AGRANA Beteiligungs-AG

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Financial Figures/Balance Sheet
AGRANA - After raw-materials-induced loss in first six months, significant improvement is expected in second half of 2008|09 Good crops in 2008 have put an end to high raw ...

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6-month report


At AGRANA, the international sugar, starch and fruit group, the   first  half  of the 2008|09 financial year was defined by high raw material and  energy  prices. The resulting decrease in margins, along with one-time  expenses  for  a  write- down on apple juice concentrate inventories,  led  to  a  loss  for  the  period despite a number of countermeasures taken.  For  the  second  half  of   2008|09, AGRANA expects a considerable improvement in profitability, driven both  by  the reduction in raw material prices thanks  to  the new  crops,  and  by  remedial action that is already producing results.  From  the  coming  2009|10  financial year onwards, earnings are expected to return to  the  stronger  levels  of  the last several years.

The first half of the 2008|09 financial year (1 March to  31  August 2008)  saw revenue grow by 12.0% to EUR 1,045.5 million (H1  2007|08: EUR 933.3  million). Despite a decrease of 6.2%, the  largest   revenue  contribution  came  from  the Fruit segment, at  EUR 408.3   million,  followed  by  the  Sugar  segment  (with revenue up 4.5% to EUR 383.6 million) and the Starch  segment  (with  a  revenue increase of about 93.6% to EUR 253.6 million, from EUR 131 million).

In Fruit and Starch, AGRANA had to source its raw materials  at   extremely  high prices from the poor 2007 crops. The  resulting  cost increases  could  not  be fully passed through to the market. Additionally, the dramatic erosion in  sales prices of apple juice concentrate  required  a  downward  revaluation  of  apple juice concentrate inventories to current market prices.  This  one-time   expense amounted to EUR 32.4 million. Overall, the Group recorded an operating  loss  of EUR 7.8 million (H1  2007|08:  operating  profit of  EUR 54.4  million)  before exceptional items. After exceptional items,  the  operating  loss  was  EUR 10.1 million (H1 2007|08: operating profit of EUR 52.8 million). Net financial  items in the first six months of the  year  amounted  to  a  net  expense  of  EUR 8.0 million (H1 2007|08: EUR 2.8 million) and the Group registered a loss  for  the period of EUR 21.4 million (H1  2007|08:  profit  for the  period  of  EUR 36.6 million).

Johann Marihart, Chief Executive Officer of AGRANA  Beteiligungs-AG, commented: "To improve the current difficult situation, we are employing energy  efficiency measures,  have  reduced  investment  to well  below  depreciation,    and    are emphasising rapid utilisation of the newly built production capacity."  For  the second half of the financial year, raw material prices  for  grains  and  fruits have already eased significantly thanks to the outlook  for  this  year's crop. "We believe the bottom of the trough is behind us. Now that the legacy  effects in the Juice business have been absorbed, we expect to return  to  significantly better earnings results in the second half of the year," said Marihart.

First half of the 2008|09 financial year AGRANA - IFRS results for the six months ended 31 August

First six months of    First six months of
                                              2008|09                        2007|08
Revenue                         EURm  1,045.5                        933.3
Operating profit          EURm        (7.8)                        54.4
before exceptional
Exceptional items         EURm        (2.3)                      (1.6)
Operating profit after EURm      (10.1)                      52.8
exceptional items
Profit/(loss) before    EURm      (18.1)                      50.0
Profit/(loss) for the  EURm      (21.4)                      36.6
Earnings/(loss) per      EUR        (1.39)                      2.55
Staff count                                8,617                      8,950

Revenue by segment
EURm                            First six months of  First six months of
                                  2008|09                         2007|08
Sugar segment                 402.1                            376.2
Starch segment                270.7                            154.7
Fruit segment                 408.3                            435.1
Inter-segment                 (35.6)                          (32.7)
AGRANA Group revenue  1,045.5                            933.3

Capital expenditure in the first  half  of  2008|09  was   significantly  reduced after the completion of the previous years' very large investment programme,  to EUR 32.6 million (H1 2007|08: EUR 107.9 million).

Sugar segment The Sugar  segment  grew  its  revenue  to  EUR 402.1 million,  an  increase  of EUR 25.9 million from the first half of the prior year. The  driving  factor  in the growth was an increase in  quota sugar sales in the EU, as well  as  through exports to countries outside  the  European  Union.  At  a  profit  of  EUR 13.0 million, Sugar's contribution to operating profit was  down  slightly from  the year-earlier level, as expected. The raw sugar refinery  in Brcko,  Bosnia,  is

@@start.t2@@currently  in  the  process  of  being  brought    on    stream,    which    entails corresponding launch costs.

Starch segment Revenue in the Starch segment for the first six months of 2008|09 was  EUR 270.7 million, or almost 75% higher than the year-earlier level of EUR 154.7  million. This growth was propelled by the increase in bioethanol production and also  the@@end@@

inclusion of animal feed revenue, which in the prior year was  still attributed to the Sugar segment. Operating profit before exceptional items fell to  EUR 0.4 million (H1 2007|08: EUR 21.2 million) in the Starch  segment.  The  reason  was that the expensive wheat and corn (maize) from the prior-year harvest needed  to be processed, yet the associated extra costs could  not  be  passed  through  to customers for isoglucose and bioethanol.

Fruit segment Dramatic price erosion in apple juice concentrate in the second quarter  of  the financial year drove down Fruit segment revenue by  6.2%  to  EUR 408.3 million. The  write-down  of  apple   juice    concentrate    inventories,    combined    with reorganisation expenses in the fruit and juice activities, caused a  significant deterioration in Fruit segment operating earnings during the first half of  this financial  year,  from  the  year-earlier  profit  of   EUR 18.7 million  to    an operating loss of EUR 21.2 million before exceptional items.

Outlook In its  unchanged  projection  for  the  full  2008|09   financial  year,  AGRANA continues to expect an increase in Group revenue to  more  than  EUR 2.1 billion (2007|08: EUR 1.9 billion).

In the Sugar  segment,  the  European  sugar  regime  (with  lower   quota  sugar production and the reduction of  the  producer  margin) makes  it  likely  that operating  profit  before  exceptional  items will  decrease.  For  the  Starch segment, an improvement in pre-exceptionals operating profit is expected in  the second half of the year compared to the prior year's second  half,  particularly as the lower grain prices from the 2008  crop  greatly  improve  the   production cost structure in the latter half of this year. With the stable  performance  in fruit  preparations  and  with  the   improvement  in  the  concentrate  business compared to the first half of the year, the Fruit segment, though  not  matching the prior year, should generate a  pre-exceptionals  operating  profit  for   the full financial year.

For AGRANA as a whole in 2008|09, the Group is forecasting an   operating  profit of about EUR 30 million before exceptional items, as well as a solid  cash  flow trend. In 2009|10, provided that the broad normalisation in raw material  prices and in procurement and product markets  persists,  the  performance  improvement measures taken by AGRANA will already enable the Group to return to  the   higher profit level of the 2007|08 financial year.

This press release and the report  on  the  first  six  months  of   2008|09  are available in German and English on the Internet at

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ots Originaltext: AGRANA Beteiligungs-AG
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Further inquiry note:
AGRANA Beteiligungs-AG
Mag. Maria Fally
Investor Relations
Tel.: +43-1-211 37-12905

Mag. Ulrike Pichler
Public Relations
Tel.: +43-1-211 37-12084

Branche: Food
ISIN:      AT0000603709
WKN:        779535
Index:    WBI, ATX Prime
Börsen:  Börse Berlin / Präsenzhandel
              Börse Frankfurt / Präsenzhandel
              Börse Stuttgart / Präsenzhandel
              Wiener Börse AG / official market

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