KWS SAAT AG (ISIN: DE0007074007) confirms the increase in the annual forecast for the end of the 2012/2013 fiscal year published on February 11, 2013. In addition to the positive business development in the already expired time for cereal business, there is an especially marked increase in demand for corn seed.
Clear grain and corn growth
The high demand for cereal seed and the inclusion of business activities in Brazil dominated the first half of the 2012/2013 fiscal year. Sales at KWS improved compared to the previous year, from €191.5 million to €206.3 million. For seasonal reasons, the seasonally negative operating result totaled –€59.1 million, after –€31.2 million in the same period of the previous year. In addition to being due to special effects during the previous year, this sharp decline in EBIT is due to the planned expansion of research and development activities and sales.
With regard to individual divisions, KWS posted sales growth Corn segment of 15.9% to €82.9 million in the first half of the financial year, with growth coming from the Brazilian market. The segment result was seasonally negative and amounted to –€44.3 million after –€33.1 million in the previous year. The sharp decline in earnings was primarily attributable to the planned expansion of sales structures.
Sales in the cereals segment KWS also achieved a strong increase in sales of 21.0% to €94.5 million. In particular, the hybrid varieties of rye were sold out. The segment result improved accordingly, from €28.0 million to €37.2 million. Since most of the grain business is carried out during this period, the half-year figures already provide a good indicator of the full-year results.
By contrast, business performance in the first half of the year sugarbeet segment is not yet an indication for the full year, as sugarbeet sowing only takes place in the spring. Sales in the first half of the year are based on early orders from customers, which can vary greatly from year to year. Sugarbeet sales were €25.5 million in the reporting period. Segment results amounted to –€29.1 million for the half-year end. In the previous year it had been –€6.7 million, although the previous year’s result was positively influenced by special effects, to the amount of around €10 million.
Forecast: Another profitable year
Following the increase in the KWS Group forecast for the 2012/2013 fiscal year, KWS anticipates Group sales to grow by just over 15% to €1.140 billion. Due to an increase in demand for corn and cereals, already visible at this time in the fiscal year, growth will be achieved, especially in these corporate segments. KWS now expects the operating result (EBIT) to reach the previous year’s level of €140 million. The EBIT margin is expected to be just over 12%.
“Our grain business is developing particularly well. Here, for the first time, we will exceed a sales volume of €100 million. We will also reach this mark in our North American sugarbeet business—a success story for our genetically improved varieties,” explained Dr. Hagen Duenbostel.