Ekotechnika AG reports positive performance in current financial year
29 September 2016 Corporate News
- Nine-month sales revenues and EBIT clearly up on prior year figures
- Agricultural sector emerging as important growth driver in Russia
- Investment freeze is thawing; tractor and combine harvesters sales picking up
- Working towards exclusive branding deal with John Deere („Green-on-Green“)
Walldorf, 29 September 2016 – The Executive Board of Ekotechnika AG (primary market; ISIN: DE000A161234), the German holding company of the EkoNiva Group, the largest dealer of international agricultural machinery in Russia, envisages continued stabilisation in the company’s business performance and expects to report a clearly positive operating result (EBIT) on the back of solid sales revenues in the current financial year 2015/16 (30 September).
Preliminary figures show Group sales revenues at the nine months stage at approximately EUR 87 million, up by 13% on the prior-year period. The increase was even higher, namely +38%, in exchange rate-adjusted terms, i.e. based on the average rouble exchange rate of the prior year period. The Group is also reporting a clearly improved operating result, with EBIT rising to approximately EUR 6.7 million (previous year: EUR 1.9 million). Sales and profit growth was driven by the strong performance of the Russian agricultural sector, buoyed by an exceptionally good harvest as well as government subsidies for the sector which have enabled farmers to invest in machinery again. Tractor sales at EkoNiva Group are up by approximately one third on the figure for the previous year’s period. The situation is similar on the combine harvesters side where sales are up by a good two thirds on the prior year figure.
Says Stefan Dürr, CEO of Ekotechnika AG: “We are satisfied with the present results for the current financial year. It seems that the freeze on capital spending in the agricultural sector is slowly thawing and that the sector has emerged from the trough marked in the crisis year 2014/15. However, the high cost of financing in Russia remains a drag on our business because it makes state-subsidised equipment from local manufacturers more attractive to farmers. International manufacturers consequently continue to increase their vertical integration in Russia. This trend is exemplified by our most important partner, John Deere, who is one of a small number of western manufacturers to be categorised as a “Russian manufacturer” with respect to their sowing and tilling machines made in Orenburg. Which is all the more reason for us to further expand our cooperation with John Deere going forward.”
“Green on Green” – partnership with John Deere to be intensified
In view of the long-standing and trustful cooperation with John Deere, the management of the EkoNiva Group plans to upgrade this partnership from 2017 by switching all locations to exclusive brand status and expanding the product range of the “green agricultural machines”. The objective is to channel demand for ever more complex and networked agri-machinery solutions through close collaboration between manufacturer and dealer and with a clear focus on the target market.
Says Stefan Dürr: “At John Deere, dealers are far more than mere sales outlets. They are important partners in growing the brand and product portfolio in Russia, where John Deere is the only full-line manufacturer offering a complete line-up of agricultural equipment for professional farming. We want to strengthen this partnership with John Deere and pool our resources, thereby joining our two brands for shared success.”