Cereal prices hit Origin as it ramps up for busy second half
Published 11/03/2016 | 02:30
Irish agri-services firm Origin Enterprises swung to a pre-tax loss of €4.1m in the first half of its financial year as falling cereal prices hit the bottom line.
Farmers cutting back on spending due to falling grain prices pushed revenue 4.6pc lower in the six-months to the end of January.
As well as lower crop prices, Origin blamed the loss on poor weather including flooding which prevented farmers from treating their crops and land - something which is at the core of Origin's business. Revenue at the firm dropped to €507.2m from €531.6m year-on-year.
Origin's loss compared to a €7.6m profit a year ago.
Company chief executive Tom O'Mahony said it had been a "challenging period".
"Highly adverse ... weather patterns have significantly limited in-field crop maintenance activity during the second quarter.
"This, combined with weak farmer confidence reflecting the current pressures on primary producer incomes and cash flows, is expected to result in a greater concentration of service and input demand arising during the main application period in the second half of the financial year," he said.
Most of Origin's trade begins in mid-March and continues on to the middle of June and Mr O'Mahony expects trade to pick up significantly in the period.
"Assuming normal weather patterns and no material adverse change in current exchange rates, the group expects to achieve full year adjusted diluted earnings per share of between 51c and 53c," he said.
The company will pay an interim dividend of 3.15c per share. Goodbody Stockbrokers, Liam Igoe, said that was a gesture to shareholders who received no payout in the first half of 2014.
Mr Igoe identified currency headwinds as a potential threat to the firm with the majority of its sales being dealt with in sterling.
Origin shares closed 0.95pc lower at €6.54.