Origin Enterprises shrinks pretax loss but uncertainty remains

Agri-services business Origin Enterprises saw its pretax loss shrink in the first half of its financial year as the company battled with the impact of Covid-19 and Brexit.

Revenue in the six months ended January 31st, 2021, was €572.4 million, down 5.4 per cent as the group saw a negative impact from foreign exchange rates. Operating profit was €1.2 million for the six months, from a loss of €2.8 million in the same period in 2020, and pretax loss was €2.54 million. That compared to a pretax loss of almost €7.2 million in the previous year. Adjusted diluted loss per share was 1.53 cent.

Origin said an increase in underlying operating profit of €5.7 million was driven by improved performance in Ireland and the UK, and was attributed to more normalised autumn and winter crop plantings.

The group’s business in Continental Europe and Latin America performed in line with expectations, although the latter was hit by foreign exchange rates.

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The company said it would pay an interim dividend of 3.15 cent per share.

"While continuing to navigate the challenges caused by Covid-19, weaker currencies in certain of the group's geographies and Brexit, the group delivered an improved performance in the first half of the year," said chief executive Sean Coyle. He said the group was well placed to deliver good growth in earnings for the full year.

However, Mr Coyle warned there was some uncertainty over the outlook for the coming months.

“While our H1 2021 performance sets a positive foundation for the full year, with an encouraging cropping profile across our geographies, continued wet and cold conditions in the UK and Ireland have meant that our expectation of 1.7 million hectares for the total winter wheat planted area in the UK is now lower than the 1.8 million hectares anticipated at our Q1 trading update, and may delay the spring application period,” he said.

“That, together with the renewed Covid-19 restrictions across all of our geographies, means that trading uncertainties remain heading into the seasonally more significant second half.”