International agri-services group Origin Enterprises has reported higher revenues for the year to the end of July as it announced the "difficult" decision to close its Ukraine business at the end of this month.
"This decision was taken after much deliberation, given the reduced activity levels and the market dynamics over recent years which have resulted in the business being loss making, with little evidence that the trading environment will improve," the company said.
Origin Enterprises said its revenues rose by 4.9% to €2.5 billion, but the company's pre-tax profits dropped by 29% to €81.87m from €115.5m last year.
Its operating profit came to €90.8m, a fall of 24.2% on the operating profit of €119.7m the previous year due to strong commodity prices and highly volatile trading conditions.
But excluding the results in the year to July 2022, the company said this year's operating profit exceeds the previous best of the group with increases recorded in Continental Europe and Latin America.
These were offset with the expected reduced contribution from Ireland and the UK, it added.
Origin Enterprises said its directors are proposing a final dividend of 13.65 cent per ordinary share. This will bring the total dividend payment for the year to 16.80 cent, an increase of 5%.
On its decision to leave Ukraine, the company said the business there had experienced a number of challenges, most recently as a result of the war with reduced activity levels in relation to on-farm liquidity.
It said a volatile trading environment and challenging market dynamics have resulted in the business being loss making over a number of years, with little evidence that the trading environment will improve post war.
The chief executive of Origin Enterprises, Sean Coyle, said the company delivered a strong overall performance in declining commodity markets.
"Effective operational execution helped deliver a robust cash performance with a net cash position of €53.2m at year end. This result was driven by a strong free cash flow of €104.4m which included a working capital inflow of €43.9m, as fertiliser raw materials and feed prices decreased globally, combined with favourable timing impacts of purchases and sales," Mr Coyle said.
Mr Coyle said the company made strong progress against a number of its strategic objectives with four acquisitions, totalling €30.1m, in its Amenity, Environmental and Ecology business.
"These acquisitions complement our organic growth strategy and broaden our expertise and capabilities in the growing market for ecological and environmental products and services," the CEO said.
"Thanks to the continued dedication of all our staff, we continue to drive sustainable growth and are on track to deliver our strategic ambitions as set out in our 2022 Capital Markets Day. We will continue to invest for growth across our existing operations and strengthen our earnings potential through margin accretive acquisitions," he added.
Shares in the company moved higher in Dublin trade today.
