First half of 2016: BayWa raises EBIT year on year

BayWa AG, Munich, Germany, finished the first half of 2016 with significant earnings improvement. Earnings before interest and taxes (EBIT) rose by €8.6 million to €55.3 million (H1/2015: €46.7 million)*, equating to an increase of 18.4%. Revenues increased slightly to €7.5 billion (H1/2015: €7.4 billion) in the first half of the year. Thanks to a positive starting position, especially for the business with renewable energies and fruit, as well as an expected recovery in international agricultural trade activities, BayWa AG sees good opportunities to further expand the EBIT year-on-year over the course of the current financial year.

'Our internationalisation and diversification in our core areas of business once again guaranteed BayWa's positive earnings development,' Klaus Josef Lutz, Chief Executive Officer of BayWa AG, explained. International fruit trading and, in particular, the business with renewable energies more than compensated for the effects of a difficult agricultural market environment, thereby driving the significant improvement in EBIT, Lutz said. 'The traditional business units conventional energy and building materials also managed to take advantage of the favourable market conditions in their core markets and make a positive earnings contribution,' Lutz continued. A good basis is in place to finish the year up on 2015. This opinion is founded primarily on the positive prospects for renewable energies and fruit. BayWa also expects an increase in the international agricultural trading business in the third and fourth quarters, he added.

Fruit business bolsters Agriculture - catch-up effects expected in the second half of the year
The Agriculture Segment comprises trading in agricultural operating resources and produce as well as the Agricultural Equipment, Fruit and Digital Farming business units. Despite a challenging market environment with low producer prices and a corresponding reluctance among farmers to buy operating resources and, as expected, agricultural equipment in particular, the segment fared well, especially in the second quarter. This was due first and foremost to T&G Global's successful fruit business in New Zealand and the newly acquired Dutch supplier of tropical fruits TFC Holland. The business unit also benefited from the sale of the packaging logistics unit in New Zealand. In the fruit business, the fruit harvest so far promises good marketing opportunities for apples from New Zealand. Because there is reason to expect improved marketing opportunities in the export of high-quality wheat, for example, a high point in produce trade is anticipated for agricultural trade activities in the second half of the year, which is typical of the business.

Energy Segment sees very positive development
The Energy Segment comprises the BayWa Group's trading activities in fossil and renewable heating fuels, fuels and lubricants, as well as its business in renewable energies, which is pooled in BayWa r.e. renewable energy GmbH.

The conventional energies business saw an excellent first half of the year on account of price-related brisk demand in heating fuels and fuels trading and improved trade margins. The significantly higher result in the Renewable Energies business unit year on year was bolstered by the sale of wind farms and solar parks in the UK and Germany. Recently finished plants - such as 'Vine Farm' in the UK, at 45 megawatts (MW) BayWa r.e.'s largest single project in the field of solar power - suggests further very positive development of the project business once again in the second half of the year 2016. In addition, the expansion in South East Asia continues to make promising strides thanks to a new branch in Bangkok, which joins Tokyo and Singapore, and first project acquisitions.

Building Materials Segment expands lead
The Building Materials Segment mainly comprises Group trading activities involving building materials in Germany and Austria. The positive development in the first half of the year reflects the trend in building activity, especially in residential construction, as well as the successfully implemented sales measures in the segment. The mild winter weather also played a role in ensuring that business was already better in the first quarter than in the previous year.

* Figure adjusted, mainly for the effect from the accounting of a finance leasing in the financial year 2013 and the early application of a new IFRS standard.

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