AGRAVIS Raiffeisen AG still facing difficult market conditions
“The AGRAVIS Group can look back on another trying, but exciting, year. There has been a succession of positive events and difficult market conditions,” reported Andreas Rickmers, who has headed up the AGRAVIS Group since 1 January, 2017 as its new Chairman of the Managing Board, describing the previous financial year. With a turnover of approximately 6.2 billion euros, Germany’s second largest agricultural trade and service company had “Achieved a satisfactory result for the 2016 financial year against the backdrop of a difficult market situation and had hit its target – but not exceeded it.“
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Weak grain prices, as well as low energy prices and, at times, low meat and milk prices had impacted turnover. In addition, in early 2016, the AGRAVIS Group had lost turnover equivalent to around 300 million euros by selling its subsidiaries Fugema Futtermittel- und Getreidehandelsgesellschaft mbH in Malchin/Mecklenburg-Vorpommern, Raiffeisen Mölln GmbH & Co. KG in Mölln/Schleswig-Holstein and Raiffeisen-Zentrum-Idstedt GmbH in Idstedt/Schleswig-Holstein to associated company Ceravis AG.
Predominantly good figures
“All this obviously had an effect on turnover” explains Rickmers. Nevertheless, almost all the business segments and companies in the AGRAVIS Group “Achieved good figures”. The overall result, according to AGRAVIS’s new boss, was nevertheless impacted by negative influences that affected the Group’s important wholesale agricultural product business. Feedstuff and machinery business had been satisfactory. The Markets segment and results in the Energy sector were also positive.
Continued efforts to ensure growth
AGRAVIS has announced it expects to achieve earnings before tax “In excess of 40 million euros”. Rickmers, who before joining AGRAVIS had worked at Cargill in various positions for over 20 years – his last post was Head of the European Agricultural Business Unit in Geneva/Switzerland – aims to steer AGRAVIS on a steady course towards sustainable growth. “AGRAVIS has strong foundations – thanks to its established holding structure, its employees’ know-how, the cooperative association and the Group’s entrepreneurial mindset. We intend to achieve further growth underpinned by these foundations: Through closeness to the market, high investment propensity, cost and process optimisation and innovative force” he explains. “AGRAVIS is well positioned. We anticipate strong further development and comparable levels of turnover in 2017. We then aim to boost growth in 2018.”
Group’s investment confidence remains high
The Group’s investment confidence is expected to remain high – and investments are expected to significantly exceed depreciation. Rickmers emphasises: “After investing 67 million euros in 2016, in the current financial year we will also be investing over 60 million euros – staying on the path we have chosen. We intend to improve our customer focus and market strength and this means we must be willing to invest. We will continue to demonstrate this willingness.” Under his leadership, the new AGRAVIS boss says, the company will continue on the path of sound, down-to-earth, evolutionary growth.
2017 is also set to be a difficult year
“We are keeping our eyes fixed on our clearly defined goals. We know that 2017 will be another difficult year for our industry. And for us. But: We have solutions and we also have a clear vision of where we want to be. Together, we will accomplish this successfully,” says Rickmers. AGRAVIS’s new boss stresses that the welcome sustained growth of equity capital which rose further in the previous financial year and “Is now in excess of 560 million euros” provides a firm foundation for entrepreneurial activities in 2017.
The company will announce detailed results and details for the 2016 financial year, as well as information about current developments in the AGRAVIS Group at its annual balance sheet press conference on 21 March 2017.