The annual revenue and profit of Dotnuva Baltic have grown even in a difficult market
Despite the unfavourable weather conditions for farmers and the contraction of the agricultural machinery market, Dotnuva Baltic increased its revenue and profit in the financial year 2017/18 as a result of growth in grain complexes installation and seed processing businesses, as well as stable income from agricultural machinery sales.
The company’s revenue for the last financial year amounted to EUR 88.23 million and was 2% higher compared to the same period last year (EUR 86.46 million). Profit before tax grew by 2%.
“We have maintained growth even in the difficult market conditions. The investments of farmers in the new agricultural machinery have shrunken but we still had a record-breaking results from grain elevators constructing activity, as well as sales of certified seeds and some other machinery,” said Darius Jaloveckas, CEO of Dotnuva Baltic.
According to D. Jaloveckas, the financial year 2017/18 was particularly active in the construction of grain dryers, grain elevators and other grain equipment – sales increased by 9.4% over the year: “After a damp and difficult harvest season in 2017, Baltic farmers and grain traders rushed to prepare for the next season and actively invested in grain drying equipment and silos.”
During the last financial year, Dotnuva Baltic implemented nearly twice as many projects in the Baltic States. Most of the grain storage facilities have been built in Lithuania – their total capacity exceeds 135 thousand. tons. There were also significant projects in neighbouring countries: in Estonia “Dotnuva Baltic” designed and built the largest grain elevator in the Baltic States, with the largest Cimbria dryer (80 t/h) in the Baltic States, and in Latvia two grain elevators of the total capacity of 40 thousand tons were installed.
Sales of seeds from Dotnuva Baltic also increased by 10.8 % during the year. The main reason for this is the enormous demand for certified seeds: “Due to the contraction of the wintering areas, the summer wheat seeds even had to be imported. The sales of certified seed were also boosted by EU support for planting crop areas with certified seeds,” says D.Jaloveckas.
According to D. Jaloveckas, in order to meet the growing demand for certified seed, the company plans to expand its seed production capacity in the near future – currently Dotnuva Baltic owns one of the largest seed processing plants in the Baltic States and has prepared 24 thousand tons of various seeds per year. In May this year, the company registered a new brand Dotnuva Seeds in order to make the seeds prepared in Dotnuva better recognized not only in Lithuania but also in other Baltic countries, and hopes that it will become a standard seed quality in all the Baltic States.
According to various estimations, the market for new agricultural machinery decreased by about a fifth during the reporting period : “This has had an effect on our results – total sales in agricultural machinery business dropped by 5.1%. But we are happy to see that Case IH tractors still continue to occupy a solid second position on the Western tractors market , also , we continue to lead in plough sales with Kvernelanda and have doubled sales of second hand machinery.
According to the head of Dotnuva Baltic, in the first half of the financial year, Baltic farmers have invested more cautiously in the new technology due to adverse weather and reduced European Union support, while in the second half of the year there was a somewhat higher recovery . After two difficult years, the agricultural market is expected to recover in 2019. “Farmers’ investments in advanced machinery and equipment are inevitable, otherwise, farming is not possible”.
In spite of the worse harvest and cautious mood in the market, in the next financial year, the head of the company D. Jaloveckas forecasts a stable growth in the Baltic States. The results will be achieved by investments to increase certified seeds production capacity , development of regional activities and expansion in Latvia.