News Half-year figures
ForFarmers issues positive profit warning
ForFarmers has indicated in an unusual update that the result in the first half of 2022 will be higher than previously estimated. This is due to positive developments abroad. For the second half of this year, they still have a blow to the arm.
The listed animal feed company reported very disappointing figures in the first quarter, when Ebitda halved compared to the same period last year. The higher raw material and energy prices in particular had an impact on the result. The upward trend started again in the second quarter. In the first half of 2021, EBITDA was €40,8 million, with a net profit of just under €18 million. This year, these figures will be slightly higher, while previously a substantial decline was expected.
This means that a strong recovery has taken place in the second quarter. In their own words, because the higher costs could be passed on to customers in the form of higher lump prices. The recovery is mainly abroad, it is stated without giving further details. The final figures will follow in mid-August. This does not mean that the leak is over, because last year former CEO Yoram Knoop described the half-year figures as very disappointing.
Finally good news
Nevertheless, the turnaround will sound like music to the ears of investors in particular. Since 2018, the results are deteriorated almost every quarter† A large part of the stock market value went up in smoke. The share trades at the beginning of July around the price of € 2,70, which is downright low. As a result, CEO Knoop had to make way for Chris Deen, who has been responsible for the last week. The share does have upside potential, analyst Guy Sips of the Belgian investment bank KBC Securities indicated last week. in an interview with Boerenbusiness† This was in response to the plans to merge the British activities with 2Agriculture.
Despite the better results, ForFarmers does not yet dare to look ahead to the second half of 2022. Due to the unrest in the raw materials and energy markets and the nitrogen uncertainty in the Netherlands, the uncertainty is too great. ForFarmers will, however, provide an update of its strategy, probably after the summer. Initially there were plans to move outside of Europe, but those plans are likely to be revised. Sips believes that ForFarmers will again focus on the existing European home markets: the Netherlands, Belgium, Germany, Poland and the United Kingdom. It is possible that a sixth country will be tapped within Europe.
Wouter Job
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