ForFarmers issues profit warning

ForFarmers is suffering from the consequences of last summer's drought. That is why the listed group from Lochem (Gelderland) issues a profit warning just before the turn of the year.

In the third quarter, ForFarmers' result already showed a trend break and now the company says it is still lagging behind in breaking through the surged raw material- and energy prices. Due to the low water levels, a number of factories were not accessible by ship, which meant that part of the logistics had to be transported by road. All factories are now accessible by water again.

Share significantly lower
As a result, the extra logistics costs amount to €2 million. The integrations of various acquisitions also entail additional costs. The listed company therefore indicates that the Ebitda (measure of gross profit before overhead costs) will be 2% to 4% lower this year than in 2017. 

The ForFarmers share has clearly shown a downtrend since the summer. In mid-June the price was still above €12 per share, but on Monday December 17 the share opened on the Damrak in Amsterdam below €8. The stock later recovered somewhat, although analysts expect a further decline.

Wouter Job

Wouter Baan is Head of Meat & Dairy at BoerenbusinessAt DCA Market Intelligence, he focuses on dairy, pork, and meat markets. He also monitors (business) developments within agribusiness and interviews CEOs and policymakers.

w.baan@boerenbusiness. Nl

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