It said the limited decrease in its earnings before interest, taxes, depreciation and amortization (EBITA) was due to temporary higher advisory costs relating to the planned acquisition of Tasomix in Poland and to higher energy and diesel costs.
The company's Q1 and Q3 trading updates are qualitative only; no financial details are disclosed. “On 16 August, we will publish our half year results, including the numbers.”
ForFarmers, in its trading update, noted milk prices have been declining since Q4 2017 but are higher than this time last year. It said average European pig prices started to decrease in October 2017 and are currently lower than in the comparative period last year. Prices for broilers are higher than in the first quarter of 2017 and show a mild upward trend, while egg prices are also higher than a year ago, but started to decline at the start of 2018, it added.
In terms of gross profit, ForFarmers reported growth in all the markets in which it operates, while noting a negative currency translation impact of sterling.
Volumes for its Total Feed branded business - products combined with specialist advice and tools aimed at delivering better returns, healthier livestock and greater efficiency on livestock farms - grew in the Dutch, German and Belgian markets but decreased in the UK, it added.
Volume growth in Total Feed activities, in terms of percentage, was higher than in compound feed, it said.
“Volume development is positive in all clusters and we are also satisfied with the improvement of our gross profit. We are on track with the implementation of the various pillars of our Horizon 2020 strategy and are looking forward to the moment that we become operational in Poland,” said Yoram Knoop, CEO of ForFarmers.
BioMar expects a 'good year'
Meanwhile, Danish fish feed group, BioMar, reported a lower result than expected in Q1 2018, but said it is not adjusting its expectations for its full year results.
Its revenue for the quarter was DKK 1,884m (US $303m) compared to DKK 1,996m in Q1 2017. It reported its EBIT for Q1 2018 was DKK 35.2m (US$5.6m) against the DKK 51.5m it recorded in Q1 the year prior.
Sales volume increased in the quarter, compared to Q1 2017, which mainly reflected the contribution from the acquisition of Alimentsa in Ecuador, it said.
In salmon, the company has been challenged by lower volumes: “It has been a tough competitive scenario with pressure on margins, but we expect it [the salmon business] to improve during the year. In Q1, we concluded negotiations with key customers in UK and we are confident that 2018 will turn out to be another good year, where BioMar will push innovations to the market, setting the agenda in the industry,” said Carlos Diaz, CEO BioMar.
While its operations in core markets were challenged in Q1 due to tough weather conditions, BioMar said countries such as Ecuador, Turkey and China performed well.
“We expect to continue delivering solid results from the new business units in Ecuador and Turkey, and we will carry on building our position in China together with [the] Tongwei Group. In Ecuador, we are in the midst of a very promising integration of Alimentsa into our group and we expect to create further synergies during 2018. In Turkey, we have,within a relatively short timeframe, managed to become a significant feed supplier in one of Europe’s most important aquaculture regions.
“We have confidence that 2018 is going to be another good year, including our traditional markets comprised by our salmon division and EMEA division,” said Diaz.