(Alliance News) - Origin Enterprises PLC on Wednesday said trading started slowly in its first financial quarter, reflecting dry planting conditions and delayed harvests.
As a consequence, the Dublin-based agri-services group's revenue for the three months ended October 31 was 14% lower at EUR318.3 million compared to EUR371.2 million the year before.
In Ireland and the UK, revenue was 9.0% lower at EUR181.9 million, in continental Europe it was 14% lower at EUR77.7 million, and in Latin America is was 2.9% lower at EUR10.6 million. Crop Marketing revenue fell 32% to EUR48.1 million.
On an underlying constant currency basis, total group revenue was down 11%, reflecting an underlying 3.3% volume reduction in sales of seed, fertiliser, and crop production in the quarter, as well as a movement in fertiliser prices year-on-year. The pricing of other inputs was stale or higher compared to the year before.
Origin said it expects the planted area for autumn and winter crops will be broadly in line with financial 2019, with an increased UK cropping area offset by reduced cropping in continental Europe.
The company noted that: "The improved level of autumn plantings in the UK is expected to deliver increased agronomy services, seed and crop protection volumes in FY21 compared to FY20 with a positive impact on group operating profit as is anticipated in current analysts' estimates."
In terms of outlook, Origin said: "With the normalisation of crop plantings following an extremely challenging weather year in FY20, the group expects improved agronomy services and crop input volumes and a return to operating profit growth in FY21. Weaker emerging market currencies, the continued possibility of Brexit without a trade deal on December 31, 2020 and the ongoing Covid-19 pandemic still represent challenges for the group in FY21.
"Our scalable business model, diversified market positions, prudent risk management and capital allocation strategy, leave us well positioned to address these challenges."
Origin will issue another update on its cropping status and farming activity ahead of its main trading season in the second half at the time as its interim results announcement in March 2021.
Origin shares were flat at 3.55 pence each in London on Wednesday afternoon.
By Anna Farley; annafarley@alliancenews.com
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Origin (OGN)