EINBECK (dpa-AFX) - KWS Saat has slipped deeper into the red in the first half of the 2023/24 financial year. The seed producer had to struggle enormously with negative currency effects. In addition, the corn segment weakened, for which the future outlook is likely to become gloomier. So far, this is no reason for the Executive Board to change the annual forecast for the Group as a whole. This is because the first half of the year is generally rather poor for the company for seasonal reasons. In addition, the sugar beet business is expected to grow more strongly than previously thought. Nevertheless, the stock market responded to the news with a clear markdown.

As one of the weakest stocks in the SDax, the share price fell by around 5.6% to 48.70 euros in the morning, its lowest level in almost four years. At the time, in May 2020, the share had started a longer upswing that led to a record high of EUR 80.90 a year later. Since then, the share has lost almost 40 percent of its value.

Analyst Charley Bentley from investment house Jefferies had already expected a negative price reaction in view of the recent weak business performance. However, the industry expert also pointed out the minor importance of the first half of the fiscal year: The Group achieves the decisive results in the third quarter.

KWS Saat's core markets are in the northern hemisphere. There, the most important sources of net sales - corn and sugarbeet seed - are sown in the months from February to May. The first six months, which run from July to December at the Group, thus reportedly account for a maximum of a good third of total net sales for the fiscal year.

This time, however, KWS Saat also had to contend with currency problems. Above all, the devaluation of the Argentinean peso had a negative impact, it said. The South American country is suffering from hyperinflation. The Group's costs also increased.

In the maize business, the planned withdrawal from the sale of soybean seed in Brazil had a negative impact, and business in the USA also declined. Even with significant growth in the cereals and sugar beet segments, this weak development could not be offset.

Group-wide sales in the six months to the end of December fell by eight percent year-on-year to just under EUR 519 million. The loss before interest and taxes (EBIT) grew by more than a third to more than 96 million euros. At the bottom line, the loss widened even more to just under 109 million euros.

For the year as a whole, the Executive Board is still aiming for an increase in turnover of three to five percent on a comparable basis, after 1.8 billion euros. However, currency effects and changes in the portfolio have been factored out here. The operating margin (EBIT margin), which was still negative in the first half of the year, is expected to come out at plus 11 to 13 percent for the year as a whole.

However, the Executive Board has adjusted its targets for the Group segments: The management is less confident than before for the Corn and Vegetables segments and now expects a slight decline in sales for the year.

Revenue in the sugar beet segment, on the other hand, is expected to increase significantly. Previously, the Executive Board had only expected a slight increase here. In the first half of the year, the segment benefited from the fact that farmers in several European countries ordered their seed earlier than usual./tav/stw/mis