26th Feb 2020 09:22
(Alliance News) - Agriculture service Origin Enterprises PLC on Wednesday reduced its full-year guidance after being hurt by "prolonged and challenging weather conditions" in the UK and Ireland.
Shares in the Dublin-based company were 11% lower at EUR3.15 each in London on Wednesday morning.
Origin said that the total area for winter crops will be 40% lower year-on-year, due to heavy rainfall between December and February.
Origin added that it now expects full-year operating profit and adjusted diluted earnings per share to be "significantly below the current range of analysts estimates".
The company had previously warned on crop areas. In November it said the total area would be 25% lower but has now been forced to lower guidance further, with rainfall in the UK and Ireland persisting.
"Autumn/winter rainfall has been at its highest level in 30 years, with more than double the number of continuous days rainfall compared to the prior year and the fifth wettest on record. It is anticipated that a greater area will now transfer to spring cropping, with a consequential lower investment spend by farmers and growers on agronomy services and crop inputs," Origin said.
"With the extent of the shortfall in winter cropping in addition to the poor establishment of already sown crops, the total planted area for the 2020 financial year is expected to be circa 10% lower year on year, compared to the anticipated 2% reduction."
Elsewhere, the company expects full-year sales and operating profit growth in Continental Europe, where "the season has progressed well".
"Our Latin American division had a good start to the year, delivering underlying volume growth against lower market demand due to a delayed Brazilian soybean planting season. Operating profit in this division is expected to grow year-on-year," Origin added.
By Eric Cunha; [email protected]
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