International agri-services group Origin Enterprises has reported higher revenues for the three months to the end of October and said it was well positioned to build on the momentum of its first fiscal quarter.
In a trading update ahead of its AGM today, Origin Enterprises said its group revenues rose by 3.6% for the quarter to €486.5m, with revenue growth across both Agriculture (2%) and Living Landscapes (21.5%).
Origin Enterprises said that Agriculture volumes (excluding crop marketing) were ahead of the same time last year, with good growth in Ireland and the UK, Latin America and Romania, partially offset by lower activity in Poland.
It noted that early planting has progressed well in all key markets and earlier sown crops are now well established.
Origin said its total planted area for winter crops is expected to increase, including a slightly larger UK winter wheat area of about 1.72 million hectares, compared to 1.65 million hectares planted last year.
It said the UK recorded its earliest harvest in almost two decades this year. Early field clearance and dry autumn conditions supported an accelerated start to drilling and good crop establishment across most regions, it added.
"Following lower yields in recent harvests and pressure on grain and oilseed prices, growers are adopting a disciplined approach to input spend, prioritising proven, cost-effective agronomic solutions. Improved planting progress and early crop development provide a solid platform for the year ahead," the company said.
Origin said that business-to-business fertiliser volumes were marginally ahead on last year, supported by low levels of inventory on-farm and at merchant level.
"A solid order book, increased UK winter cropping and firming of raw material pricing have contributed toward a positive near-term demand outlook, despite output pricing pressures, as growers adopt a just-in-time approach to purchasing fertiliser," it said.
It added that raw material prices have increased year-on-year, and are expected to remain "firm" during the second quarter ahead of the key spring application season.
But its Feed Ingredients revenue was marginally lower year-on-year, reflecting reduced market prices for feed raw materials.Volumes remained broadly in line with the prior year, supported by steady underlying demand across protein markets.
Meanwhile, its Living Landscape division saw a strong start to the year, with revenues jumping by 21.5% on the back of organic growth and the benefit of recent acquisitions.
It said that revenue growth was achieved across all sectors of the business - Sports, Landscapes and Environmental. Performance in Sports and Landscapes was mainly driven by organic growth, due to sustained customer demand and continued expansion of its market reach, while performance in Environmental continues to benefit from acquisitions made last year.
Sean Coyle, Origin's chief executive, said the group delivered a positive start to the year.
"Subdued grain and oilseed prices are prompting farmers to adopt more disciplined input strategies, aligning purchasing more tightly with near-term on-farm requirements," the CEO said.
"In Agriculture, increased winter cropping areas in the UK and Romania together with continued progress in Latin America underpinned our Q1 performance and provide a solid foundation for the year ahead," he said.
"Consistent with our strategy for Living Landscapes to be a key pillar of the company's future growth, the division maintained its strong momentum, delivering double-digit revenue growth in the period, driven by organic expansion and recent acquisitions," he said.
"Overall, the group is well positioned to build on Q1 momentum, underpinned by a clear strategy, strong customer relationships, and a focus on long-term growth," he added.
