Origin sales top €1bn but earnings decline

ANIMAL feed and food group Origin Enterprises in its nine-month trading update says earnings and sales had declined. While sales topped €1 billion they were off 11.5% on the same period last year.

The group is majority owned by Aryzta, with a 71% stake.

Earnings over the period, measured by earnings before interest, tax, depreciation and amortisation, were down 3.1%. That fall masks a much stronger performance in the third quarter of the trading year, which showed an 11.1% gain on the same period the previous year.

Origin shares fell 3.9% yesterday in Dublin to €2.20.

The group said the figures are in line with its expectations for the 2010 financial year to date.

The strong showing in the third quarter reflects the increasing reliance by the group in the out-turn generated by the sector in the second half of the year, it said.

That third quarter uplift reflects the more “pronounced seasonality” of the group’s activities, outlined by Origin when it published its interim results.

Origin said trading conditions in its food business remained very competitive. It said Masstock was performing well in its agri-nutrition business. The company said the environment for farming remained tough, but there had been a recovery in some markets.

Sales heavily reliant on the state of farming and on global food markets are showing some signs of picking up the company said.

“While the environment for farming continues to remain challenging, the recent tangible recovery in key output markets is providing a welcome boost to sentiment and cash flow for primary producers,” it said.

Activities include animal feed ingredients, integrated agronomy services – provided by Masstock, fertilisers and marine proteins and oils.

Its food division, consisting of Shamrock Foods and the Odlums Group, saw its sales fall from €226.7m to just over €200m.

While as previously advised, competition is intense in the sector, the group continues to maintain market leadership across its range of goods.