The international trading and services group BayWa AG has reported revenues of €3.8 billion in the first quarter of 2018 (Q1/2017: €3.8 billion). Earnings before interest and tax (EBIT) ran to €–41.0 million (Q1/2017: €8.0 million). These kinds of earnings are typical for the season, and this amount can be attributed primarily to the very long winter period, which had a negative impact on the Agriculture and Building Materials Segments in the German-speaking countries. Moreover, there have been delay effects in the field of Renewable Energies, as numerous solar plant and wind farm construction projects are currently still in the realisation phase. The agricultural operating resources business and the building materials business have now once again picked up considerably due to the warm weather conditions in April. Furthermore, because it will again be possible to sell more wind and solar parks over the course of 2018, BayWa expects that it will be able to make up for the overall decline in earnings throughout the year, meaning that the Group will be able to achieve its targets for the year. In general, the first quarter is only of limited informative value for BayWa.
In the Agriculture Segment, the international trade in grain and oilseed benefited from favourable soya price developments in the first quarter of 2018 and took advantage of trade opportunities arising from increases in price volatility. According to current assessments, this area will develop better than expected over the course of the year. In the first quarter of 2018, Agricultural Equipment was still being shaped by high demand for agricultural machinery and equipment. However, in the domestic produce and operating resources business, severe frosts in many parts of Germany led to a late start to the season, which did not begin until well into March, and significantly lower sales volumes year on year. Due to considerable crop losses at Lake Constance resulting from frost and hail damage in the first half of 2017, the marketing volume in the fruit trade decreased significantly with a corresponding impact on earnings in the first quarter of 2018. The boost to earnings in the international agricultural business was unable to compensate for the declines in the domestic agricultural business and in Global Produce (formerly Fruit). But due to the promising start to the marketing season for the new apple harvest in New Zealand, along with other favourable developments, BayWa now also anticipates higher earnings for Global Produce at the end of the year than originally expected. Sales of operating resources picked up considerably once more due to the warm spring weather conditions, because of which BayWa anticipates significant recovery effects in the Agriculture Segment over the course of the year. In total, revenues in this segment amounted to €2.73 billion in the first quarter of 2018 (Q1/2017: €2.74 billion). EBIT in the first quarter of 2018 ran to €–2.7 million (Q1/2017: €11.2 million).
The long winter period also had an impact on the conventional energy business. Even though sales of lubricants and pellets picked up somewhat, this development was unable to compensate for factors such as the decline in diesel sales in the delivery business. There were considerable changes to EBIT in this segment year on year, as BayWa r.e. renewable energy GmbH benefited from some exceptionally strong project business in the first quarter of 2017. However, according to plan, there will once more be a sharp increase in the number of project sales in Renewable Energies in the months to come. Revenues in the Energy Segment in the first quarter of 2018 totalled €775.8 million (Q1/2017: €770.4 million). EBIT in the first quarter of 2018 amounted to €–3.5 million (Q1/2017: €24.3 million).
Building Materials Segment
The long winter period in the first quarter of 2018 also had an impact on the Building Materials Segment, as building activities slowed down well into March due to long periods of frost in some areas. Moreover, price competition in the sector increased due to the resulting low demand for building materials, which increased pressure on margins. For this reason, revenues in this segment did not quite reach the high value of the previous year, and seasonally negative EBIT were still down year on year. However, the construction sector has been hard at work again since early April and order levels are already up year on year, which means that the shortfall in earnings due to sales volumes should be made up for again quickly. Revenues in the Building Materials Segment in the first quarter of 2018 ran to €287.9 million (Q1/2017: €290.7 million), and EBIT stood at €–15.7 million (Q1/2017: €–11.4 million).
Innovation & Digitalisation Segment
This segment was able to considerably increase its revenues year on year in the first quarter of 2018. This can be attributed to the continuous development of its product range, the international expansion of its sales activities and strong new customer growth. This growth has been offset in EBIT by the considerable year-on-year increase in necessary investments, above all in the development of digital farming solutions. Revenues in the Innovation & Digitalisation Segment amounted to €2.0 million in the first quarter of 2018 (Q1/2017: €1.5 million), and EBIT came to €–3.0 million (Q1/2017: €–3.0 million).
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