Agrana reports revenue of €2.41B for first three quarters 2013-2014 financial year, up 1.2% from year-ago period; operating profit before exceptional items falls 22.4% to €158.6M amid ease in selling prices in sugar, starch segments

VIENNA , January 13, 2014 (press release) – In the first three quarters of the 2013|14 financial year, AGRANA Beteiligungs-AG registered a slight increase in Group revenue from the prior-year comparative period (up 1.2% to € 2,416.9 million). At € 158.6 million, operating profit before exceptional items was less than the record year-earlier figure (€ 204.3 million); the primary reason for the reduction was that selling prices in the Sugar and Starch segments eased ever since the summer.

"As we expected, our operating profit could not match the excellent year-ago result, even if the third-quarter operating margin improved compared to the second quarter. In the quarter under review, in November, AGRANA completed the 60,000 tonne capacity sugar silo in Kaposvár, Hungary. The construction of our fourth US fruit preparations plant is on schedule and the facility will be finished in May 2014," explains Johann Marihart, Chief Executive Officer of AGRANA Beteiligungs-AG.

After a net financial items expense of € 22.2 million and a tax expense of € 33.9 million (corresponding to a tax rate of 24.8%), Group profit for the period was € 102.6 million. Net debt at 30 November 2013 measured € 458.6 million, down € 25.1 million from the 2012|13 financial year-end figure of € 483.7 million.

SUGAR segment

In the first nine months of the financial year, revenue in the Sugar segment declined year-on-year, mainly as a result of lower quota sugar sales volume and pricing as well as weaker export business. While sugar sales volumes eased slightly, revenues from by-products and other products were constant. The significant decrease in operating profit was driven by the downward price pressure and lower sugar sales quantities, as well as increased production costs of the 2012|13 campaign and the fact that in the middle of the year, costs for raw sugar were still relatively high.

STARCH segment

The revenue growth in the Starch segment was attributable largely to higher sales volumes. The reduction in earnings is explained primarily by a lower profit contribution from HUNGRANA, the joint venture in Hungary. Amid more intense competition, selling prices were down. As well, the commissioning of the wheat starch plant in Pischelsdorf, Austria, entailed the expected start-up losses.

FRUIT segment

Sales volumes of fruit preparations were boosted by about 6% overall, with gains achieved both within the EU (up 4%) and outside Europe (up 8%). The revenue growth in fruit juice concentrates was driven primarily by higher sales quantities of apple juice concentrate (especially as a result of the Ybbstaler volume, which the first quarter of the prior year did not yet include). The key drivers of the improvement in operating profit were volume growth in fruit preparations and favourable annual delivery contracts from the 2012 crop in the fruit juice concentrates business.

Outlook

Given the challenging market environment and the year-to-date business performance, AGRANA expects Group revenue for the full 2013|14 financial year to be steady at the prior-year level. However, operating profit will be lower than in the very good last two financial years. Total investment of approximately € 140 million in the 2013|14 financial year will provide solid support for the Group's long-term growth.

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