Press

The AGRANA Group was able to increase revenues by 67.3 percent over the comparable prior year period to € 472.0 million for the first quarter of the current financial year (March 1 to May 31, 2006).

Income from operations rose to € 35.1 million (Q1 2005|06: € 18.4 million). Net profit increased from € 14.7 million in first quarter of the prior year to € 20.5 million for the first quarter of 2006|07.

The development of business during the first quarter of 2006|07 reflects the steady growth of the AGRANA Group in the Fruit Segment.

“On the one hand, the improvement in revenues and earnings was due to the full consolidation of the Atys Group and the DSF fruit preparations business in Germany.
On the other hand, AGRANA was also able to significantly increase sales volumes in the Sugar Segment through additional exports at high world market prices.
The development of the Starch Segment was satisfactory, but results were affected by lower isoglucose prices“, commented AGRANA CEO Johann Marihart on the first quarter of 2006|07.

 

Revenues by segment are as follows:

 

Net financial expense for the first quarter of 2006|07 totaled minus € 5.9 million (Q1 2005|06: minus € 0.6 million) as a result of unrecognized negative foreign exchange differences and higher interest expenses related to fruit acquisitions.
Furthermore, the consolidation of the Atys Group was coupled with a decline in income from associates (2005|06: m€ 1.6).

The Sugar Segment
Revenues in the Sugar Segment rose by 31 percent from € 185.5 million to € 243.0 million in the first quarter of 2006|07 as a result of significantly higher sales volumes.
Advance sales of C sugar prior to the WTO panel decision as well as intervention sales in Hungary and the Czech Republic supported a substantial improvement in income from operations to € 22.6 million (Q1 2005|06: € 9.0 million).

The 2006 beet harvest in Austria, Hungary, the Czech Republic, Slovakia and Romania is expected to reflect the prior year level of 4.8 million tons.

The Starch Segment
Revenues in the Starch Segment reached € 59.6 million during the first quarter of 2006|07, and paralleled the comparable prior year level of € 59.4 million. Income from operations declined to € 7.3 million (Q1 2005|06: € 9.1 million) because of higher energy costs as well as a decrease in isoglucose prices.

The expansion of corn starch production in Aschach to 1,000 tons per day was completed in May 2006. Forecasts for the 2006|07 financial year call for the processing of 334,000 tons of corn.

The Hungarian isoglucose and cornstarch producer Hungrana completed the first phase of its project to expand bioethanol production from 1,200 to 1,500 hectoliters per day, and the increase in corn processing capacity to 1,500 tons per day will be finalized by the end of July 2006. In addition, plans are currently under preparation to further expand production capacity at Hungrana.

Bioethanol
The compulsory environmental impact audit for the construction of a bioethanol plant in Pischelsdorf/Lower Austria was successfully completed. AGRANA has signed a medium-term supply agreement for roughly one-third of the total capacity with OMV AG.

The Fruit Segment
The increase in revenues to € 182.9 million (Q1 2005|06: € 46.5 million) and the improvement in segment income from operations to € 5.1 million (Q1 2005|06: € 0.2 million) resulted chiefly from the initial consolidation of Atys and DSF.

Fruit Preparations
Developments in the fruit preparations subdivision remained favorable. The new production facilities in Serpuchov/Russia started operations during the previous year, and the utilization of capacity has already reached such a high level that plans for the installation of another processing line have already been approved.

Fruit Juice Concentrates
Revenues from the sale of fruit juice concentrates in Central Europe remained below expectations because of the cold weather in Europe and related lower demand during the first three months of the 2006 calendar year.
The selling prices for fruit juice concentrates were raised by a substantial margin over the previous year level to offset higher raw material costs.

AGRANA took a major strategic step in the world’s largest apple growing region with the acquisition of a 50 percent stake in Xianyang Andre Juice Co. Ltd/China.

Outlook
The AGRANA Group expects an increase in revenues of roughly 20 percent over the previous year to € 1.8 billion for the 2006|07 financial year.

“Our growth in 2006|07 will be based on the expansion of capacity in the Starch Segment, an increase in sales of bioethanol in Hungary, acquisitions in the fruit juice concentrate sector and sustained strong organic growth in the entire Fruit Segment“, added CFO Walter Grausam.

The revenue forecast also includes the change in the accounting dates of the fruit companies from December 31 to the Group’s closing date on the last day of February, and the related inclusion of two additional months in this financial year. In the Sugar Segment, the expiration of C sugar exports at the end of the second quarter will lead to a slight decline in sugar revenues for the full year.

“In order to also support our growth over the medium term, we intend to invest roughly € 200 million during the 2006|07 financial year, whereby our major projects will be the construction of a bioethanol plant in Austria, the expansion of Hungarian starch and alcohol activities and new starch processing steps in Austria“, announced Marihart.

The Fruit Segment will provide the major support for revenues and earnings in the AGRANA Group during 2006|07. In contrast, income from operations will be negatively influenced by payments to the European sugar restructuring fund as well as a decline in earnings from sugar exports.

The steady improvement of business processes in all areas and continued growth in the Starch Segment and Fruit Segment should allow AGRANA to match the level of income from operations that was recorded in the previous year.