Conglomerate BayWa reports $328 million H1 loss

Admin I Sunday, September 29, 2024

 

BERLIN – German agricultural conglomerate BayWa reported Friday evening a substantial after-tax loss of approximately €290 million ($324 million) for the first half of the year.

The company, which is also active in the construction and energy sectors, attributed the downturn to depreciation on investments, high-interest costs and underperforming business operations. BayWa had earlier disclosed that it had to lower the value of investments by €222 million.

The majority of this impairment, €171.5 million, was related to BayWa’s 51% stake in BayWa r.e., its renewable energy subsidiary.

The impairments were primarily due to asset value reassessments affecting its wind and solar installations.

Contributing factors included declining electricity price forecasts, revised assumptions for grid feed-in, rising capital costs, adjusted lease terms and increased financing costs.

In its renewable energy division, BayWa also experienced a sharp revenue decline, from €3 billion to €1.8 billion in the first half of the year.

However, the company said it remains optimistic about stronger sales in the fourth quarter, particularly in solar, wind, and battery storage projects.

Overall, BayWa’s revenue dropped to €10.7 billion, down from €12.6 billion in the same period last year. Despite the financial setbacks, BayWa emphasized that the impairments would not hinder its ongoing restructuring efforts.

The company is currently facing a severe crisis, burdened by more than €5 billion in debt and is entering a multi-year restructuring and reorganization process.

The company announced a few days ago that this process will involve “numerous operational cost-saving measures” as well as the sale of certain business units. BayWa employs more than 25,000 people globally, with its primary business in agricultural trade.