„Revenue of 811,031 thousand RON (806,446 thousand RON revenue of the Agribusiness segment plus 4,585 thousand RON revenue from sales of drones including in Other operating segment gross margin above) generated by the Group were 24% lower in the first six months of 2024 compared to the same period of 2023. The decrease was mainly due to lower prices for crop nutrition products, as well as to lower quantities sold,” mentions the company.
Cost of sales incurred by the Agribusiness segment decreased more than revenue, with costs incurred during the first half of 2024 being 27% lower as compared to the same period of 2023. The segment’s gross profit margin turned positive, reaching 2.3% during the first half of 2024, up from -1.7% for the first six months of 2023.
The increase in operating expenses is mainly due to the additional taxation incurred following the minimum tax of 1% of revenue imposed by the government starting financial year 2024 on all companies with revenues higher than 50 million EUR, irrespective of their profitability. Other operational costs mostly decreased starting with the end of 2023 and first months of 2024, as management successfully implemented cost control initiatives focused mainly on the Agribusiness segment.
„The Group’s operating profit increase was mainly impacted by improved operating results of the Agribusiness segment. In the first half of 2024 the consolidated operating profit exceeded 40 million RON, vs. 7.5 million RON in the same period of 2023”.
The increase in total assets by 502,380 thousand RON as at 30 June 2024 compared to 31 December 2023 was led the sharp increase in trade and other receivables and loans and advances to customers, mainly due to the seasonality impact (whereby loans and receivables have payment terms matching the harvesting seasons). Generally, these two financial assets peak in June or July and are collected in the second part of the financial year (as main crops are harvested and sold).
Trade receivables are generally financed through similar agreements with suppliers (trade payables are also peaking around this period) and, where not possible or more costly for the Group, through bank loans (which follow the same seasonality). The 32% increase in total inventories is due to the increase of crop protection products inventories.
Inventories of crop protection products stayed high, driven by seasonality (higher acquisitions are made in June in preparation for the autumn campaign). The 14% increase in loans and advances to customers was mainly driven by both: i) the increase in the number of clients serviced (6.2% increase versus June 2023); and ii) the increase in the average exposure per customer (7.1% increase versus June 2023).
(English version by Catalina Apostoiu)