VIENNA, AUSTRIA — AGRANA Beteiligungs-AG said on Oct. 10 that operating profit before exceptional items for the first half of 2013-14 was €108 million ($243 million), a drop of 24% from the prior year’s record result of €142.5 million.

Group revenue increased from €1.603 billion to €1.674 billion, the company said. 

“While higher raw material prices in the Sugar and Starch segments detracted from earnings, the Fruit segment's operating profit grew by 75%,” said Johann Marihart, chief executive officer of AGRANA Beteiligungs-AG.

After the group’s net financial items expense of €15.4 million and a tax expense of €23.4 million (corresponding to a tax rate of 25.3%), group profit for the period was €69.2 million. Net debt at Aug. 31 stood at €397.8 million, down significantly by €85.9 million from the 2012-13 financial year-end level of €483.7 million. 

Total assets eased slightly compared with Feb. 28 to €2.44 billion, and the equity ratio rose from 47% to 49.8%. The gearing ratio at the quarterly balance sheet date was 32.8% and thus better than from Feb. 28 (39.9%).

Revenue of the Starch segment in the first half of 2013-14 was €443.6 million, representing growth of 12.1% from the year-ago level of €395.7 million. 

The growth was driven by higher selling prices and volumes. The intense competition did not allow the increase in raw material costs to be recouped through sales prices, the segment's pre-exceptionals operating profit of €26.3 million was down substantially from the prior-year value of €46.5 million. As well, the commissioning of the wheat starch plant in Pischelsdorf, Austria, entailed the expected start-up losses. The decrease in earnings combined with higher revenue meant a contraction in operating margin to 5.9%.

For the full 2013-14 financial year, AGRANA continues to expect a slight increase in group revenue, driven primarily by sales volume growth. In view of the results for the year to date, operating profit before exceptional items will be less than in the last two record years.