Wednesday 11 December 2019

'Unseasonal' weather impacts revenue at Origin Enterprises

Origin chief executive Tom O’Mahony
Origin chief executive Tom O’Mahony
Ellie Donnelly

Ellie Donnelly

Prolonged "unseasonal" weather conditions contributed to a 13.7pc fall in revenue at Origin Enterprises in the three months to 31 October.

Revenue was €371.2m for Origin’s first financial quarter of the year, compared to €430m in the corresponding period last year, according to a trading update from the group.

While the business generates around 90pc of its operating profit in the second half of the financial year, there has been a slower start to trading this year.

The poor weather impacted agronomy service, seed and crop protection volumes in the period, mainly in the UK and Romania. 

The reduced level of autumn plantings and higher level of spring plantings anticipated means that profit for the financial year 2020 is expected to be negatively impacted.

In Ireland and the UK there was a reduction in underlying agronomy services and crop input volumes of 24.1pc in the period.

Farmers and growers experienced “highly challenging operating conditions” in-field during the first quarter, leading to a lower level of crop plantings following abnormally high rainfall levels, Origin said.

The total autumn/winter cereal and oil seed rape planted area, as a result, is now forecast to be 25pc lower than last year at 2.1 million hectares. 

Meanwhile, Continental Europe recorded an underlying volume reduction in agronomy services and crop inputs (excluding crop marketing volumes) of 17.9pc in the three month period.

Looking forward, Origin said the challenging weather conditions experienced by farmers and growers in the first quarter is expected to lead to "a higher concentration of sales demand in the second half and an increased level of seasonality overall in the 2020 financial year."

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