(Boursier.com) — The company Franco-Belgian maltings (MFB), 92.33% owned by Malteries Soufflet (the Soufflet Group was acquired by the InVivo group on December 9), publishes its 2021-2022 annual accounts today. Management recalls that the ongoing conflict in Ukraine “has affected Slavuta Malt House (SMH), the group’s subsidiary in Ukraine. As a result, it suffered two months of business interruption, but being located in the west of country, it was able to restart it without having suffered any damage and resume deliveries to its customers.At the level of our Russian subsidiary, the international economic sanctions imposed on Russia are affecting operating conditions, but the activity continues to this day, with very deteriorated bank financing arrangements. To date, the consequences of the conflict on MFB’s accounts and its activities remain limited”.
In terms of activity, after a turbulent 2020 in the context of the pandemic with a market down 6.5% vs 2019, global production in 2021 increased by 4% compared to the previous year, without returning at pre-health crisis levels. All areas of the globe posted growth: Europe +2.6%; Americas +4.8%; Asia +3.6%; Africa +7.3% and Australia/Oceania +0.8%.
The malting barley supply market was tight under the effect of an average collection in quantity and quality in Europe. It was particularly affected by the general rise in grain prices aggravated by the Russian-Ukrainian crisis.
In a malt and beer market still impacted by the health crisis and the disruption of the barley market, Malteries Franco-Belges and its parent company Malteries Soufflet have adapted their production level and continued to strengthen their sustainable supply chains. as well as the deployment of their CSR plan.
For its 2021-2022 financial year, the Malteries Franco-Belges group achieved sales of 102 ME, up +15% compared to the previous financial year.
Sales volumes amounted to 239,430 tonnes of malt, down 5% on the previous year, but in line with production, stocks remaining stable. In France and in the European Union, the volumes sold increased by 1%, but they are down slightly for exports by 2%. Shipments to Africa are on the rise, but down in other geographical areas. This decline was especially marked during the first half of the financial year, the second part having shown a strong recovery in the majority of territories.
The operating profit ultimately stands at 4.7 ME, against 2.7 ME the previous year. As specified above, the volumes marketed by Malteries Franco Belges are up moderately compared to the previous year without a significant effect on the margin. As for production costs excluding changes in inventories, they increased by 16% compared to the previous year, mainly due to the increase in energy prices (76% of the increase). Maintenance costs are also increasing, but all of these costs are neutralized by the exceptional receipt of compensation for termination of an energy contract.
The share of companies accounted for using the equity method (Compagnie Internationale de Malteries – CIM and its subsidiaries) amounted to €11.3 million at June 30, 2022 compared to €16.4 million at June 30, 2021.
The volumes marketed by the subsidiaries of this sub-group located in Central Europe and in the Commonwealth of Independent States increased by 4.7% resulting in an increase of 3.6 ME in the gross margin after distribution costs compared to the previous year resulting from a volume effect and a price effect.
On the other hand, production costs excluding changes in inventories recorded a sharp increase of 28% compared to the previous financial year linked to the rise in energy costs, particularly in Romania, Bulgaria and Ukraine, countries whose organization of energy markets does not allow for the implementation of an effective hedging strategy.
Finally, financial expenses rose sharply this year as a result of a deterioration in financing costs in the region, particularly in Ukraine and Russia, as well as the average working capital requirement.
As a result, the net profit attributable to the Malteries Franco Belges group amounts to €15.3 million in 2021-2022, compared to €17.4 million in 2020-2021.
As of June 30, 2022, net financial cash amounted to €76.1 million, compared to €78.8 million as of June 30, 2021.
Outlook
The COVID-19 crisis remains a risk factor even if the recovery in consumption has been significant in most of the world without however having returned to the levels of 2019.
During the summer of 2022, malt shipments during the summer season were sustained. Two major factors contributed to this strong demand: weather with record heat throughout the high season, which encouraged beer consumption and the build-up of stocks by brewers in a logic of risk anticipation.
At the level of malting barley 2022, it is observed that in France, the collection is quantitatively and qualitatively rather favorable for malting; in Central Europe, quantities eligible for brewing are up in the Czech Republic and Poland, down in Romania and Bulgaria and stable in Serbia; in the Commonwealth of Independent States, the quantities harvested are within the five-year average in Russia and Ukraine, with quality within the standards, unlike in Kazakhstan where the harvest is below average.
Thus, the 2023 financial year should continue to register growth in volumes and turnover with, on the other hand, risks on operational profitability given the inflationary drifts which are spreading for raw materials, the strong tensions on the energy, the probable impacts on the payroll, a still highly uncertain geopolitical environment and a still precarious health situation…