Breeding, Europe, UK, Ireland, Most viewed stories, News May 2024, Seed, Trade/Markets/Prices, Varieties

Royal HZPC Group navigates market volatility: Financial stability amid fluctuating yields and global expansion

Potato breeding company Royal HZPC Group expects to achieve a similar result for the financial year 2023 / 2024 (July – June) as in the previous financial year, with an expected increase in financial turnover of 4%.

Stable result in fast-moving market

Season 2023/ 2024 is characterized by strong market movements on both the supply and demand sides. For example, Royal HZPC Group already reported low European yields in its February quarterly report. However, the potato breeding company managed to sell more top of seed potatoes than was expected a quarter ago. As a result, Royal HZPC Group’s European operations are expected to show better results. In other regions there were setbacks, partly due to high potato yields leading to oversupply. 

Financial turnover expected to increase by 4%

Gerard Backx: ‘We expect the total tonnage we sell and/or which is sold by licensees to increase by 5% compared to the previous year. We will probably be within 1% of reaching the million tonne milestone.’

Low European yields, especially in the Netherlands, lead to a 6% decrease in the expected tonnage that’s being or has been sold. In contrast to this decrease, there is an expected growth of 23% in the tonnage grown under license. This is mainly due to positive developments in America and Asia. Due to the changing ratio between direct sales and tons produced by licensees, combined with the increased sales prices, Royal HZPC Group expects the financial turnover to increase by 4% compared to last year’s realized turnover (turnover financial year 2022 / 2023: €423 million).  

Additionally, the potato breeding company anticipates a fractionally higher gross margin of €72 million and fractionally higher normal operating costs. However, there is still consideration for higher total costs due to potential provisions for debtors in politically unstable regions. This situation has improved compared to February, but it is wise to consider it as an uncertain factor towards the final result.

Similar financial result expected

Due to the developments described in the above, Royal HZPC Group maintains the previously stated expectation of a net result between €5 and €7 million. In the two previous financial years Royal HZPC Group realized a net result of €7 million. The mentioned results do not include costs of the Connecting Growers program. 

Money returned into account

Last quarter, Royal HZPC Group’s money which had been stolen by cybercriminals, was returned to the last cent. The potato breeder reported in September that it had been hit by a cyberattack. The relevant authorities released the money from the blocked account where it had been held for a long time. Royal HZPC Group has not been informed about any results of the forensic investigation. With the return of the misappropriated amount, Royal HZPC Group closes the incident.

Source: Royal HZPC Group
Image: Credit Royal HZPC Group

Editor & Publisher: Lukie Pieterse


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