KWS SAAT AG – higher sales from good winter cereal and rapeseed business
Forecast for the whole of fiscal 2007/2008 confirmed: net sales expected to increase slightly, outstanding earnings of previous year to be matched
(Einbeck, February 28, 2008/No.7/gf) – KWS SAAT AG (ISIN: DE 0007074007) operates in an industry with a highly seasonal nature. As a result, the company generates only about 20 percent of its total revenue in the first half of the fiscal year (July 1 to June 30). The main contributors to sales – corn and sugarbeet – will not be sown until the spring of 2008. This, coupled with the fact that costs are incurred relatively evenly over the fiscal year, means that negative income in the first six months is typical at KWS. It is not possible to extrapolate sales or earnings performance to deduce figures for the fiscal year as a whole.
At December 31, 2007, KWS increased its net sales to €110.3 (91.4) million. This strong level of business came on the back of growing sales of winter cereals and rapeseed varieties. High prices and the cessation of set-aside induced farmers to grow more wheat, rye and barley. There was also greater demand for rapeseed. Despite a reduction in cultivation area for it in the EU, KWS grew its sales in this product segment by winning market share.
Although sales grew, the higher cost of sales meant that operating income was virtually unchanged at € –45.6 (–44.7) million. Seed production costs increased in line with consumer prices. In addition, the company has lastingly boosted breeding activities – in particular for energy plants – and launched extensive projects relating to brand management. Net cash from operations improved by €7.1 million, while cash and cash equivalents increased to €91.9 (69.5) million.
Sugarbeet seed business in the EU will decline as expected in the 2008 sowing season. KWS intends to compensate for this by increasing net sales in non-European markets. Despite the negative impact of the weak US dollar, the Executive Board forecasts that the corn and cereals segments will post slight growth in net sales and increase their income. However, this will be offset by higher breeding costs. Overall, the KWS Group anticipates a slight growth in net sales in fiscal year 2007/2008
(previous year: €538 million) and stable operating income (previous year: €63.9 million).
The individual product segments:
|
In million € |
H1 / |
H1 previous year |
change (%) |
|
Consolidated net sales |
110.3 |
91.4 |
+20.7 |
|
Sugarbeet |
21.4 |
22.8 |
-6.1 |
|
Corn |
30.5 |
23.0 |
+32.6 |
|
Cereals |
54.8 |
42.8 |
+28.0 |
|
Breeding & services |
3.6 |
2.8 |
+28.6 |
|
Consolidated operating income |
-45.6 |
-44.7 |
-2.0 |
|
Consolidated net income for the period |
-25.1 |
-22.3 |
-12.6 |
|
Net cash from operating activities |
18.5 |
11.4 |
+62.3 |
Download: Q2 Semiannual Report of the KWS Group 2007/2008
Contact:
Georg Folttmann
Phone: +49 (0)55 61 / 311-640
g.folttmann@kws.com
