ForFarmers upbeat about earnings for first half of 2022

08-Jul-2022 - Last updated on 08-Jul-2022 at 09:54 GMT

Related tags ForFarmers energy costs

ForFarmers expects its underlying EBITDA in the first half of its 2022 financial year to be slightly higher than the relatively low level in the first half of 2021.

This is a result of positive developments in countries it operates in outside of the Netherlands.

In its trading update released on May 6, 2022, the Dutch compound feed manufacturer announced that some movement could be seen in the food chain with respect to passing on the higher raw material, energy, and fuel costs.

But it said then it was too soon to draw any conclusions from that. “It has since become clear that this trend has continued in a broad sense.”

Nevertheless, it struck a note of caution, saying that given the continuing uncertainties with respect to availability and consequentially prices of raw materials, energy, and fuel and the uncertain political climate in the Netherlands with respect to the agricultural sector, it will not provide guidance for the development of underlying EBITDA in the second half-year of 2022.

The results of ForFarmers' financial performance for the first half-year 2022 are due to be published on August 11.

UK merger

Last week, the group announced that ForFarmers UK and 2Agriculture would merge their businesses into a joint venture to serve a wider customer base. The deal is subject to approval from the UK competition authority.

The merged entities will have a balanced feed portfolio across species, with an expected combined sales volume of more than three million tons of compound feed per year.

ForFarmers UK said the move would strengthen its position in the UK’s promising poultry sector and at the same time creates possibilities to make the organization more efficient.

Caroline Vogelzang, director, investor relations, ForFarmers, said the combined broad geographic coverage will provide synergy and efficiency opportunities, in all aspects of the business. "The intended JV will also generate upside due to being able to combine the expertise and scale benefits from sourcing of raw material; it will also allow continued investment of the supply chain, enabling improved transparency around sustainability and the origin and quality of food."