Agrifirm provides members with higher profit sharing

Although Agrifirm's turnover is again declining, the cooperative did realize a higher profit in the past year. In addition, the members may jointly distribute an amount of €28 million, which is €3 million more than in 2017.

What is striking about the annual figures, which the company released on Friday 15 March, is that Agrifirm was unable to stop the loss of volume last year. This is a trends which has been going on for a few years now. The volume of compound feed sold fell by 5,6% to 3,6 million tons, but more by-products were sold. The animal feed volume on balance loses 3% to slightly more than 6 million tons.

Agrifirm makes no distinction per country or animal category. As a result, it is unclear in which countries or sub-sectors less feed was sold. Since the cooperative is strong in the Netherlands, and both the cattle and pig herds there have shrunk, a decline in the home market is logical.

Less fertilizer and crop protection products
Vegetable sales (-10% to 683.000 tons) are also less generous; for example, fewer crops and fertilizers were sold. These figures may be somewhat distorted by the lower balances in the arable sector, as a result of the dry summer of 2018. Turnover related to crop protection products decreased by €8,6 million to €109,6 million.

The group's total turnover fell by 1,5% to more than €2 billion, although this says little about Agrifirm's performance. Agrifirm does, however, have more money left at the bottom; the net result increased by almost €6 million to €44 million. Agrifirm speaks of a good result, which was achieved under challenging circumstances. Examples are the trade war, dry summer and smaller livestock.

More money to members
The members of the cooperative benefit from the increase in profit, as the dividend increases by €3 million to €28 million. Agrifirm also introduced 'the coop+ factor' in 2018. This is a key between the net profit and the dividend; for 2018 the factor is 1,4. This means that the payment for Dutch members is 40% higher than the profit made by the cooperative. Agrifirm speaks of a unique construction.

Last year, Agrifirm also came up with the loyalty scheme, which means that members can start investing their dividend at an attractive interest rate. With these measures, the cooperative is taking concrete steps to give substance to the new 'Better Together' strategy.

Wouter Job

Wouter Baan is editor-in-chief of Boerenbusiness. He also focuses on dairy, pig and meat markets. He also follows (business) developments within agribusiness and interviews CEOs and policymakers.

w.baan@boerenbusiness. Nl

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