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Treatt Fiscal 2012 Revenue Falls on Orange Oil Price Drop
Posted: January 3, 2013
Treatt PLC's profit and revenue fell during fiscal 2012, which the company deemed one of its "toughest years on record for R.C. Treatt," during which its business unit was hurt by a tough economy and a drop in orange oil prices. (Click here for more on the company's results and orange oil pricing.)
As a result, the company plans to refocus and further modernize its R.C. Treatt unit in order to drive future growth in the group’s profitability. Meanwhile, Treatt's cosmetic ingredients division Earthoil, which specializes in organic and fair trade, is expected to make steady progress as a niche supplier to the cosmetics industry. Treatt also said fiscal 2013 has started at a "steady pace" and it expects the first quarter will significantly improve from a year earlier.
For the fiscal year ended Sept. 30, 2012, total group revenue fell to £74 million from £74.5 million a year earlier, impacted by a 60% drop in orange oil prices over the year in its R.C. Treatt unit, which hurt margins.
Excluding taxes and a charge of £598,000, the group's profit was £5.1 million, which was down from £6.4 million a year earlier. Earnings before interest, tax, depreciation and amortization for the year, excluding the exceptional item, fell by 14% to £6.9 million from £8 million a year ago. Operating profits were down 18% at £5.6 million compared to £6.9million a year ago.
Sales in the U.K. grew by 12%, although the company said demand was very weak across the rest of Europe, with sales to France and Germany under particular pressure. The group continued to perform well across Asia and the Americas. Treatt said it has increased its focus on the beverage sectors, where sales of citrus and natural ingredients are growing, while maintaining a strong foothold in aroma and specialty chemical ingredients in flavor and fragrance.
For Treatt’s USA division, year-over-year sales grew by 4.5% in U.S. dollars and 2012 has been a steady year for Earthoil. Although year-on-year sales for Earthoil fell 3%, this was mainly due to tough comparisons since the prior year’s sales had included a substantial shipment that was delayed from 2010. On a like-for-like basis, Earthoil sales grew 12% and resulted in a 22% jump in segment profits for the year.