AB Akola Group Reports Strong Profit Growth in Mid-Year Review
Financial Performance of AB Akola Group
The consolidated revenue for AB Akola Group and its subsidiaries in the first half of the financial year 2024/2025 has surpassed EUR 790 million, marking a 4% increase compared to the same period last year. This financial report highlights an impressive growth trajectory, showcasing the Group’s resilience and adaptability in a competitive environment.
Product Sales and Revenue Growth
During this six-month period, the Group successfully sold 1,634 thousand tons of a variety of products, representing an 11% rise from the previous year’s figures. The increase in sales volume has positively impacted the company's overall performance.
EBITDA and Net Profit Analysis
Consolidated earnings before interest, taxes, depreciation, and amortization (EBITDA) for the first half was reported at EUR 48 million, a 14% rise from last year. Net profit saw a remarkable increase, soaring by 35% to reach EUR 23 million, illustrating the Group's effective management strategies and operational excellence.
Quarterly Performance Highlights
The second quarter of FY 2024/2025 saw the Group's revenue amounting to EUR 406 million, which is a notable 20% increase when compared to EUR 338 million from the previous year. Similarly, gross profit jumped from EUR 30.7 million to EUR 42.4 million, demonstrating strong operational gains.
Segment Performance
In terms of segment performance, 'Partners for Farmers' is a standout, generating over EUR 585 million, which constitutes 74% of the Group's total revenue. Despite a 4% drop in grain and oilseed purchases, the Group managed to increase its sales of cereals by almost 11%, leading to an uptick in revenue from these products.
Production and Market Dynamics
Producing compound feed and premixtures has seen an increase of 10% compared to last year, although the average selling price has dipped by 10%. Meanwhile, revenue from certified seeds, fertilizers, and plant protection products showed a healthy 14% growth, underlining the Group’s strategic investments in these areas.
Agricultural Machinery Market Trends
The agricultural machinery, equipment, and services market has faced challenges, contracting by 11% due to low farm-gate prices and higher borrowing costs. However, the Group’s market share has expanded in harvester and tractor sales across the Baltic region, marking a success in maintaining competitive positioning.
Specialized Segment Insights
The 'Food Production' segment accounted for approximately 27% of total revenue with close to EUR 216 million generated. The poultry segment flourished, with income surging by 12% to EUR 155 million, and gross profit increasing significantly to EUR 30.4 million. This element of the business reflects successful operational upgrades and improved farming efficiency.
Future Production Undertakings
At the end of November, the Group took a significant step by inaugurating a new instant noodles plant, expected to go into full operation in the coming quarters. Additionally, the construction of a new breadcrumbs factory is proceeding according to schedule.
Comprehensive Overview of Agricultural Operations
The Farming segment's revenue stood close to EUR 27 million with a gross profit of EUR 2.6 million. Crop yields experienced a minor setback from unfavorable weather conditions, yet initiatives to enhance efficiency and productivity remain a priority for the Group.
Investments in Innovation and Expansion
The Group is committed to enhancing its product quality and market reach. Focused on organic growth and strategic acquisitions as evidenced by the recent purchase of a pest control company, the Group strengthens its performance in the region while expanding its service offerings.
About AB Akola Group
AB Akola Group stands as the largest agricultural and food production group within the Baltic States, employing over 5,000 individuals across its operations. Integrally involved in the food supply chain, the Group continues to excel in providing various goods and services tailored for the agricultural sector.
For more details, you can reach out to:
AB Akola Group CFO Mažvydas Šileika
Mob. +370 619 19 403
E-mail m.sileika@akolagroup.lt
Frequently Asked Questions
What is the net profit increase for AB Akola Group?
The net profit for AB Akola Group increased by 35% to EUR 23 million in the reported period.
How much revenue did the Group generate in the second quarter?
In the second quarter, the Group generated EUR 406 million in revenue, reflecting a 20% increase from the previous year.
What segment generated the highest revenue for the Group?
The 'Partners for Farmers' segment generated over EUR 585 million, accounting for 74% of the Group's total revenue.
What improvements were made in the poultry segment?
In the poultry segment, income increased by 12% to EUR 155 million, and gross profit surged by 92% to EUR 30.4 million.
What strategic business developments were noted in the report?
The report highlighted the opening of a new instant noodles plant and the ongoing construction of a breadcrumbs factory, underscoring the Group's commitment to innovation.
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