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%.
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.
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: EUR423m).
Additionally, the potato breeding company anticipates a fractionally higher gross margin of EUR72m 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.
Due to the developments described in the above, Royal HZPC Group maintains the previously stated expectation of a net result between EUR5m and EUR7m. In the two previous financial years Royal HZPC Group realized a net result of EUR7m. The mentioned results do not include costs of the Connecting Growers program.
Founded in 1898, and rooted in Dutch soil, Royal HZPC Group has expanded to become the international market leader when it comes to potato breeding, seed potato trading and product concept development. Royal HZPC Group offers innovative potato varieties that are optimised for local growing conditions. The business also shares expertise and solutions that relate to the climatic, cultural and commercial challenges facing the food industry.
Find out more at: https://www.hzpc.com/