News Annual figures 2018
Annual figures ForFarmers push share price down
Although the turnover of ForFarmers in 2018 increased by more than 8% to €2,4 billion, the operating profit shows a decrease. The weaker performance is causing concern among investors. To turn the tide, more than 100 jobs will disappear at the animal feed company.
Before the turn of the year, ForFarmers already gave a profit warning and so the group prematurely reported the poorer results. Operating profit (EBITDA) is an important financial parameter of the listed animal feed group. After a correction for the negative currency effects, this is a minus of 1,3% to €100,1 million.
Acquisitions
That is considerably lower than in 2018, when EBITDA still increased by 8,3%. The gross profit does show a growth: from 5,6% to €443,4 million. This is largely driven by the 4 acquisitions that ForFarmers made last year. This also boosted turnover, although that number says little about how the animal feed company is performing.
Partly as a result of the acquisitions, volume sales rose by 4,9% to 10 million tons, although the group also grew on an autonomous basis. The feed volume in the Netherlands increased by 2,8% to 4,54 million tons. That in itself is a great achievement, considering both the Dutch cattle and the pig herd has thinned out considerably in the past year.
dry summer
However, ForFarmers did not profit from the prolonged drought of last summer. This resulted in rising feed raw material prices, which could not be passed on in time in the feed prices. The logistics system was disrupted by the low water levels on the supply routes to the factories.
CEO Yoram Knoop speaks of a year with 2 faces. This is how ForFarmers joined the Polish market, which is seen as a strategic step for the future. At the same time, the extremely dry summer in the home markets caused logistical problems, and therefore higher costs.
Jobs on the way
On the other hand, it does not appear that ForFarmers has turned the tide, because the company indicates that the operating profit will probably also be significantly lower in the first half of 2019. Due to the poorer results, the group wants to save €10 million in costs this year.
The most striking measure is that between 125 and 150 full-time jobs will disappear, spread over the Netherlands, Germany, Belgium and the United Kingdom. This is approximately 6% of the total workforce.
Share takes a big hit
ForFarmers has also announced that it wants to allocate €30 million in the coming months for the purchase of its own shares. Although investors are probably concerned about the poorer results, this is mainly a measure that can support the stock price.
Nevertheless, the ForFarmers share received a significant blow on Wednesday morning, March 13, when trading started on the Damrak in Amsterdam. Half an hour after opening, the price was about 10% lower at €7,43 per share, the lowest level in 2 years. For 2018, investors will receive a dividend of €0,30 per share, which is the same as in 2017.
Wouter Job
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