Despite the fact that the conflict in Ukraine is affecting HZPC's sales, HZPC is keeping its profit forecast intact after three quarters in the 2021-2022 financial year.
HZPC expects the volume of seed potatoes traded by HZPC and its licensees to reach a tonnage just above 900,000 tons. This is about the same as the tonnage in 2020-2021; a year in which the results were strongly affected by the economic impact of the corona crisis. However, it is 1% lower than the volume estimate after the second quarter. This expected drop in sales was largely caused by the war in Ukraine.
For the entire fiscal year, HZPC expects to realize a turnover of 342 million euros (in 2020-2021 this was 314 million euros) with a gross margin of almost 62 million euros (9% more compared to the previous fiscal year). Operating expenses are expected to be slightly above €49 million (€1.9 million lower than the previous financial year). These expectations result in an EBITDA of 12.6 million euros.
Over the year 2020-2021 HZPC has realized a net profit of 1.4 million euros. This financial year a net profit of 6.6 million euros is expected. This is limited lower than the profit that was expected after the second quarter. These profit figures do not yet include the costs of the Connecting Growers program.
Connecting Growers is a program in which certificates of shares are purchased and offered to active seed potato growers of HZPC Holding B.V. in the European Union. Last year more than 1.3 million euro was spent on this. The agreement is that per year a maximum of 1.5 million euro will be spent.
Normally HZPC delivers seed potatoes to Ukraine. Also for this year orders have been placed. However, until now only a limited part has been delivered and the major part has been cancelled. In the press HZPC has openly expressed its solidarity with the Ukraine and its people. Nevertheless, most deliveries to Russia have continued. Potatoes are an important food crop. Seeds and seedlings are an irreplaceable start to all food productions. As such, they are a requirement for food security.
Intellectual property China
In the 2020-2021 annual report, HZPC shared that it is important to keep a sharp eye on its intellectual property and that HZPC intervenes when its varieties are used illegally. The above is happening and has happened in China. During the last few years HZPC has conducted various lawsuits about its intellectual property and related matters. These often lead to payments of fines and overdue licences. Only when these matters have been fully completed will the income from them be recorded in the books. On the basis of the current state of affairs HZPC expects a payment of 3 - 4 million euros in the future.
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