March 29, 2012

 

Continental Farmers lifts Ukrainian plantings by 50%

 

 

Continental Farmers Group revealed a jump of 50% in its Ukraine crop plantings as the farm operator announced a rise in profits despite a hit from an "extreme" swing in potato prices.

 

Continental Farmers, which is 24% owned by Irish agribusiness Origin Enterprises, forecast having more than 24,000 hectares under crop in western Ukraine for this year's harvest, up from a little under 16,000 hectares in 2011.

 

The expansion meant the group was "already ahead of schedule" on a pledge made at its listing in Dublin and London last year to harvest 50,000 hectares in Ukraine by 2015.

 

Much of the crop for 2012 harvest comprises winter cereals, which extended over 14,500 hectares including plantings from the group's smaller operations in Poland, and had avoided damage from a dry autumn and last month's cold snap.

 

"Despite the dry conditions in autumn 2011 and the severe winter, our crops in Poland and Western Ukraine are currently looking good," the company said.

 

The comments came as the group unveiled a 19.1% rise to EUR3.1 million (US$4.13 million) in earnings for 2011, on revenues up 18.5% at EUR25 million (US$33.23 million).

 

The revenue increase reflected extra sowings in Ukraine for the 2011 harvest too, besides a 27% rebound in Polish wheat yields.

 

These impacts were in part offset by a tumble in Ukraine potato revenues after prices, raised in 2010 by a drought-hit harvest, collapsed last year, when better production left the domestic market with "significant oversupply".

 

"This swing in supply, due to climatic conditions is part of the nature of farming, albeit the Ukraine potato market was an extreme one in five-to-10 year phenomenon," Continental Farmers said.

 

The better former Soviet Union crop has undermined Europe's potato market too, whose softness was highlighted last week by Produce Investments, owner of the Greenvale brand.

 

The results were rated "in line" by NCB analyst Darren Greenfield, who termed Continental Farmers' outlook "encouraging".

 

Continental Farmers shares soared 20% to close at EUR0.29 (US$0.39) in Dublin.