French agro-industrial group Avril has seen a notable recovery in the second half of 2018, after cutting its biodiesel production and seed crushing at the start of the year due to an influx of Argentine biodiesel into Europe.
The group’s earnings before interest, tax, depreciation and amortisation (EBITDA) rose to €154M (US$174M) for the year ending 31 December, up 26%, and net profit was €16M (US$18.2M) compared with a net loss of €56M (US$63.8M) a year earlier.
“2018 was clearly a year of two halves,” said Avril CEO Jean-Philippe Puig. “During the first six months, the group had to deal with an unfavourable economic context and focused on its costs. The second half ended more satisfactorily, notably under the effect of decisions that clarified the horizon with respect to regulatory issues, such as the future for biodiesel in Europe.”
“In December 2018, the new European Renewable Energy Directive (REDII) maintained the level of incorporation of first generation biofuels at 7% [until 2030] and introduced restrictions on the highest emitting biofuels,” Avril said in a press release on 4 June.
In January 2019, the EU also announced it was in favour of a compromise to limit unfair competition from Argentine soyabean biodiesel, by fixing a quota and a minimum price below which anti-subsidy duties would be imposed.
The stabilisation of the market allowed Avril to improve its performance in oilseed processing and biodiesel production.
Avril was set up in 1983 to develop French production of oilseed and protein crops. It operates in five business lines, with Oilseeds Processing encompassing oilseed crushing, refining and the sale of oils, biodiesel and meals.
In November 2018, the company launched Oleo100, the first 100% rapeseed, renewable and traceable biofuel produced by French agriculture, aimed at haulage contractors and local government bodies.
Avril said its Oils & Condiments line, under the Lesieur subsidiary, had experienced a difficult year. However, the line would benefit in 2019 from the repositioning of its Puget and ISIO4 brands and the launch in French retail outlets of the Italian olive oil brand Costa d’Oro, acquired in May 2018, and ranking Avril third in the global market for branded olive oils as a result.
In the Specialties Business line, Avirl’s oleochemicals subsidiary Oleon had been hit at the end of the year by the economic slowdown in Europe, but the downturn was offset by Oleon’s positioning in specialty products with high added value.
“All these activities, nevertheless, remain subject to the external risks inherent in agriculture and livestock farming, which are still experiencing difficulties,” Avril said.