Agrana warns about EBIT plunge

Reasons for unfavourable developments in the markets for Agrana's products are the persistent volatility in raw materials and the powerful rise in energy prices, all of which squeeze profit margins.

Agrana, a Central European sugar and
starch group listed on the Vienna Stock Exchange, has issued a profit
warning projecting a plummet in its operating profit in the 2008/09
financial year. While Agrana continues to expect a “solid revenue
trend" with growth to over EUR 2.1 bn in FY2008/09, its
operating profit outlook is about 45% to 50% lower than in the prior
year," the company warned today.
Agrana has published its
earnings report for the first quarter of FY2008/09, saying the group
achieved revenue growth of 10.3% to EUR 495.1 million in Q1. The
Fruit segment generated the largest revenue share of 42.4%, followed
by the Sugar segment with 34.5% and the Starch segment with 23.2% of
Group revenue.
“The rise in revenue was driven in large part by
expanded capacity and higher selling prices in the Starch business.
The initially expected revenue decrease in the Sugar segment was more
than offset by currency translation gains in Central and Eastern
Europe.
Agrana's consolidated operating profit before exceptional
items contracted by 36% in the first quarter to EUR 18.0 million, as
a consequence of energy price increases, higher corn prices and
strong margin pressure in the Sugar and Starch segments. The Fruit
segment's operating profit was at the year-earlier level.