Potato breeding company HZPC, is poised to achieve its expected results for the financial year 2022-2023. HZPC expects its turnover to grow 10% over last year (then 352 million euros) with a gross margin of 66 million euros (during the last financial year it was 63.9 million euros).
The Dutch based potato breeder and seed exporter operates with a financial year from July 1 to June 30. In 2022, international transportation costs were remarkably high. That is a major reason for the increase in turnover. In early 2023, transportation prices fell sharply.
Says Gerard Backx, CEO of HZPC: “The increase is mainly thanks to areas outside Europe, where licensed cultivation takes place. Mainly in Asia and America.”
Increase in trade volume
HZPC expects its licensees to trade 16% more HZPC varieties than a year earlier in volume. The volume of seed potatoes traded is expected to increase marginally. This trade is said to be mainly in Europe and from Europe.
“Sales from the European Union to North Africa and the Middle East have generally been good,” says Mr. Backx. “In Europe, sales are still slow. Due to the drought in southern Europe, several growers choose to grow more other crops. This is at the expense of seed potato sales. ”
HZPC manages to limit the increase in its operating costs to about 2% (last year 50.7 million euros). Thanks to these developments, HZPC sees EBITDA (earnings before interest expenses, taxes, depreciation and amortization) expected to increase by about 1 million euros. Last year, EBITDA was 13.2 million euros. At the same time, HZPC is facing higher financing costs due to rising interest rates and currency movements in certain countries. The net result is expected to slightly exceed 7 million euros (last year 7.051 million euros).
This does not yet include the costs of the Connecting Growers program. Connecting Growers Connecting Growers is a programme whereby HZPC purchases and donates certificates of share to the active seed potato growers of HZPC Holding B.V. in the European Union. HZPC allocates up to 1.5 million euros annually for this programme.
Targeting hard to reach places
Access to healthy food in hard to reach areas is an important goal for HZPC. The company firmly believes that people around the world should have access to healthy food. That is why HZPC is making every effort to continue supplying seed potatoes to all areas wherever possible.
Despite all the difficulties and restrictions, for example in Yemen, it looks like HZPC will continue to supply those areas with healthy starting material this year.
Promising new varieties
Thanks to innovative breeding techniques, HZPC has introduced a number of promising varieties recently. A number of new potato varieties are also on their way – varieties that can still grow well under difficult weather or soil conditions. These new potato varieties have shown to have a lower impact on the environment.