Consolidated revenue of AB Linas Agro Group for the first three months went up, profits- down
Consolidated revenue of AB Linas Agro Group for the first three months of FY 2018/19 totaled EUR 156 million and was 21% more as compared to previous year.
Sales volume in tons reached 409 thousand tons of various grains and agricultural inputs and was 6% less as compared to previous year.
The gross profit reached EUR 12.4 million and was 14% lower than a year before. Consolidated EBITDA was 16% lower and amounted to EUR 7.1 million. The operating profit was EUR 4.4 million or 21% lower. Profit before taxes amounted to EUR 3.8 million and was 27% lower. The net profit attributable to the company went down 23% and stood at EUR 3.3 million.
The overall situation of harvest in all Baltic States has been challenging for all businesses of the Group, especially those related to grain trading. Sales volume in tons dropped 6%, not as much as the sourcing market: as per forecast, the overall harvest of cereals and oilseeds in Lithuania, Latvia and Estonia in 2018 forecasted to be less accordingly 23%, 24%, and 29%. Revenue gained from agricultural commodities trading grew 27% to EUR 91 million, while the operating profit dropped 45% to EUR 2.4 million.
Sales of the new agricultural machinery went up 23%. Sales of fertilizers and plant protection products grew about 20%, while sales of certified seeds went up 4%. The total revenue from products and services for farming business had a 15% increase to EUR 43 million, and the operating profit more went up 123% to EUR 1.9 million.
The decreased yield had a more negative impact on performance of Group’s farming companies. Revenue of agricultural companies dropped 14% to EUR 7.7 million and previous operating profit of EUR 0.5 million has turned into loss amounting to EUR 0.4 million.
The previous investments to poultry farming allowed to increase the number of raised birds by 3%, the poultry market price was also 3% higher. Revenue from poultry business grew 19% to EUR 19 million and operating profit went up 26% to EUR 1.7 million.
To optimize trading activities and reduce operating costs, improve customer service and avoid an internal competition between subsidiaries, the Group is carrying out some transformations in the organizational structure: closing the Danish trading company and the dormant Latvian company; merging fertilizer warehousing company to the grain elevators company; merging sales and back office teams of Linas Agro and Dotnuva Baltic, also have founded a subsidiary in the Ukraine.
Though raw milk prices are on the low trend, AB Linas Agro Group is positive regarding development of milk production on the long term and has plans to invest into milk production facilities and expand its cow herd. Also plans to further expand poultry raising capacity, and increase slaughtering capacity by 2020.