Glanbia said it remains cautious about the year ahead after experiencing a “difficult” 2009, but is optimistic the group can return to earnings growth this year.
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Strong cost management together with an “excellent” operational performance could not fully offset an “unprecedented” trading environment, Glanbia said in a trading update today (6 January).
The impact of the downturn in global dairy markets in the first half of the year, lower US cheese prices and with weak consumer demand resulted in a “difficult year” in 2009 for the firm.
However, Glanbia said it expects to report adjusted earnings per share of 30 to 31 cents for 2009, in line with revised adjusted earnings per share guidance for the full year, which was announced on 30 April 2009.
Glanbia’s US cheese & global nutritionals divison is expected to deliver a good result that is ahead of 2008. “Solid” organic growth, new products and the full-year effect of the acquisition of Optimum Nutrition in August 2008 more than offset the effect of lower US cheese prices, the group insisted.
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By GlobalDataNonetheless, as previously announced, the result from Glanbia’s Irish dairy business will be considerably lower than 2008 as the decline in global dairy markets created a “very difficult environment” for the dairy ingredients business.
“Trading conditions improved somewhat in the later stages of 2009 with an uplift in global dairy and US cheese markets,” Glanbia said.
“However, markets remain volatile and consumer sentiment is fragile. Glanbia board and management remain cautious at this early stage of the year but based on current economic and dairy market forecasts expect a return to earnings growth in 2010 in the order of 6% to 8%,” the group said.
Glanbia is expected to announce 2009 full-year results in early March 2010 for the year ended 2 January.
