Continental triples first-half profit

Irish-listed agri-business Continental Farmers’ Group reported a 200% year-on-year increase in first-half profits, adding that it expects to exceed its full-year financial targets.

The Ukrainian and Polish crop producer — in which Irish agri-services group Origin Enterprises holds a near 25% stake — said pre-tax profits for the first six months of 2012 amounted to just under €3.5m. This was up 202% on the €1.15m generated in the first half of 2011.

Group revenue for the period was down slightly from €4.4m last year to just under €4.2m, but operating profit was up by nearly €3m to €4.37m and EBITDA (earnings before interest, tax, depreciation, and amortisation) more than doubled to €5.6m. The company also invested more than €8m in expanding its operations over the six months.

Gross profit was up from €4.8m to €8.3m year-on-year, while first-half earnings per share jumped from 1.39c to 2.07c.

The company sells its crops across Eastern Europe, Russia, and the EU. Its main crops are oil seed rape, potatoes, wheat, sugar beet, and maize and the first half of this year saw an annualised rise of 42% in the size of its landbank to 26,100ha.

CFG has been trading since the mid-1990s, initially farming crops in Poland before expanding into Ukraine a decade later. This expansion was accelerated through the raising of €20m of equity funding three years ago, a move which saw Origin becoming a substantial shareholder in the business. The business has a dual share listing on London’s AIM and Dublin’s ESM markets.

The company’s chief executive, Mark Laird, said the 2012 interim results are another milestone in CFG’s journey to be “one of the most efficient and profitable large-scale food producers in Central Europe”.

“The successful completion of the cereal harvest, delivering improved yields under exceptionally difficult climate conditions, whilst significantly increasing our hectares under harvest, underlines the ‘know-how/do-how’ capability that exists within the company.”

CFG is hoping to maximise its earnings’ potential against a background of rising grain commodity prices. Meanwhile, Goodbody Stockbrokers yesterday said that it expects to see a 2.4% increase in earnings per share when Origin issues its full-year financial results tomorrow.