AUGA Group Reports Positive Growth in H1 2024 Financials
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AUGA Group's Financial Performance in H1 2024
In the first half of 2024, AUGA Group, AB and its subsidiaries (the Group) reported a sales revenue of EUR 34.67 million, a slight decrease from EUR 37.28 million during the same timeframe in 2023. Despite this decline in overall revenue, certain performance metrics saw significant improvements.
Gross Profit and EBITDA Growth
During this period, the Group achieved a gross profit of EUR 3.45 million, a notable increase compared to EUR 1.80 million recorded in the previous year. Additionally, the EBITDA climbed to EUR 6.43 million, up from EUR 3.57 million a year earlier, demonstrating the Group's ability to enhance operational efficiency and strategic focus.
Management Insights on Operational Focus
K?stutis Juš?ius, the Chair of the Board of AUGA Group, expressed satisfaction with the growth trajectory, especially noting the dairy segment’s outstanding performance. He stated, "Our primary objective this year has been to optimize our operations and steadily improve efficiency. We have critically assessed the agricultural units and have effectively minimized the number of loss incurring farmland plots while also successfully reducing operating costs."
Analysis of Segment Performance
The Group's financial results can be further dissected by reviewing specific segments, including crop growing, dairy, mushroom growing, and fast-moving consumer goods (FMCG).
Crop Growing Segment Overview
In the crop growing segment, total revenue in the first half of 2024 amounted to EUR 9.42 million, reflecting a drop from EUR 13.74 million in 2023. This decrease was attributed primarily to the sale of residual harvest remnants from the prior year. Conversely, gross profit from agricultural sales, changes in biological assets’ fair values, and subsidies was reported at EUR 1.52 million, up from EUR 1.25 million in the same period last year.
Dairy Segment Progress
The dairy segment stood out with improved results. The average milk yields increased by 7% compared to the previous year, while the cost per tonne of raw milk production decreased by 16%. The sales revenue in this segment experienced growth of 7%, totaling EUR 8.33 million compared to EUR 7.77 million in the first half of 2023. Notably, the dairy segment generated a gross profit of EUR 0.86 million, a remarkable turnaround from a gross loss of EUR 0.14 million reported in the previous year.
Continued Improvement in Production Costs
The Group anticipates further reductions in production costs in the near term, which are expected to boost the segment’s overall results. Starting in the third quarter, dairy farms will utilize new, more affordable feed that will help streamline costs.
Mushroom Growing Segment Stability
The financial results from the mushroom growing segment remained stable, with sales revenue reaching EUR 15.49 million in the first half of 2024, slightly up from EUR 15.28 million a year earlier. The cost of sales saw a 2% uptick, which was offset by an 8% rise in selling prices, leading to a gross profit of EUR 0.94 million, compared to EUR 1.00 million in 2023.
FMCG Segment Growth
As for the FMCG segment, it reported sales of EUR 1.42 million in the first half of 2024, a significant increase from EUR 0.49 million noted in the same period last year, excluding previous operating results from a sold entity. This moderate growth trend is fueled by the Group's strategic efforts to expand its sales distribution and channels, enabling better operational profitability.
Operational Cost Management
The Group has committed to reducing operating costs effectively, recording a 16% decrease in the first half of 2024, bringing these costs down to EUR 5.53 million from EUR 6.56 million a year ago. Strategic operational adjustments have greatly contributed to this favorable outcome.
Strategic Implementation for Future Growth
At the start of 2024, the Group announced it would refine its agricultural economic units to improve financial outcomes. After a thorough evaluation of farm performance and cultivated land efficiency, it has decided to halt operations on 3,300 hectares managed by a cooperative company. Additionally, operations on 432 hectares of unproductive land are being cut back. This deliberate reduction is expected to enhance overall results and lessen the requirement for working capital.
Investor Resources and Contact Information
To better support investors' analysis of the Group's performance, historical financial data, including recent reports, are accessible online. They can view this information in MS Excel format on the Group's investor portal. For further inquiries, Kristupas Baranauskas, the CFO of AUGA Group, can be reached at +370 5 233 5340.
Frequently Asked Questions
What were AUGA Group's sales revenues in H1 2024?
The sales revenue for AUGA Group in the first half of 2024 was EUR 34.67 million.
How did AUGA Group's gross profit change in 2024?
The gross profit rose to EUR 3.45 million in H1 2024, significantly improving from EUR 1.80 million in the previous year.
What segments performed well for AUGA Group in H1 2024?
The dairy segment showed noteworthy growth, with improved yields and reduced production costs.
What strategies is AUGA Group implementing to reduce costs?
AUGA Group is actively assessing and streamlining its agricultural operations, reducing unproductive farmland, and focusing on optimizing their economic units.
How can I access AUGA Group's financial data?
Investors can access historical financial data, including for the latest reporting period, on AUGA Group's website in MS Excel format.
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