KTG Agrar reports strong increase in first-half profits
“The second half of the year will be even better”
- Total output up 63.1 percent to EUR 20.5 million
- Net profit almost tripled to EUR 1.1 million
- Cultivable land expanded by 3,500 ha to 21,500 ha
- Earnings to be boosted further in H2
Hamburg, 25 August 2008 – KTG Agrar AG [ISIN: DE000A0DN1J4] reported a successful performance for the first half of 2008. Total output increased by 63.1 percent to EUR 20.5 million, while earnings before interest and taxes (EBIT) climbed 82.1 percent to EUR 2.4 million and net profit surged 174.2 percent to EUR 1.1 million. “We are highly satisfied with this performance. The first six months of a year are usually the weaker period in the agricultural sector. The second half of the year will be even better,” said Wolfgang Bläsi, CFO of KTG Agrar.
As one of Europe’s leading agricultural companies, KTG Agrar benefits from the strong demand for agricultural commodities. Due to the Europe-wide organic food boom, the company’s organic crop unit reported a 65.9 percent increase in total output from EUR 2.8 million to EUR 4.6 million. The Hamburg-based company is the largest European producer of organic grain and organic maize. Total output of the conventional crop unit rose by 57.8 percent from EUR 4.9 million to EUR 7.7 million. The latter unit supplies high-quality grain, maize and rape to direct processors such as mills and muesli producers. With ten biogas plants taken into service by KTG Agrar in the course of last year, total output in this segment soared from EUR 1 million to EUR 5 million. Other activities contributed EUR 3.2 million to the Group’s total output.
Besides its organic growth, KTG Agrar also continued to expand its cultivable land. In the course of only six months, 3,500 hectares in east Germany and Lithuania were added to the company’s portfolio, which now comprises 21,500 hectares. As announced at the time of the IPO, most of the arable land was purchased. As a result, the percentage of company-owned land rose from 15 to 17 percent. In Lithuania alone, KTG Agrar acquired another 750 hectares. This strategy will be continued to allow the company to benefit from rising land prices. KTG Agrar plans to expand its cultivable land significantly in the coming months. Many businesses in Germany’s eastern federal states are forced to address the succession issue and the conditions for leasing and purchasing land are also favourable in Lithuania and other regions. The company thus aims to pass the 25,000 hectares mark in 2009.
KTG Agrar’s target for the full year 2008 is to push ahead its dynamic growth and achieve a strong increase in the EBIT margin. In this respect, the company is fully on target. With most of the costs incurred in the course of the year already accounted for, KTG Agrar expects earnings to rise sharply in the second half of the year. “Everything we harvest and sell now will be almost fully reflected in profits. We therefore feel absolutely comfortable with analysts’ EBIT projections of up to EUR 9.7 million for the full year,” said Siegfried Hofreiter, CEO of KTG Agrar.
KEY FIGURES (HGB)
in EUR k:
H1 08 H1 07
Sales revenues 8,741 5,268
Increase in inventories of finished
goods and work in process
as well as animal assets 5,630 3,232
Other operating income 6,153 4,084
Total output 20,525 12,584
EBIT 2,384 1,309
Net profit 1,071 391