Posted on April, 12, 2023 at 12:12 am
Exceptionally high grain prices in 2022 led to both higher turnover and increased profits for merchant Frontier.
The company made a pre-tax profit of £39m for the year ending 30 June 2022, up from £32.4m for the previous financial year.
Turnover increased by 28% on the year to total £1.84bn.
See also: Jump in profits for Openfield Agriculture
The UK accounted for £1.72bn of total turnover, with the rest of the world accounting for the remaining £119m.
In 2022, Frontier employed about 1,100 staff, split between administrative, processing and distribution roles.
Earnings related to crop inputs accounted for 57% of the group total, while grain-related earnings accounted for about 41%.
Frontier chairman Jose Nobre said: “The first half of the grain marketing year was flat, with a large Black Sea wheat harvest weighing on the market. Everything changed on 24 February 2022 following the Russian invasion into Ukraine, and the resultant shock to commodity and energy markets was seismic.
“Old and new crop prices rose to record levels and presented an opportunity for arable farmers to lock into some exceptional gross margin opportunities.”
Mr Nobre added that the rapid rise in grain prices created an opportunity for Frontier to hedge new crop grain contracts for its customers, providing them with total certainty and security.
“Frontier’s grain trading, and grain handling operations performed well in very challenging conditions – maximising import and export opportunities and overcoming the unusual trade flows resulting from the Ukrainian invasion,” he said.
Source: Farmers Weekly