Performan nutrition engine behind Glanbias earnings growth

Performan nutrition engine behind Glanbia's earnings growth

Glanbia today (20 August) reported an increase in half-year profits, with the Ireland-based group again boosted by higher earnings from its performance nutrition business.

Net profit rose 3.5% to EUR84.1m (US$111.8m) in the six months to 5 July. Glanbia, which also sells consumer dairy and dairy ingredients products, posted EBITA of EUR129.5m, up 6%. Revenue increased 8.1% to EUR1.8bn.

The group's performance nutrition arm, which includes brands like Optimum Nutrition whey powder, saw its EBITA jump 27.7% to EUR42.9m. Revenue increased 17% to EUR374.6m, driven by increased sales volumes.

The company's Dairy Ireland division, which comprises consumer brands like Avonmore milk an agribusiness unit, saw sales and EBITA fall. Glanbia said its consumer products business was "relatively stable", with the agribusiness arm weighing on the results.

Glanbia's ingredients business, its largest by sales reported higher revenues, thanks to price hikes but lower EBITA due to foreign exchange. On a constant-currency basis, EBITA inched up 0.5%.

The company said today it would invest EUR60m in its ingredients arm, to add "further value to our whey stream", a move that will support its performance nutrition arm.

Glanbia kept its forecast for an 8-10% rise in annual adjusted earnings per share.

"Despite FX headwinds, Glanbia has delivered another solid interim performance. The H1 out-turn leaves the business well positioned for the remainder of 2014," Davy Research analyst Cathal Kenny said. "Overall, the business remains in excellent health, exhibiting an ideal mix of earnings growth, robust returns and capital discipline."