DGAP-News

Business figures for 2016: BayWa intends to increase earnings following a difficult agricultural year

DGAP-News: BayWa AG / Key word(s): Final Results Business figures for 2016: BayWa intends to increase earnings following a difficult agricultural year 30.03.2017 / 10:30 The issuer is solely responsible for the content of this announcement. Business figures for 2016: BayWa intends to increase earnings following a difficult agricultural year

The international trade and services company BayWa AG, Munich, Germany, increased revenues by a good 3% in the financial year 2016 to EUR15.4 billion (2015: EUR14.9 billion). Although fruit trading and the energy business both generated a record annual result, the persistently difficult and very volatile agricultural trading markets pushed the overall Group's earnings before interest and tax (EBIT) to EUR144.7 million (2015: EUR158.1 million).

"Developments over the past financial year have once again shown the importance of BayWa's broad positioning. In particular, the international fruit business and renewable energies were key to driving our Group EBIT. Optimisation measures were also introduced in the Building Materials Segment and had a positive impact on earnings," Klaus Josef Lutz, Chief Executive Officer of BayWa AG, explained.

The underlying conditions for agricultural trade and agricultural equipment activities, on the other hand, had been very difficult for the entire industry; the ramifications of these conditions also had a significant impact on BayWa: Although a record global harvest resulted in a higher commodity trading volume of approximately 34 million tonnes for BayWa (2015: 30 million tonnes), these same record levels also brought about an overall drop in prices accompanied by a corresponding pressure on margins. Farmers' investments in equipment and operating resources declined as a result of a drop in producer prices and lower revenues. "In particular the last year's development of soya and soya meal prices put pressure on our activities," Lutz emphasised. Changing forecasts for global soya harvests, some of them contradictory, led to extreme price volatility, which was then also further enhanced by technical market mechanisms in trading activities, such as by hedge funds. Lutz explained that as the impact of these mechanisms is increasing, BayWa plans to gain expertise through cooperations so as to optimise the company's trading strategies.