Potato Breeding Company HZPC financial results in line with expectations

Potato breeding company HZPC is on track for the expected result of the financial year 2022-2023. HZPC expects its turnover to grow 10% over last year (then EUR 352 million (USD 377 million)) with a gross margin of EUR 66 million (USD 70 million) (last financial year EUR 63.9 million (USD )).

The potato breeder operates with a financial year from July 1 to June 30. In 2022, international transportation costs were remarkably high. That is a major reason for the increase in turnover. In early 2023, transportation prices fell sharply.

Gerard Backx, CEO of HZPC:
 

"The result is growing mainly thanks to areas outside Europe, where licensed cultivation takes place. Mainly in Asia and America. HZPC expects its licensees to trade 16% more volume of HZPC varieties than a year earlier. The volume of seed potatoes traded is expected to increase marginally. This trade is mainly in Europe and from Europe."

"Sales from the European Union to North Africa and the Middle East have generally been good. In Europe, sales are still slow. Due to the drought in Southern Europe, several growers choose to grow more other crops. This is at the expense of seed potato sales."

HZPC manages to limit the increase in its operating costs to about 2% (last year EUR 50.7 million (USD 54.3 million)). Thanks to these developments, HZPC sees EBITDA (earnings before interest expenses, taxes, depreciation and amortization) expected to increase by about EUR 1 million (USD 1.07 million)

Last year, EBITDA was 13.2 million euros. At the same time, HZPC is facing higher financing costs due to rising interest rates and currency movements in certain countries. The net result is expected to slightly exceed EUR 7 million (USD 7.5 million)(last year EUR 7.051 million (USD 7.5 million)). This does not yet include the costs of the Connecting Growers program.

Connecting Growers

Connecting Growers is a programme whereby HZPC purchases and donates certificates of share to the active seed potato growers of HZPC Holding B.V. in the European Union. HZPC allocates up to EUR 1.5 million (USD 1.61 million) annually for this.

Access to healthy food in hard to reach areas

HZPC's drive is clear: people around the world should have access to healthy food. That is why HZPC is making every effort to continue supplying seed potatoes to all areas. Despite all the difficulties and restrictions, for example in Yemen, it looks like HZPC will continue to supply those areas with healthy starting material this year.

Talented new varieties

Thanks to innovative breeding techniques, HZPC has introduced a number of promising varieties recently. A number of new potato varieties are also on their way. Varieties that can still grow well under difficult weather or soil conditions. Potato varieties that have a lower impact on the environment.