Romanian agribusiness group sees steep profit drop in H1 2023 because of volatile market
Agricover Holding, the biggest agribusiness group in Romania, recorded a steep drop in net profit in the first half of 2023 compared with the same period of 2022, from RON 55 mln to RON 0.89 mln. The operating profit also went down almost ten times, from RON 72 mln to RON 7.5 mln.
The group's bottom line was negatively impacted by the results of the Agribusiness division (Agricover Distribution), which recorded 20% lower revenues (RON 1.06 bln) and an operating loss of RON 36.3 mln for the first six months of this year.
"The decrease in revenues was caused by a sharp drop in the trading price of some agricultural inputs, mainly crop nutrition products. The circumstances that led to the losses incurred during the first six months have been contained and will no longer impact the results of the second half of the year," the group said in a press release.
Meanwhile, Agricover Credit IFN, the group's Agrifinance division, strengthened its position in the local agricultural financing market and increased its loan portfolio by 13.9% to RON 2.96 bln. The profit before tax achieved by the Agrifinance segment in the first half of 2023 was RON 57.46 mln, 52.8% higher than in the first six months of 2022.
The number of farmers using the group's services reached a high record of 10,587, up by 6.4% in June 2023 compared to December 2022.
"This summer, we are closing a 12-month cycle of extreme contextual volatility. Nevertheless, the outlook for the next 6 months appears unsurprising and gives us confidence that our decision to prioritise the needs of the farmers will strengthen our reputation as a stable and trustworthy business partner," said Liviu Dobre, CEO of Agricover Holding.
(Photo source: the company)