Origin Enterprises shares tank on profit warning
Shares in Irish agri-services group Origin Enterprises slumped near to 10% after it warned operating profits for its financial year are likely to be negatively impacted by prolonged poor weather conditions.
Origin’s crop technology service business stretches across Ireland, the UK, eastern Europe and South America. The company says that the traditionally quieter first half of its financial year had started slower even by its standards.
First-quarter revenues covering the three months to the end of October came in at €371.2m nearly 14% down on a year-on-year basis.
“Prolonged unseasonal weather conditions have resulted in a lower planted area for autumn and winter crops relative to a normal year”, Origin said, with the biggest negative impact being felt in its operations in the UK and Romania.
It said farmers and growers in Ireland had also experienced highly challenging operating conditions during the quarter.
Revenues in the Ireland and UK division fell over 23%, year-on-year, to just under €200m.
Origin said a reduced level of autumn plantings coupled with an anticipated higher level of spring plantings mean full-year operating profit “is expected to be negatively impacted”.
Origin’s shares are already down over 26.5% over the past 12 months.
“The challenging weather conditions experienced by farmers and growers in the first quarter is expected to lead to a higher concentration of sales demand in the second half and an increased level of seasonality overall in the 2020 financial year,” Origin said.
