News Half-year figures
ForFarmers sees profits plummet
ForFarmers has had a difficult first half year. The listed animal feed group is having a hard time mainly on the Dutch market, where it is confronted with shrinking animal numbers. The profit is significantly lower.
The operating profit (EBITDA) for the first 6 months of this year is €35,8 million, which is a decrease of more than 30%. At the bottom of the line, profit has more than halved, bringing it to €11,9 million. The lower results don't come out of the blue. ForFarmers previously gave a profit warning off.
Volume growth thanks to acquisitions
In the 5 countries where ForFarmers is active, total feed sales are up 5,2% to 5,1 million tons. The compound feed volume in all these countries together increased by 7,2% to 3,6 million tons. This increase is a result of the acquisitions that the company made in the second half of 2018. In the Netherlands, Belgium and the United Kingdom, sales volumes do show a decline.
Yoram Knoop, the CEO of animal feed group ForFarmers, can look back on a disappointing half year. In addition to the decrease in volume, Knoop attributes the poorer results to unfavorable purchasing positions that ForFarmers has been struggling with for a few quarters in a row. The CEO says that those positions have now been closed and will no longer have a negative effect in the future.
No new factory in Germany
To reduce costs, ForFarmers (as announced earlier) will close 4 factories. By 2021, this should have resulted in a cost reduction of €10 million. In addition, Knoop indicates that the planned construction of a new factory in Germany† ForFarmers intends to absorb the slight volume growth through strategic partnerships with other parties. This is a cheaper solution that is also less risky.
For the rest, ForFarmers announces that it is working on a new strategy for the period 2020 to 2025. These plans will be unveiled at the beginning of 2020. The new strategy will pay explicit attention to government measures that affect livestock farming in Northwestern Europe.
Share down
Investors reacted negatively to the weaker figures this morning, August 15. The share, listed on Damrak in Amsterdam, was traded about 15% lower on Thursday, August 5, shortly after opening, at around €6,30 per share. More than a year ago, the value was still above €10.
Wouter Job
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