05.11.2015
BayWa AG DE0005194062
DGAP-News: BayWa AG: International business bolsters third quarter - BayWa makes substantial gain
DGAP-News: BayWa AG / Key word(s): 9-month figures
BayWa AG: International business bolsters third quarter - BayWa makes
substantial gain
05.11.2015 / 10:30
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International business bolsters third quarter - BayWa makes substantial
gains
BayWa AG has generated significant growth in its EBIT (earnings before
interest and tax) of roughly EUR35 million since the close of the first
half of 2015. EBIT rose year on year to EUR75.3 million (2014: EUR74.5
million) in the first nine months of 2015. Revenues came in at EUR11.1
billion, falling only marginally short of the previous year's figure (2014:
EUR11.4 billion), primarily due to price trends.
The Group's positive development in the third quarter was predominantly
driven by the international business of the Agriculture segment and
renewable energies, which evened out the effects of problematic framework
conditions in national agricultural trade in the same period. "Especially
those times in which we experience a difficult situation in agriculture in
Germany show how important our international growth strategy of recent
years is. We are only able to post these kinds of results after the first
nine months of the year thanks to the good results in international grain
trading and the outstanding development in European and US renewable
energies project development business," the Chief Executive Officer of
BayWa AG, Klaus Josef Lutz, explained. According to Lutz, 6 major solar and
wind power projects, with a total output of 114.5 megawatts, were
successfully sold in the third quarter alone. The fruit trading result also
rose year on year, above all on account of growth at New Zealand Group
company T & G Global Limited and its subsidiaries. International grain
trading activities, in particular the Dutch subsidiary Cefetra B.V.,
capitalised on their opportunities and expanded their feedstuff business.
By contrast, grain trading in Germany suffered from the effects of the hot
summer and the extremely volatile price trends. For example, income from
grain drying services usually performed by BayWa on behalf of farmers was
almost completely absent due to the extremely high temperatures. On the
other hand, additional costs were incurred in grain transportation due to
high low-water premiums. Grain prices were much higher at the start of the
harvest than they were at the end, which meant that farmers sold less grain
and processing companies held back on their buying activities. "General
issues in agriculture, such as the abolition of the milk quota, dampened
sentiment in the industry even further," Lutz explained. "For BayWa, this
means that we are intensifying our efforts to adjust to the structural
changes here by concentrating our site network further, for example. What
is more, we will continue to expand our international trade and export
activities, including the planned development to turn Mukran on the Baltic
coast into a deep water port," the Chief Executive Officer said, before
adding that grain trading markets are becoming increasingly volatile and
therefore harder to predict. A slight rise in grain prices recently
bolstered international trade and stimulated German farmers' willingness to
sell their grain, but the outlook for the year as a whole still must be
more cautious than it was before the harvest. "We intend to come up to our
full-year earnings in 2015 at the same level as the previous year, at the
least," Lutz added.
Agriculture: International business performs well - hot summer and volatile
prices hit grain trading in Germany
Revenues in the Agriculture Segment, which comprises trading in
agricultural operating resources and produce as well as the Agricultural
Equipment and Fruit business units, came to EUR7.69 billion as at 30
September 2015 (2014: EUR7.70 billion). EBIT after the first nine months of
2015 stood at EUR63.9 million (2014: EUR69.8 million).
The primary reason for the dip in EBIT was the situation in the German
agricultural trade. As an example, the hot summer weather almost completely
eliminated the need to dry out grain after the harvest, which led to
corresponding loss of income in core BayWa regions. In addition, this
year's corn harvest was significantly poorer than the previous year,
particularly in Bavaria, resulting in a corresponding reduction in
marketing volume for BayWa. All in all, farmers' willingness to sell their
grain dropped significantly, and processors held back on their purchases in
anticipation of a further fall in prices, as the price trend was strongly
downward-facing until the end of September. Prices, and therefore also
sales and demand, did not rise again until the start of the fourth quarter.
Sales of crop protection products were also impacted by the dry summer
weather. Sales of fertilisers, on the other hand, rose due to falling
prices, and seed business continued to experience stable development.
BayWa's international Group companies in the agricultural trade business
also performed well in operating terms. Amongst other things, new sales
channels were opened up in North Africa and the Arab world, which are set
to benefit BayWa moving forward.
Excellent development was also observed in fruit trading. Revenues after
the first nine months of 2015 stood at EUR473.7 million (2014: EUR432.7
million). EBIT came to EUR22.1 million (2014: EUR15.9 million), which
equates to a rise of 38.6%. In terms of international fruit business, the
Group benefited from the activities and acquisitions of New Zealand
subsidiary T & G Global Limited. German fruit trading was more stable than
in the previous year thanks to the slight rise in apple prices, and so it
is expected that the positive will continue in the current marketing
season.
BayWa's agricultural equipment business once again bucked the market trend
in the third quarter, as was the case in the first half of 2015. The
agricultural equipment markets in Germany and in Europe were impacted by
sharp falls in sales figures of up to 10%. Despite the year-on-year rise in
the sales of used equipment, the Agricultural Equipment business unit was
unable to escape the market trend completely and generated revenues of
EUR966.7 million (2014: EUR971.9 million) and EBIT of EUR9.1 million (2014:
EUR13.6 million). The increased pressure on margins in new machinery sales
and the rise in personnel costs after adjustments to collective bargaining
agreements were two key factors here. The leading industry trade fair
Agritechnica, which is due to open its doors in a couple of days, is
expected to stimulate demand for tractors and agricultural machinery.
Energy: Conventional energy and renewable energies exceed 2014 figures
The Energy Segment developed extremely positively in the period leading up
to 30 September 2015. It comprises the Group's trading activities in fossil
and renewable heating fuels, fuels and lubricants as well as its business
in renewable energies. Revenues fell slightly to just under EUR2.3 billion
on account of the lower price level for heating oil (2014: EUR2.5 billion),
but EBIT increased compared to the same period in the previous year by
35.1% to EUR33.1 million (2014: EUR24.5 million).
Revenues with conventional energy carriers stood at EUR1.7 billion in the
first nine months of the financial year (2014: EUR2.0 billion). The decline
in revenues was primarily due to the extremely low oil price. This also
bolstered demand for heating oil and led to a 5% increase in sales. EBIT
benefited from this to the same extent as it did from increased margins in
German sales regions and the positive development of the Austrian Group
company. It climbed to just under EUR7.5 million (2014: EUR4.0 million).
Revenues and EBIT in the renewable energies business developed extremely
well thanks to the sale of major wind and solar power projects as planned.
As at 30 September 2015, BayWa r.e.'s business activities generated
revenues of EUR580.9 million (2014: EUR463.9 million). EBIT increased to
EUR25.6 million (2014: EUR20.5 million). This equates to a 25.3% rise year
on year, even though photovoltaic (PV) component trading in Europe (with
the exception of Switzerland) continued to decline, unlike business in the
US. The sale of an 80 megawatt wind park in the US, BayWa r.e.'s largest
wind park project to date, accounted for the lion's share of this positive
result. Further plant sales are planned in the final quarter, meaning that
BayWa r.e. is very likely to exceed the 2014 result by the end of 2015.
Building Materials: Low heating-oil price delays renovation and
modernisation measures
The Building Materials Segment, which primarily encompasses the Group's
building materials activities in Germany and Austria, was unable to make up
the weather-related sales shortfall from the first half of the year.
Revenues stood at approximately EUR1.1 billion as at 30 September 2015
(2014: EUR1.2 billion). EBIT came to EUR13.6 million (2014: EUR17.1
million). This was due to ailing demand, particularly for the
energy-efficient renovation of detached and semi-detached homes, which is
unpopular among consumers due to the withdrawal of subsidies by the
government and the low oil prices, resulting in the frequent postponement
of construction measures.
BayWa expects business to pick up as a result of the publicly funded
"10,000 Homes" programme in Bavaria for innovative building and heating
systems, and as a result of an increase in demand for redevelopment in
detached and semi-detached homes with the onset of winter.
Contact:
Marion Danneboom, BayWa AG, Head of PR/Corporate Communications,
tel. +49 (0)89/92 22-36 80, Fax +49 (0)89/92 22-36 98,
e-mail: [email protected]
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05.11.2015 Dissemination of a Corporate News, transmitted by DGAP - a
service of EQS Group AG.
The issuer is solely responsible for the content of this announcement.
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Language: English
Company: BayWa AG
Arabellastraße 4
81925 München
Germany
Phone: 089/ 9222-3691
Fax: 089/ 9222-3698
E-mail: [email protected]
Internet: www.baywa.de
ISIN: DE0005194062, DE0005194005,
WKN: 519406, 519400,
Indices: SDAX
Listed: Regulated Market in Frankfurt (Prime Standard), Munich;
Regulated Unofficial Market in Berlin, Dusseldorf,
Hamburg, Hanover, Stuttgart
End of News DGAP News Service
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409091 05.11.2015
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