The company, which endured a challenging first six months of 2023, saw a decrease in net revenues in the third quarter, versus a year earlier, driven by lower raw material prices and lower volumes, but its gross profit grew 4.3% on the back of a better product mix and a more local approach.
“Underlying total operating expenses were roughly stable. Energy costs were lower than last year. Although there were fewer employees in the group compared to last year, personnel costs were higher due to the collective labor agreement increases at the beginning of 2023. Underlying EBITDA increased by 33.6%.”
The company reported that, compared to Q3 2022, there were lower feed volumes sold in respect of all species. Total feed volumes were down -6.2%, with compound feed volumes dropping -5.7%.
Lower milk prices
Less feed was sold in the ruminant sector due to the steadily declining milk prices since the beginning of this year, combined with good weather conditions. The number of animals in the pig sector is at an all-time low, but the compound feed maker said volumes in this sector, nevertheless, remained relatively stable in Q3, when set against the first six months of 2023.
Slightly less feed was sold in the poultry sector than a year earlier. This was due to both the transition to Better Life welfare concepts in the Netherlands and to the ceasing of poultry feed production in Belgium, said ForFarmers. But the Polish market saw a good performance in respect of poultry feed sales.
Average prices in Europe for meat and eggs were higher in quarter compared to the same period in 2022. They were also higher than in the US, Brazil, and Canada, thus impacting Europe-wide export volumes, noted the feed producer.
Divestments
The Dutch group said the divestments of its assets in Belgium, finalized last month, and the acquisition of Piast in Poland, which is likely to close soon, will serve to strengthen the business, and bolster its long-term market position.
According to Pieter Wolleswinkel, CEO of ForFarmers, delivering good feed at a competitive price is key to the company’s growth strategy: “Together with farmers, we are working at making food production more sustainable. We are doing this very cost-consciously, especially now that the affordability of food is becoming increasingly relevant.”
Energy prices
Prices for raw materials and energy were much lower in the quarter than in the same period a year ago, reported the company. "At that time, the war in Ukraine threatened to create a major shortage of raw materials and energy, causing prices to rise significantly.”
Given current geopolitical developments, ForFarmers said there are ongoing concerns about availability of raw materials and their likely price trajectory, with more volatility expected in the energy and diesel markets as well.
Interim CFO
ForFarmers’ supervisory board has appointed Hans Kerkhoven as interim CFO. He takes on that role on November 27.
In August, the company announced that Roeland Tjebbes would resign as its CFO and member of the executive board at the end of December, in order to take on a similar position elsewhere.
