Agrofert Group Profits Tripled Last Year; Revenue Rose By CZK 4.54 Billion
After a steep fall in profits in 2018, Agrofert Group rebounded strongly last year, with profits tripling from CZK 1.67 billion to CZK 4.48 billion, similar to the profit margin seen previously in 2017, the year when then-Finance Minister Andrej Babis transferred his 100% stake into trust funds controlled by his family. Babis had been sole owner of the company since he founded it in 1993. Image: official logo / Agrofert website.
Czech Rep., Jun 2 (BD) – Agrofert Group has the largest market share in the Czech food and agriculture industries, with over 115,000 hectares under cultivation by its subsidiaries at the end of 2019. It is also the second largest player in the chemical industry, and controls substantial portions of other industries, including a media empire. The firm has a controlling share in around 200 companies in total, and employs 33,000 people, two thirds of them in the Czech Republic.
Last week the group announced new performance figures for 2019, including a triple in consolidated profits across the whole group year-on-year, from CZK 1.67 billion (2018) to CZK 4.48 billion (2019). Consolidated revenue increased by CZK 4.54 billion in the same period, to CZK 162 billion. This brings the conglomerate’s profits back up to similar levels as in 2017.
According to a press release from the company’s spokesman, Karel Hanzelka, most of the increase is due to strong performance in the chemical sector. He mentioned several examples of the group’s holdings in the food and chemical industries expanding their capacity, such as the modernization of a biological wastewater treatment plant at Deza, the construction of a new plastics rolling mill at Fatra, and the completion of an investment in a new fertilizer plant at Lovochemie Inc.
Issues related to Babis’s involvement in Agrofert have been the source of various legal disputes since he entered politics, including a long-running police investigation into allegedly fraudulent receipt of EU subsidies for an Agrofert-owned hotel complex, the Stork’s Nest [Čapí Hnízdo]. In 2017, then-Finance Minister Babis transferred his legal ownership of the company into trust funds controlled by his family and lawyers, to comply with a law regulating conflicts of interest in politics, known informally as Lex Babis. However, critics claim that Babis retains decision-making power in the company.