“We see good operating momentum going into the final quarter of our fiscal year and we continue to look for tuck-in acquisitions,” said Jack Bendheim, CEO of the New Jersey based animal nutrition and health company.
Phibro reported revenue for the three months up to March 2014, of $173 million, an increase of 7% on the same period last year.
It said the good earnings performance was primarily generated by $13.9m of growth in the animal health segment.
The company, which had a successful IPO last month, said earnings before interest, taxes, depreciation and amortization (EBITDA) were €22m.
But it recorded lower revenues for its mineral nutrition division.
Animal health segment performing
Net sales for Phibro animal health products reached $107.8m, a jump of $13.9m on the quarter in 2013, due to volume growth of medicated feed additives and other, nutritional specialty products and vaccines.
The medicated feed product division saw growth of $8.7m or 12% for the three months, arising out of demand in the Asia Pacific and Latin America regions.
Greater dairy sector usage of its nutritional specialty products saw revenues for that segment jump $2m, or 14%, but the company said higher prices were also a factor.
Its vaccine business grew $3.2m, with Phibro again citing increased volumes in most markets as the driver.
Dip in mineral nutrition sales
Mineral nutrition net sales were down $49.9m in the quarter – a dip of 4% on Q32013.
“Our earlier decision to deemphasize low margin, volatile lysine sales accounted for $0.7 million of the reduction. The remainder of the sales decline was principally due to reduced average selling prices due to lower underlying raw material commodity prices, partially offset by higher volumes,” said the US animal nutrition firm.
Earlier this month, Dallas Salazar, an independent trader and former financial analyst with AIG and Merrill Lynch, said future growth for Phibro lies in its ability to pin down strategic opportunities to license, joint venture, and partner with competitors and new developers.
Best of breed picks
“The biggest competitive advantage that PAHC has in this niche is its size and network. It is the brand name in this space and a landing place for developer ideas that want to launch into quicker ramp ups in sales or for smaller companies who don't want the hassle that comes from developing a sales force and all the other headaches of launching product.
Similar to how larger pharmaceutical companies get to cherry pick the best new drugs post FDA approval, PAHC gets to choose what products to license and bring to the table for the clients. Being able to quickly and cost effectively improve the spectrum of its services and pick up newer, best of breed solutions is a benefit that cannot be correctly valued,” said the analyst.
In 2013, Phibro ploughed $37.3m into investments, which included the acquisition of OmniGen Research (OGR) – a firm that makes an immunity boosting additive for the dairy sector.
In January 2014, it bought the aquaculture business of Israeli firm, AquaVet, and, in June 2012, PAHC entered into a long-term license agreement with a global animal health group to share its vaccine delivery technology.