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ForFarmers will continue its upward trend in the first half of 2024
ForFarmers achieved excellent results in the first half of 2024. Although turnover took a significant hit, both organic feed sales and EBITDA (profit without interest charges, tax liabilities and depreciation) increased. Pieter Wolleswinkel, CEO of the listed animal feed group, says he is proud and satisfied. The announced takeover of Van Triest Veevoeders reinforces that feeling.
Looking at the key figures, the independent volume increase of 2%, adjusted for the sold Belgian activities and the acquisition of Piast in Poland, is perhaps the most striking. In a competitive market with animal numbers under pressure, that is not a bad performance. The compound feed volume sold increased by 0,7%.
On track for profit
Turnover recorded a decline of around 15% to €1,35 billion due to lower raw material prices. EBITDA, an important indicator of net profit and an important metric for investors, shows a strong increase of 114,7% and amounts to €43,8 million. Last year ForFarmers suffered a limited loss, but this year they are clearly on course for black figures. All country clusters contribute to this. Also in the United Kingdom, where significant reorganization is still taking place, figures are again in the black. Wolleswinkel does acknowledge that it is becoming increasingly difficult for the so-called free feed companies on the British market, because integrations are increasingly mixing the raw materials themselves.
Earnings per share for 2024 are provisionally set at €0,05. Wolleswinkel credits the improved profitability in the past quarter to strengthening its market positions. According to him, this is a result of the local approach that is appreciated by customers. Furthermore, ForFarmers says it can distinguish itself with cattle feed in terms of knowledge and expertise by demonstrably reducing the CO2 footprint, which FrieslandCampina, among others, is strongly committed to. In the intensive sectors, they say they are setting sales prices competitively in order to maintain or regain market share.
The CEO also expresses his satisfaction with the integration of the feed company Piast in Poland, acquired last year. He further describes the acquisition of Van Triest Veevoeders, announced in June, as an important strategic move. "With this acquisition we are fully committed to a market with clear growth potential," says Wolleswinkel. The competition authorities have now approved and the deal is likely to be completed in September. The company will then continue as Van Triest CirQlar, but will fully integrate with ForFarmers.
The stock price is still lagging behind
In the meantime, ForFarmers has already been on the way back for a year, because the recovery that started started in the third quarter of 2023. This has not yet led to a strong improvement in the stock market value in relation to the potential of the company, although a cautious upward trend is visible. However, based on the figures presented today, it seems only a matter of time before the €3 limit on the Damrak is passed again. The intended return of 10% on increased investments is now being achieved again. This means that ForFarmers is ahead of schedule, because this is not the goal until 2025. However, they are keeping their fingers crossed, because the markets are and will remain volatile.
Lots of confidence
Nevertheless, ForFarmers has a lot of confidence in the future, the management explicitly states. The further shrinkage of the livestock herd will certainly cause problems, but they are no longer concerned about this in Lochem. "This also brings opportunities to make acquisitions, for example," Wolleswinkel said in an explanation of the half-year figures. As an example, he points to the acquisition of De Hoop Mengvoeders in 2020. This was realized when the broiler sector was going through a slump and has now given ForFarmers a good position in that market.
Wouter Job
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