Food and agri-business group Origin Enterprises reported today that pre-tax profits of €11.3m for the six months to the end of January, dipped from €17.1m a year earlier. Revenue declined by 16% to €596.8m. Earnings per share were down 22% to 8.68 cent and profits in the food division were down 12% to just over €8m, while the agri-nutrition business posted a 21% drop to €14.9m.

Davy analyst,  John O'Reilly, commented: "Origin Enterprises anticipates a FY2010 EPS outturn of c.33c, is in line with consensus. Guidance is held notwithstanding a year-on-year (yoy) decline in the first half to end-January. For this period, adjusted EPS declined by 22% (16% like-for-like). But with annual profit so weighted towards H2 (80%), this period is critical to the expected result; we cannot extrapolate from H1. We are forecasting adjusted EPS for the current year of 33.1c, 5.2% below last year's level. An outcome in line with consensus would be a good achievement in the current circumstances of depressed grain prices and profitability. The principal risk to achieving this at this point would be adverse weather as this restricts fertiliser application though animal feed ingredient demand would be boosted.

H1 recorded a very good contribution from its half-interest in Welcon, Europe's largest fish-meal producer. Origin reports that Welcon benefited from increased European aquaculture feed production and lower South American fish-meal supply. On a like-for-like basis, this JV's contribution may have been ahead by some 10% yoy.

On a like-for-like basis, EBITA (earnings before the deduction of interest, tax and amortization expenses) in agri-nutrition declined by 16% on an 11% like-for-like decline in revenues; the latter reflected the impact of lower global fertiliser and feed ingredient pricing. Origin expects a positive performance for the full year from Masstock whose results are almost exclusively second-half weighted.

In food division, cost savings (some €6m on an annualised basis) have contained the negative volume and price effects of a challenging Irish consumer. Absolute EBITA here declined by 12%.

The group's associate leased farming activity in Ukraine and Poland had successful harvests. It is targeting to harvest 16,000 ha this year (13,000 ha last year)."

BP offshore Brazil: BP today announced a deal that it says will deliver a material exploration position in the deepwater offshore Brazil and significantly enhance its position in core strategic areas

In a broad-ranging deal, BP will pay US firm Devon Energy $7.0 billion in cash for assets in Brazil, Azerbaijan and the US deepwater Gulf of Mexico. These include interests in ten exploration blocks in Brazil, including seven in the prolific Campos basin; a major portfolio of deepwater exploration acreage and prospects in the US Gulf of Mexico; and an interest in the BP-operated Azeri-Chirag-Gunashli (ACG) development in the Caspian Sea, Azerbaijan.

In addition, BP will sell to Devon Energy a 50% stake in BP's Kirby oil sands interests in Alberta, Canada, for $500 million. The parties have agreed to form a 50/50 joint venture, operated by Devon, to pursue the development of the interest. Devon will commit to fund an additional $150 million of capital costs on BP's behalf.

Economic View; UK being left behind?: Goodbody economist, Deirdre Ryan, comments - -"The economic recovery is well in train in the great majority of developed nations at this stage. However, the UK economy has failed to gather any degree of momentum. True, the economy only exited recession in the final quarter of last year and is thus lagging the global recovery in any case. However, the first quarter of the year has seen output growth slow compared to that seen in Q4. According to the NIESR, GDP growth was a meagre 0.3% in the three months to February, only half the pace seen in the three months to January. In particular, output growth in the industry sector slowed from 1% in the quarter to January to 0.5% in the Dec – Feb period, so it seems this sector is behind the moderation in the overall growth rate.

Official industrial production figures reiterate this weakness in the UK industry sector, with data released yesterday indicating an unexpected contraction in manufacturing in January (-0.4% mom), with the annual rate continuing to linger in negative territory (-1.5% yoy). By contrast industrial production growth has moved well into positive territory across much of the Eurozone. With signs that activity in other sectors of the UK economy beginning to stall, in particular the housing market, and with consumer spending showing little momentum either, the recovery in the UK economy remains in a very fragile state. Much of the weakness has been attributed to the “snow effect”, however, and we will have to wait and see if data show any signs of stability in the coming months. This economic weakness, along with more dovish comments from members of the MPC, has increased the threat of further quantitative easing. The most visible impact on markets? A further drop in the value of sterling (c.91p relative to the euro this morning relative to c.87p three weeks ago)."

China may have to look to interest rates and the currency for further monetary tightening: Davy chief economist, Rossa White, comments  - - "The latest price data from China show that further monetary tightening is likely in the months ahead. Chinese authorities have raised reserve requirements for banks twice this year. Those measures impact with a lag and February money supply data suggest that the policy has had at least some effect. But CPI and PPI inflation is still rising at a quicker pace than economists have predicted. And asset price inflation is perhaps the bigger worry in the background. Monetary tightening may be broadened to include the Chinese interest and exchange rate later this year.

Chinese CPI inflation jumped to 2.7% in February from 1.5% in January. That was the highest annual rate since October 2008. It also eclipsed economists' estimates for a rise to 2.5%. Factory-gate prices are recovering more quickly. Having dipped 8.2% in the year to September last, prices are now inflating again at a rate of over 5%. The market expected the year-on-year rate to reach 5.1% in February from 4.3%. In the event, it reached 5.4%. Poor weather was a contributory factor in the first couple of months of the year. As a result, food prices surged. Price pressure may ease a touch in that part of the basket in the short term, but the trend overall is firmly higher.

Yet the tweaking of reserve requirements has at least slowed the gallop of the money supply. The year-on-year rate of M2 growth peaked just below 30% last November and it has nudged down to 25.5% since. That is still too high for comfort, but it was threatening to get out of control. Nonetheless, residential prices increased 10.7% year-on-year in February — not far short of the peak price inflation in the last cycle (they fell in the 12 months to early 2009). In future, all central banks will allow asset prices to influence policy decisions more than in the past. The Chinese may take the lead in that regard over the next year."

US markets

On Wednesday, the Dow rose 3 points 10,567.

The S&P 500 rose 0.45% and the Nasdaq Composite rose 0.78%.

Gold is trading at $1105.10 down $3.10 from Wednesday's spot price close in New York.

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