With operating profit of € 158.4 million before adjustments (compared to € 86.5 million in the prior year), despite an external environment of multiple crises, we closed an extraordinary 2022|23 financial year better than expected. Operating profit (EBIT) rose from € 24.7 million to € 88.3 million. Once again, our diversified, sustainable business model thus proved a stabilising influence in turbulent times.
The war in Ukraine has brought much change in our day-to-day operations (and daily lives), and also a new level of unpredictability in the markets. Rising raw material costs and energy prices were only two of the many major challenges we confronted last year. In order to nevertheless meet our goals, we asked a great deal from our employees at all levels and in every area – ranging from production to customer-facing positions, and from the IT back office to the development laboratory. We are also grateful to our commercial partners for their understanding when sales price negotiations, for example, involved more points of discussion than in the past. Inflation is an issue that affects everyone in the value chain, and before we adjust our selling prices, we naturally strive to make the fullest use of all internal efficiencies.
High ethanol prices in the first half of 2022|23 and a flourishing wheat gluten business were the main reasons for a robust 2022|23 earnings performance in the Starch segment. The Sugar segment achieved its turnaround in the year under review. In this business area, as you know, the market environment has been completely changed ever since the end of the sugar quotas in September 2017, with many new challenges. AGRANA has stood by this segment even in difficult times and has taken numerous measures over the past five years to put it back on track – work that began to pay off in 2022|23.
In the Fruit segment, we are glad above all to report that our colleagues in Ukraine are thus far physically unharmed by the war. It is also a real accomplishment that, in the 2022|23 financial year, despite the military conflict, capacity utilisation in the Ukrainian fruit plants was able to be maintained around the 50% mark. In the fruit juice concentrate activities, the good volume of the 2022 apple campaign together with development gains in the value-added business were top drivers of a strong earnings performance.
An impairment test required at 31 August 2022, however, resulted in the recognition of impairment on assets and goodwill in our Fruit cash generating unit. This write-down of € 91.1 million – an exceptional item attributable indirectly to the Ukraine war and directly to steeply rising capital costs – was not a cash expense, but was responsible for the posting of an operating loss (negative EBIT) for the Fruit segment.
In our outlook for 2023|24, we expect the Group’s EBIT to be very significantly higher than for the 2022|23 financial year. Keys to success – including in achieving this goal – will be flexibility, exploitation of all potential for productivity gains, and effective price negotiations in purchasing and sales. Risk factors for the outlook remain the war in Ukraine and all its consequences, such as record inflation and rising interest rates.
In keeping with our focus on long-term profitable growth and our commitment to dividend continuity – and despite the further impairment expenses incurred in the financial year just ended – we would like to pay you, our esteemed shareholders, a solid dividend for 2022|23.
The Management Board of AGRANA Beteiligungs-AG
