Net cash at the end of July was €3.1 million, down from €88.8 million a year earlier due to acquisition spending of €73.6 million during the year.

The company said it had enjoyed a strong performance from the central and eastern European farm services businesses acquired this year and integration was progressing according to plan.

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