agrofert andrej babis

Petr Dubinsky

Babis’s Agrofert Sees Profit Plummet Amid Pandemic

Last year, the Agrofert Group’s consolidated sales fell by 0.7 percent year on year to CZK 160.98 billion. Profit fell by 16 percent to 3.76 billion crowns. The company says the main reason for the deterioration is the impact of the pandemic on the media services sector.

Until February 2017, the concern was owned by the then Minister of Finance and current Prime Minister Andrej Babiš, and due to the Conflict of Interest Act, he invested his shares in trust funds.

Last year, the company’s consolidated revenues decreased by 1.06 billion crowns, mainly due to their decrease in the chemical segment. According to Hanzelka, this was partially offset by growth in agriculture and food. According to him, the group reduced debts to banks by CZK 5.89 billion to the current CZK 33.8 billion.

The group cultivates 116,000 hectares of agricultural land in the Czech Republic, most of the land is leased, according to the spokesman, and in Slovakia, it farms on 20,000 hectares. At the end of last year, it employed about 32,000 workers, of which about 22,000 in the Czech Republic. The Group has 198 controlled companies, one jointly controlled, and six companies under the significant influence. In addition to agriculture and food, it also owns forestry companies, doing business in terrestrial technologies and technology, logistics, transport, and the media.

“Last year, the Agrofert Group returned to higher investment activity and, despite the coronavirus crisis, made most of the planned investments, with the total amount of investments reaching CZK 10.065 billion (excluding financial investments),” Hanzelka wrote. Among the most important was the construction of a new chicken farm in Vodňany, South Bohemia, the continuation of investments in a new crushing plant in the Hungarian company NT Kft., The completion of a warehouse at AdBlue in Reconciliation.

This year, the company wants to complete the chicken farm in Vodňany and modernize chicken slicing in Modřice, start the third stage of greening Synthesia’s energy source, build new breeding halls on the Bílov farm, invest in expanding dairy cattle in Petrovice or reconstruct cowsheds in Nepolis.

In June, the European Parliament condemned Babiš’s conflict of interest by a clear majority. Non-legally binding resolution, which calls on the European Union institutions and the Czech authorities to take a more vigorous approach to subsidies for the Agrofert holding, was supported by 505 legislators. There were 30 MEPs against and 155 abstentions.

The approved text is a response to the April publication of the European Commission’s final audit report, according to which Babiš has a conflict of interest, as he controls the Agrofert holding even after he has invested it in trust funds. Therefore, according to the commission, the company is not entitled to subsidies from the EU structural funds. Babiš disagrees with this conclusion and claims that by transferring the company to the funds he complied with the Czech law on conflict of interest. He described the resolution as interfering in the internal affairs of the Czech Republic and said that deputies were trying to influence the October parliamentary elections in the country.

In the resolution, MEPs called, among other things, for the Czech authorities to protect Czech taxpayers’ money and to force Agrofert to repay all unduly paid subsidies. The Czechia should create a fairer and more transparent system of distribution of EU subsidies, says European legislators. The Czech government opposed the European resolution.