DGAP-News: BayWa AG
/ Key word(s): 9 Month figures
BayWa confirms significant increase in earnings for 2019 - Improvement in all core segments
All three core segments - Agriculture, Energy and Building Materials - saw improved earnings compared to the same period in the previous year. The Energy Segment recorded particularly positive development, with both Conventional Energy and the renewable energies business achieving a significant improvement in earnings. Conventional Energy benefited from the global oil price trend and an increase in domestic demand for wood pellets. The Renewable Energies business unit further expanded its international activities in the solar and wind plant project business and in solar module trading. Unlike in the previous year, it also sold a few larger plants and systems in the third quarter. The lion's share of sales is once again scheduled for the fourth quarter of 2019. With more than 650 megawatts (MW) in the sales pipeline, it should be possible to achieve a substantial year-on-year increase in the annual result in the Energy Segment in 2019. "The Renewable Energies business unit will again play a major role in our consolidated earnings in 2019, thereby demonstrating the excellent development of these business activities, which we have spent the past ten years nurturing," said Klaus Josef Lutz, Chief Executive Officer of BayWa AG.
The Agriculture Segment also posted positive development, with the Global Produce and Agricultural Equipment business units in particular seeing an increase in earnings. Agricultural Equipment recorded consistently high order intake and brisk demand for services. BayWa expects the positive development to continue in both areas in the final quarter of the year. High-quality harvests in the northern hemisphere and the traditional increase in demand for tropical fruits around Christmas should have a positive effect on business, as should the tremendous willingness of farmers to invest to agricultural equipment.
Agricultural trade activities in Germany were also up significantly year on year after the first nine months of 2019. However, lower demand for agricultural inputs, especially fertilizer (on account of the German Fertiliser Application Ordinance), had an impact on earnings as at 30 September 2019, as did declining grain prices and lower margins in grain trading. The international grain trading team at BAST (BayWa Agri Supply & Trade) successfully continued to expand its speciality business activities, even though the subdued demand for standard produce to date and US trade policy limited trading activity at BAST. In the fourth quarter, BayWa expects the speciality business to continue developing as planned. Higher domestic grain inventories offer additional marketing potential in the domestic agriculture business. The weather-related delay in autumn seed-sowing should help to boost demand for agricultural inputs.
The Building Materials Segment grew further and once again saw improved earnings year on year. BayWa intends to continue benefiting from the brisk construction activity and the expansion of its project activities.
All told, BayWa expects the positive development to persist throughout the rest of the financial year 2019 with the effect of significantly increasing the consolidated earnings for 2019 as planned.
Agriculture Segment: development mixed
Earnings in the Global Produce business unit rose significantly thanks to business within Germany, as the company was able to market the remaining volume of the previous year's record harvest at good prices and because the new marketing season started with brisk demand. Although this year's harvest was rather average in terms of volume, it was of significantly higher quality, therefore offering corresponding marketing opportunities in the months ahead. In the international fruit business, T&G Global Limited was successful in the Asia-Pacific market in particular, thanks to specialities such as grapes, berries and citrus fruit.
Earnings in the Agricultural Equipment business unit were significantly higher than planned, even though they did not quite match the record set in 2018, as expected. The business unit benefited not only from a very high propensity to invest among farmers, but also from rising demand from the public sector.
Energy Segment: significant earnings growth
Building Materials Segment: higher share of private brands
Agriculture Segment performance
Energy Segment performance
Building Materials Segment performance
Innovation & Digitalisation Segment performance
Please note: Amounts are stated in millions of euros and rounded to one decimal place. This may result in minor discrepancies in sum totals and when calculating percentages.
2 Comprises the figures of the Agriculture, Energy, Building Materials and Innovation & Digitalisation Segments, as well as the Other Activities and the transition.
Marion Danneboom, BayWa AG, Head of PR/Corporate Communications/Public Affairs,
tel. +49 (0)89/92 22-36 80, Fax +49 (0)89/92 12-36 80,
07.11.2019 Dissemination of a Corporate News, transmitted by DGAP - a service of EQS Group AG.
|Listed:||Regulated Market in Frankfurt (Prime Standard), Munich; Regulated Unofficial Market in Berlin, Dusseldorf, Hamburg, Hanover, Stuttgart, Tradegate Exchange|
|EQS News ID:||906919|
|End of News||DGAP News Service|