HZPC Group Anticipates an 11% Increase in Turnover

For the fiscal year 2022–2023, the Royal HZPC Group potato breeding company experts anticipate an 11% increase in turnover from the prior year (when it was EUR352m), with a gross margin of EUR66,5m (compared to EUR63.9m in the prior fiscal year). The financial year for the potato breeder is from 1 July to 30 June.

“In the financial year 2022-2023, international transport costs were remarkably high. This is a major reason for the increase in turnover. Transport costs are expected to decline in the coming year,” according to a recent company release.

In comparison to last year, the total tonnes (traded seed potatoes and authorized cultivation) have significantly increased. It is anticipated that the amount of traded seed potatoes would only slightly rise. Most of this trade occurs in and out of Europe. The outcome is growing mostly as a result of regions outside of Europe where cultivation is allowed. primarily in America and Asia. The Royal HZPC Group anticipates that its licensees will trade 17% more HZPC varieties than they did a year ago.

“As mentioned in February, sales to southern Europe were initially slow due to the drought. However, these sales have continued for a long time, increasing overall sales,” Gerard Backx, CEO of Royal HZPC Group, said.

EBITDA and Financing Costs Increase

HZPC was able to keep the rise in operational expenses (EUR50.7m last year) to under 3%. Royal HZPC Group anticipates a roughly EUR1m increase in EBITDA (profits before interest expenditures, taxes, depreciation, and amortization) as a result of these changes. EBITDA was EUR13.2m in the previous year.

The Royal HZPC Group has opted to provide its producers advances early in the growing season for several years. External funding is necessary for this. Financing costs go up as a result of rising interest rates. Costs are also raised by the effects of exchange rates, particularly on the Argentine peso.

The net result is predicted to be somewhat more than EUR7m (prior year: EUR7.051m). This does not include the Connecting Growers program's costs.

Harvest 2023

“We expect the total area for the production of certified seed potatoes in Europe to decrease sector-wide. This is because some growers choose to grow consumption potatoes for the french fries industry instead of seed potatoes. This will affect the expected availability of certified seed potatoes for the 2024 crop planting. Whether this will affect the expected results in the financial year 2023-2024 can I not yet predict,” Backx declared about this year’s harvest.

The Royal HZPC Group's motivation is clear: people all across the world should have access to healthy food. That is why the potato breeder is working hard to keep seed potatoes available in all places. Despite the obstacles and restrictions, such as those in Yemen, Royal HZPC Group appears to be continuing to supply those areas with healthy starting material this year.

Last but not least, TLC Potatoes Ltd, one of Scotland's major small tuber manufacturers, has been acquired by HZPC UK, a subsidiary of the Royal HZPC Group. This transaction does not affect the profit prediction for the fiscal year 2022-2023. The Royal HZPC Group announced the acquisition today.