France's Avril sees further profit rises helped by biodiesel

France’s Avril said an improved performance in biodiesel and other sectors powered a 26% jump in core profit in 2018 and will drive further rises until 2023, but cautioned the farm and livestock markets to remain under pressure.

An EU regulation adopted last year confirmed that crop-based biofuels can be used in up to 7% of fuels and partly regulated Argentine biodiesel imports, which had disturbed the European industry in the past years.

Avril’s earnings before interest, tax, depreciation and amortization (EBITDA) rose to 154 million euros ($174 million) on sales of 6.1 billion euros, down 2% from a year earlier, it said in a statement.

Net profit was 16 million euros last year, against a net loss of 56 million a year earlier.

The company said earnings had mainly been supported by its edible oil activities and renewable chemistry branch Oleon. The stabilization of the biofuel market also allowed it to improve its performance in oilseed processing and biodiesel production.

Avril’s vegetable oil division Saipol, parent of the group’s biodiesel activities, still posted double-digit losses last year and was expected to record a single-digit loss this year as competition from Indonesian biodiesel imports would continue to weigh on margins, Puig added.

Saipol was expected to become profitable again in 2020, notably by boosting exports, he said.

“Saipol did not export any biodiesel two years ago and we did 500,000 tonnes last year, essentially (to) northern Europe,” Puig said.

The European Union scrapped duties on Argentine and Indonesian biodiesel last year in response to a ruling by the World Trade Organization.