Agrana expects significant growth
As expected, the first quarter of the 2019/20 financial year of Agrana was marked by a continued negative earnings result in the Sugar segment. In the first quarter of the prior year, the Sugar segment had still earned a slight profit. The company´s Chief Executive Officer Johann Marihart explains: “Although the slightly lower EU sugar production volumes after the 2018 beet processing campaign, together with a reduced planting area in 2019, have led to the first slight pick-up in sugar prices, the Sugar segment’s EBIT result even under these circumstances is still negative. On the other hand, the fruit juice concentrate business and the Starch segment performed well, which in the case of the Starch segment was thanks to higher ethanol prices than in the prior year. Due to raw-material-related one-time costs in the fruit preparations business, however, EBIT for the Fruit segment overall was below that of the year-earlier quarter. For the full financial year, for the Group as a whole, we continue to expect a significant increase in EBIT.”
Starch segment increased by 14,5%
First-quarter revenue in the Starch segment was € 207.7 million, a significant increase of 14.5% year-on-year. The revenue growth resulted from high bioethanol prices, which were up by more than one-third from the year-earlier level. With EBIT of € 18.4 million, the Starch segment surpassed the comparative year-earlier quarter by 85.9%. The pronounced earnings growth stemmed primarily from the significant rise in the market price of ethanol, as well as from volume gains in all other product segments.
New production lines in Asia and Australia
The company expects a significant increase in the Group’s EBIT for the 2019/20 financial year despite the continuing major challenges in the Sugar segment. Group revenue is projected to show moderate growth. In the 2019/20 financial year the Agrana Group plans to invest € 143 million, significantly exceeding the budgeted depreciation of about € 108 million. Key capex projects include the addition of new production lines in Asia and Australia and the expansion of the wheat starch plant in Pischelsdorf near Tulln, Austria. The doubling of the wheat starch capacity at this site is progressing on schedule and the plant expansion is to be brought on stream at the end of 2019.