ForFarmers gets more profit from less feed

Although the feed sales figures of ForFarmers are again showing signs of recovery, profits are on the rise again after a lesser period. In their own words, this is the result of cost savings. Due to the corona crisis, the listed animal feed company does not dare to make forecasts for the rest of this year.

Operating profit (Ebitda), an important parameter for investors, rose by no less than 1% in Q44. Gross profit is up 4,4%. Further financial key figures are not mentioned. ForFarmers owes the increase to lower costs. The measures are apparently bearing fruit. For example, a factory was closed in the United Kingdom, while in the Netherlands the production of organic animal feed was clustered at the subsidiary Reudink in Lochem.

The figures can be seen as a break in the trend, as net profit fell to a paltry €17,7 million last year. 2018 was also not a top year, partly due to various procurement failures in the raw materials markets. And in order not to lose customers, the listed animal feed company took the loss itself.

Shrinkage on home market
According to CEO Yoram Knoop, there were no longer any unfavorable purchasing positions in the past year. The CEO is also pleased with a better mix of products. However, the flag in Lochem will not go up, because the sales figures are not rosy. Total feed sales fell by 5,3%, which is quite a bit out of the volume. The compound feed volume sold fell by almost 4%. 

Sales are declining, especially in the Netherlands, Belgium and the United Kingdom. Feed sales in Germany and Poland were stable. On the home market, the smaller livestock is the cause of declining sales figures.

No forecasts
How ForFarmers will approach the future is still uncertain. Initially, a new strategy was to be launched this spring, but this has been shelved due to the corona crisis. Due to the corona crisis, the animal feed group is also refraining from making forecasts for the rest of this year, as many listed companies are currently doing. In the press release, Knoop says that corona has not yet had an impact on the core processes.

Wouter Job

Wouter Baan is editor-in-chief of Boerenbusiness. He also focuses on dairy, pig and meat markets. He also follows (business) developments within agribusiness and interviews CEOs and policymakers.

w.baan@boerenbusiness. Nl

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