Origin Enterprises Posts €2.8m Operating Loss In First Half
Published on Mar 5 2020 11:53 AM
Origin Enterprises has posted a €2.8 million operating loss of in the first half of the year.
Decrease in underlying operating profit of €11.4 million, principally reflecting a 25.6% reduction in business volumes in Ireland and the UK, due to lower autumn and winter crop plantings, according to its interim results for the half year ended 31 January 2020.
“It has been a challenging first six months for the Group. Operating conditions faced by farmers and growers, principally in the UK, due to intense and prolonged rainfall has led to a 40% year-on-year reduction in the level of autumn and winter crop plantings," said Tom O'Mahony, chief executive officer, Origin.
"This significantly exceeds the 25% reduction estimated at the time of our Q1 Trading Update in November 2019 and has resulted in lower than expected underlying profitability and cash generation in our largest division, Ireland and the UK."
O'Mahony highlighted that as set out in its Trading Update on 26 February 2020, the adverse weather conditions experienced in Ireland and the UK, together with the challenges associated with an anticipated large increase in spring cropping means that it is likely that Group operating profit and adjusted diluted earnings per share for the full year will now be significantly lower than expected at the time of its Q1 Trading Update.
According to the report, the groups Continental Europe and Latin America divisions performed 'in line with expectations' during the period.
The agri-services group said that strong working capital performance in Continental Europe was offset by higher working capital in Ireland and the UK as a result of lower sales.
"Especially pleasing was the reduction in working capital delivered by our teams in Continental Europe," O'Mahony added.
Consistent with prior years, O'Mahony said that the group will provide a comprehensive update on full year guidance at the time of the Q3 Trading Update on 17 June 2020.
"Notwithstanding the weather challenges currently being experienced in Ireland and the UK, we remain confident in the delivery of our 2023 growth ambition as set out at our 2019 Capital Markets Day,” he said.
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