Agrifirm more than doubled its profit to € 21.1 million in 2012. This is evident from the financial statements published by the Cooperative today.
This improvement is due to higher revenues and the continuous efficiency improvements made by several subsidiaries.
The result showed a positive trend compared to 2011. The key elements that affected the result were as follows:
(+) The Agrifirm Feed and Agrifirm Plant member companies achieved better results. This largely manifests in better conditions for members/customers in accordance with the agreements within the Cooperative;
(+) The Nuscience subsidiary (specialties, premixes, concentrates) experienced strong growth in terms of revenues and result in 2012, particularly in the Netherlands, China and Ukraine;
(+) Agrifirm Belgium achieved better results in its feed operations, in part due to the higher feed sales volume in tonnes;
(+) The disappointing results from minority interests in 2011 were turned around this past year and achieved a higher level;
(-) The subsidiaries in the Co-products and Services divisions in 2012 recorded lower results than the previous year;
(-) Agrifirm’s feed companies in various European countries had to devote additional attention to preventing rising accounts receivable balances. This reflects the poor financial position of many livestock farms.
€ 13.3 million will be redistributed to members/customers
Agrifirm’s higher profit has resulted in a member dividend of 0.75% of member sales in 2013. In total this represents an amount of approximately € 7.5 million that will be distributed at the beginning of 2014. An additional € 5.8 million will furthermore be distributed in customer discounts. In this way Agrifirm rewards loyal customers.
Successful growth in core activities
‘Our focus on four core activities is bearing fruit,’ says Ton Loman, CEO of Agrifirm. ‘In addition to compound feed, specialties and co-products for the livestock sector, this includes fertilize and the crop protection products in the plant sector. Business units that no longer fit into our core activities are critically reviewed.’ In 2012 this resulted in the sale of the participating interests in Probroed & Sloot (one-day chicks), Interbroed (breeding of laying-hens) and Cefetra (raw materials).
Agrifirm aims for successful growth within its core activities. Loman: ‘In the Netherlands this means enlarging our market share in a shrinking market, in the livestock farming as well as in the plant sectors. We accomplish this through means of cost control and innovative concepts that enable members/customers to achieve better results.’
Outside the Netherlands, Agrifirm is focused on organic growth and acquisitions. ‘We do not grow just for the sake of growth; return is a key focus. However, scale is also important, for example to attract good employees and to be able to continue to responsibly hedge the increasing risks in a highly volatile raw materials market,’ says Loman.
Investments and Acquisitions
In 2012, Agrifirm invested € 53 million in its core activities. Key projects include the new factories in China (premixes, pig feeds), Germany (broiler chick feed) and the Netherlands (cereal storage in Kampen, sowing seed facility in Emmeloord, and the production of liquid compound feed for cattle in Den Bosch).
In addition, the company invested in the following acquisitions: James & Son (Great Britain, co-products), Wefelnberg (Germany, co-products), Trouw Nutrition Környe Kft’s (Hungary, premixes-concentrates-young animal feeds) and the mechanisation equipment company HBM (the Netherlands, continued under the name Abemec Schoondijke).
Merger benefits better than expected
An externally validated evaluation shows that the financial benefits of the merger between Cehave Landbouwbelang and the former Agrifirm in 2010 are higher than projected at the time. The benefit is well above the € 20 million per year estimated at the time.
At the beginning of April, members will receive the Annual Review, a special publication about the results achieved by Agrifirm in 2012.
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