Glanbia, the Irish-based international dairy foods and nutritional ingredients group, has reported a “positive” first half performance with good growth in revenues, profits and margins, on the back of a strong performance from its food ingredients division.
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In its first-half trading statement issued today (10 July), the company said that as a result of the positive performance it expected earnings per share for the first half of the year to show an increase of around 20%, compared with 2006.
While Glanbia said its consumer foods and agribusiness and property divisions all performed broadly in line with expectations in competitive market conditions, the company’s food ingredients arm, its largest division, delivered “a strong performance”.
While Food Ingredients Ireland delivered an improved performance when compared with a difficult first half in 2006, the key performance drivers for this division were Food Ingredients USA and Nutritionals, the company said, including a full six-month contribution from Seltzer Companies Inc., acquired in 2006.
However, Glanbia said dramatic increases in raw material prices had led to short-term trading pressures in the group’s key international joint ventures in the UK, the US and Nigeria, as these businesses experienced an inevitable time lag in recovering or redressing these cost increases. While this is being actively managed, these operations encountered challenging trading conditions, which will be reflected in disappointing first-half performances. Operationally and in terms of market development, however, these businesses were performing well, the company added.
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By GlobalDataGlanbia said it expects its full-year performance will be in line with the upper end of market expectations, in spite of the cautious outlook for its international joint ventures in the second half.
“For the full year, there are some short-term factors in our international joint ventures that cause us to be a bit cautious at this time,” said group managing director John Moloney. “However, we expect to deliver strongly in terms of profits, margins and earnings and we are confident that the group is well on target to deliver strong double-digit growth for 2007 as a whole.”
The company’s interim results are due to be announced on 29 August 2007.
