The Tessenderlo Group’s Agro segment reported a 64.2% drop in adjusted EBITDA for the first half ending June 30, 2023, to €43.5 million from the year-ago €121.6 million. Agro revenues declined 18.8%, to €443.5 million from €546 million.
The company said adjusted EBITDA was down for Crop Vitality, Tessenderlo Kerley International, and Violleau on lower sales volumes, while margins were under pressure following lower selling prices in combination with higher-valued stock. Adjusted EBITDA for NovaSource increased thanks to the contribution of the Lannate® product line acquired in second-half 2022.
The company reported that Violleau’s new organic fertilizer plant in Aisne, France, started up its new production line in July. Construction on new plants in Defiance, Ohio, and Geleen, the Netherlands, remain on schedule.
Defiance will produce liquid and sulfur-based fertilizers Thio-Sul®, KTS®, and K-Row 23®, as well as sulfite chemicals for industrial markets. Defiance is scheduled to start operations by the end of 2024. The Thio-Sul plant in Geleen is expected to be operational by mid-2024.
CFO Stefaan Haspeslagh told analysts that demand for the company’s sulfur-based liquid fertilizers is picking up in the second half. He added that precision agriculture remains a hot topic and Tessenderlo is supporting trend. He said the company sees potash prices as bottoming out with possible price increases in the second half, though he said there is no problem with availability.
Company-wide adjusted EBITDA was down 17.1%, to €205.1 million from €247.6 million, while revenues were up 21.4%, to €1.63 billion from €1.34 billion. Bio-valorization adjusted EBITDA was down 30.6%, with Industrial Solutions up 9.6% and T-Power up 4.2%. The Picanol Group, which became a business unit in January 2023 in the Machine & Technologies segment, contributed €45.2 million.
Revenue for Bio-valorization and Industrial Solutions remained stable, while T-Power was up 5.8% and Picanol added €367.7 million.