Origin Enterprises Plc., the international agronomy services group which has headquarters in Dublin, has issued its first quarter trading update for the three months ended October 31, 2023 (Q1 FY24).
The group also hosted its annual general meeting (AGM) yesterday (Thursday, November 17).
The report shows solid growth in Q1 in underlying group volumes of 1.3% compared to prior year.
Continued correction in global feed and fertiliser raw material pricing led to a decrease in group revenue of 25.7% to €532.5 million in Q1 FY24, compared to €716.2 million for the same period in the previous financial year.
Planting
While planting in parts of the UK has been delayed following a later harvest and adverse weather in recent weeks, it is reasonably well advanced with 1.4 million hectares of winter wheat drilled, according to Origin.
The group’s current expectation is that approximately 1.5 million will be drilled compared to last year’s 1.8 million hectares.
Autumn and winter cropping is expected to decrease marginally in continental Europe with drought conditions delaying planting in Romania.
Despite downward movement in global fertiliser prices, Latin America delivered year-on-year underlying revenue growth of 22.1% according to the financial report.
On-farm sentiment is reasonable according to Origin, influenced by a recent firming of commodity output prices despite the challenging in-field conditions.
Generally, inventory levels on-farm remain low and are likely to require replenishment for the spring application period.
Origin Enterprises
The report indicates a good start to the year in the group’s Amenity, Environmental and Ecology division where a marginal decline in amenity volumes, as a result of the adverse weather in the UK, was offset by the integration of acquisitions.
Commenting on Origin’s Q1 trading update, Sean Coyle, CEO said: “Overall, the first quarter delivered a solid start, with growth in underlying volumes despite delayed plantings and a
later harvest in the northern hemisphere.
“The continued strong performance of our Latin American business combined with the growing contribution from our Amenity, Environmental and Ecology division, is helping to offset the impact of more challenging planting conditions in Europe.
“Given the continued strong cash performance of the business, today we are announcing a new share buyback programme of up to €20 million.
“We are confident that the group is well positioned to deliver on our 2022 Capital Markets Day financial and strategic ambitions,” he added.
Q1 FY24 €m
Q1 FY23 €m
Variance %
Underlying %
Constant currency
Ireland/UK
321.9
460.0
(30)
(31.7)
(30.0)
Continental Europe
99.6
154.4
(35.5)
(36.2)
(36.2)
Latin America
55.1
46.4
18.8
22.1
22.1
Total agronomy and inputs
476.6
660.8
(27.9)
(28.9)
(27.8)
Crop marketing
55.9
55.4
0.7
(4.0)
(4.0)
Total group
532.5
716.2
(25.7)
(27.0)
(26.0)
Ireland and the UK recorded a decrease in underlying agronomy services and crop input volumes of 4% in Q1 FY24.
Overall, a later 2023 harvest and challenging weather related in-field conditions have led to a delayed autumn/winter planting season in parts of the UK.
Currently, 1.4 million hectares of winter wheat has been drilled and the company said it is optimistic that approximately 1.5 million can be drilled compared to the 1.8 million hectares planted last year.
Combined autumn/winter and spring plantings for the 2024 crop production year are expected to be in line with last year at 4.4 million hectares.
Business-to-business agri-inputs had a solid start to FY24 according to the update, with reduced revenues compared with Q1 FY23 driven by the continued correction in global feed and fertiliser raw material pricing.
Volumes have been somewhat impacted by the adverse weather experienced in Q1.
The group said it intends to launch another share buyback programme of up to €20 million.
Sustainability
During the quarter, the ‘Science Based Targets’ initiative validated Origin’s greenhouse (GHG) reduction targets.
Scope 1 and 2 goals were classified as consistent with a 1.5°C trajectory, thereby meeting the Paris Agreement goals on global warming, according to Origin.
Targets include a 54.9% reduction in Scope 1 and 2 emissions by FY2032 (from FY2019) and a 32.5% cut in Scope 3 emissions from purchased goods, services, transportation, and product use.
