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ForFarmers well on track for best result ever
ForFarmers once again achieved excellent results in the third quarter. Strong organic growth was again evident across the countries. Sales volumes in the Dutch domestic market remained stable, despite the effects of the termination scheme now being clearly noticeable. Moreover, the return on invested capital is well above its target. The company is on track to significantly exceed its best annual result to date, as measured by EBITDA.
Total volume showed a 5,6% organic increase in recent months. This can be considered an excellent performance, significantly higher than in previous quarters. Including the acquisition of Van Triest and the consolidation of the joint venture in Germany with Team Agrar, volume increased by almost a quarter to 2,6 million tons. The volume of compound feed sold also showed a respectable organic increase of 2,6% to 1,6 million tons.
Over the first nine months of the year, total feed sales showed an autonomous increase of 3,5% to 7,8 million tons. During the same period, compound feed sales, adjusted for acquisitions, rose by 1,2% to 4,7 million tons.
EBITDA significantly higher
ForFarmers also performed better financially. EBITDA, the primary focus of investors, rose by 47,1% to €39 million in the third quarter. Over the first nine months, there was a 36,5% increase to almost €100 million. Last year, it took four quarters to achieve this result, even then it was considered an exceptionally strong year. The highest EBITDA to date was achieved in 2017 at €101,4 million. With one more quarter to go, this hurdle can easily be overcome. Return on invested capital, the company's sole objective, rose to 16% in the third quarter. The target for this is 10%.
It is good to keep in mind that in a market with falling prices it is generally easier for animal feed companies to monitor margins.
Very strong quarter
"We look back on a very strong quarter, in which we continued the good performance of the past two years," said CEO Pieter Wolleswinkel. With the takeover At Beukelaar Animal Feed, which produces 80.000 tons of feed, he expects to further optimize capacity utilization in the broiler sector. According to Wolleswinkel, the strong profit growth is primarily due to strict cost control.
ForFarmers' share price on Amsterdam's Damrak opened this morning up around 7% to above €4,50 per share, after a downward trend in recent weeks.
Wouter Job
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