ForFarmers sees no letup in raw material and energy prices as Ukraine-Russian crisis worsens
The company released its annual results for 2021 today.
Yoram Knoop, CEO of ForFarmers, said that, while the company has been making great strides in its cost savings plan, it nevertheless, saw a sharp decline in underlying EBITDA last year, which dropped 18.7% to €78.2m (US$87.4m).
Revenue was up 13.5% to €2.6bn due to acquisitions and the fact that the company was able to partly pass on higher prices of raw materials.
Its gross profit increased 0.7% to €436.3m due to acquisitions but was offset by the impact of high raw material prices and like-for-like volume decline.
Underlying net profit for 2021 was down 37.4% to €29m.
Looking at its Total Feed portfolio, which consists of compound feed, specialties, co-products, seed and other products such as forage, the company reported a 0.8% reduction in volumes sold to 9.7 million tons; business was virtually stable in the Netherlands and Belgium as well as in Germany and Poland but activities were hit in the UK.
‘A turbulent year’
Knoop, who is set to exit the CEO role in April, called 2021 “a turbulent year” for the group and for its customers. “We were impacted by challenges including rising input costs, animal diseases and increasing pressure on the agricultural sector.”
“Our results were affected by the fact that prices for raw materials rose faster than the prices for products sold by and to our customers. In these circumstances, it proved difficult in the chain to pass on the significant rises in energy prices on top of the higher raw material prices. In addition, we had an incident involving unfavorably priced sales contracts in Germany in the first half year, putting pressure on our margins.”
He noted, however, good recovery for the business in the Polish market and a solid contribution from the poultry and equine focused acquisitions it finalized in early 2021, De Hoop Mengvoeders and Mühldorfer, respectively.
Indeed, the De Hoop deal places the poultry sector as the largest now in ForFarmers’ portfolio, ahead of ruminants and swine.
ForFarmers anticipates continued pressure on margin and costs this year. It also expects its underlying EBITDA to show a substantial decline (YoY) in the first half year of 2022, said the CEO.
