ABF said the hike in revenue for its agriculture division, AB Agri, which is active in over 70 countries globally, was driven by higher feed volumes, the impact of increased raw material costs in the UK on feed prices and sales growth from new business.
AB Agri sales increased by 13% and adjusted operating profit by 9%, it added.
In the UK, its compound feed operations benefited from increased consumption of poultry and better profitability in the pork market in terms of higher sales.
premix and starter feed business, performed strongly with increased sales volumes and new customers. “Volumes at AB Vista were driven by higher sales in Europe and North America, and profitability in our China feed business was much improved. Good sales progress was made across our new business ventures, in particular in Agrokorn, our Danish specialty protein business.”
ABF said a larger sugar beet crop compared to last year also increased the sales and contribution of AB Agri’s co-products activities.
However, reduced grain price volatility lowered the contribution from Frontier, AB Agri’s crop production and grain trading business, run as a joint venture with Cargill.
Michael McLintock, ABF chairman, said:
“In the first half, adjusted operating profit was in line with the prior year with growth in Primark, grocery, ingredients and agriculture offset by the expected decline in profit at AB Sugar.
“In the second half, we expect an acceleration in profit growth at Primark, as a result of margin improvement, and continued profit growth from our other non-sugar businesses. These should more than offset the decline in profit at AB Sugar in the balance of the year. As a result, our full year outlook for the group is unchanged with progress expected in both adjusted operating profit and adjusted earnings per share.”
José Nobre, formerly boss of Arysta LifeScience EMEA, recently took over from David Yiend as CEO at AB Agri.
Asked what his immediate goals were in the new role, Nobre told us in February:
“I have two key priorities. Firstly, to encourage technical developments, with investments in emerging feed technologies. Secondly, to expand AB Agri into new global markets, and build our international presence even further, while continuing to support and consolidate our position of strength in the UK.”