“It is too early to say what impact the outbreak may have on the Group's future performance,” said Karen Saddler, global chief communication officer, Louis Dreyfus Company.
In China, where the epidemic began, operations resumed in early February, almost immediately after the Chinese New Year, as the food and feed sector has been a priority for the Chinese government, she told us.
“Elsewhere, trading and operations continue to run smoothly for the time being, and we are ready to adapt to a fast-changing environment.”
LDC, she continued, is focused on ensuring the health and safety of employees, customers and suppliers, and preventing further spread of the virus, while providing raw materials for food and feed production to customers and consumers worldwide.
“In particular, we have international and national travel restrictions in place, and a number of LDC locations are working on a split team or remote work basis, with business continuity plans in place for assets.
“We continue to monitor the situation closely, including LDC’s senior management and global/regional/local task forces, ensuring compliance with WHO and local government instructions to keep our people healthy and safe, and to avoid business disruptions as much as possible to keep the food supply chain operating.”
LDC's chief executive, Ian McIntosh, told Reuters yesterday that he expects food demand to hold up during a coronavirus epidemic as consumption focuses on staples and buyers stockpile around the world.
Food and feed demand would also be supported by China’s rebuilding of its pork industry after the African Swine Fever (ASF) epidemic, as well as short-term spike in demand, as the coronavirus develops, he said.
Lower profits
On Monday this week, LDC reported a fall in profits for 2019.
Its consolidated financial results for the year ended December 31, 2019, showed EBITDA from continuing operations at US$836m, compared to US$1,064m in the year prior. Income before tax – continuing operations was at US$295m, as opposed to US$402m in 2018, and net income Group share at US$230m, set against the US$364m earned in 2018.
However, the CEO called the financial performance solid, given the multiple challenges last year such as ASF, geopolitical instability, continued US-China trade tensions and general market oversupply.
“We have the right strategy and it is on track, as we move to become more of the value chain, integrating transparency, sustainability and traceability at all stages of our activities,” added McIntosh.
