Breeder and seed supplier KWS has raised its profit forecast for the 2021/2022 financial year, which runs from July 1 to June 30. The company is doing this after a turnover growth of more than 32% in the first half of the financial year.
KWS's net turnover amounted to €1 million in the period from July 31 to December 431,6. That is a growth of 32,4% compared to the same period last year. Due to the strong dependence on the season, 25% to 30% of the total net annual turnover is usually achieved in the first half of the financial year.
Corn seed sales increased to €200,7 million due to good demand in South America, especially Brazil. KWS has not only benefited from a growth in the area in Brazil, but its market share has also expanded. As usual, the result of the corn division was negative for this period, -€66,4 million compared to a loss of €69,1 a year earlier. However, the majority of sales come from Europe and North America, where the sales season only starts in the third quarter. The beet division recorded a net turnover of €60,9 million. That is also growth compared to last year. This is mainly due to expansion in North Africa and more early seed orders in Germany. The income therefore amounts to -€45,2 million compared to -€45,3 million last year. Here too, most turnover is achieved in the third quarter.
Great growth in oilseed rape
The turnover of the grains division increased by 12% to €174,9 million, mainly due to a sharp increase in demand for rapeseed (which falls under the grains division). Due to favorable market conditions and an improved product portfolio, rapeseed sales increased by 41% according to the company. Sales of rye and wheat seed also increased. The exception to the turnover growth is barley seed. Due to unfavorable weather conditions, less barley was delivered. The result of the grains division in the first half of the year amounted to €62,3 million. That is €10 million higher than in the same period last year.
The vegetable seed division performed less well compared to the same period last year. Turnover fell from €26 million to €21,9 million. KWS blames the corona pandemic. Distributors have therefore maintained relatively large stocks. The company expects sales to pick up again in the second half of the year. The result of the vegetable seed division amounts to a loss of €10,6 million, compared to €8,7 million a year earlier.
Given the positive business performance in the first six months, the Board of Directors expects KWS to grow net sales by 2021% to 2022% for the 9/11 financial year as a whole. That was 5% to 7%. The EBIT margin (gross profit) remains the same at approximately 10%.