Wet weather and sanctions hit profits at major agronomy firm

Challenging growing conditions in the past year have affected not only farmers but the wider agricultural industry, including one of the UK’s major agronomy firms.

Origin Enterprises, the parent company of Agrii, said profit before tax declined by 12.8% to €71.3m (£60m) for the year ending 31 July.

In the UK and Ireland, Origin made an operating profit of €39m (£32.6m), down 17% on the year, while revenue was down 20% at €1.2bn (£1bn).

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Adverse weather conditions were named as the primary driver behind these declines.

The company’s preliminary results said the performance of its agronomy services was affected by difficult weather and in-field conditions that saw an 8.5% reduction in the overall planted area to 3.9m hectares.

Origin’s chief executive, Sean Coyle, said reduced profits were driven by the UK market, which experienced a smaller planted area and delayed on-farm activity as a result of challenging early season conditions.

“To ensure the business is better aligned to the future margin opportunity, we had to take the difficult decision to reduce staff numbers in our UK agronomy business,” he said.

“Our animal feed joint ventures in Ireland delivered strong results, largely as a result of the increased demand for feed due to the poor weather.”

The company had a working capital outflow of €62.9m (£52.6m) during the year, which related to a combination of sanction payments and higher debt as a result of delayed applications due to the weather.

A company spokesman told Farmers Weekly that a payment of €37.5m (£31.4m) related to outstanding supplier amounts suspended in accordance with international sanctions imposed in response to the Russian invasion of Ukraine in 2022.

He added: “The group continues to closely monitor the situation with regard to sanctions and act accordingly.”

Expansion

Origin Enterprises acquired two specialist ecology consultancies, Avian Ecology and Bowland Ecology, earlier in September, to join its Living Landscapes division.

TJ Kelly, divisional managing director of Living Landscapes, said the acquisitions would complement its existing Neo Environmental and Keystone Environmental businesses.