A bumper performance in the seasonally important third quarter has prompted agri-services group Origin Enterprises (OGN) to upgrade full-year earnings forecasts by 3 per cent.
Underlying revenue - which excludes the impact of acquisitions - rose 13 per cent in the period, as farmers across the UK, Ukraine, Ireland and Poland demanded ever more agronomy services to support near-perfect growing conditions. In the UK, favourable weather accelerated winter and spring plantings, resulting in higher demand for full-service agronomy applications. In Poland, the good conditions meant farmers were positive about their harvests, which led to higher activity levels on the farm. In the Ukraine, where Origin has just completed the acquisition of a 60 per cent controlling interest in Agroscope, higher sales and wider margins reflected an early spring season with a higher level of crop planting.
The UK and Ireland fertilizer business delivered a strong performance, too, as greater visibility on raw material pricing and increased winter cropping gave growers the confidence to invest more in the kind of nutritional packages offered by Origin. Grassland farmers, meanwhile, took advantage of the sunny spring weather to fertilize their fields to maximise grass production for winter feed.
And while on-farm activity in the fourth quarter will be lower than last year, when disruptive weather concentrated activity into the tail-end the year, the strong third quarter will be more than enough to offset those tough comparatives.
