Nutreco reports half-year revenues of € 2.1 billion and EBITA of € 41.6 million. Revenue was € 2,127.7 million, a decrease of 8.5 per cent from first half 2008 mainly due to 7.0 per cent lower volumes. Performance was in line with the outlook in the first quarter trading update.
The agreed acquisition of twelve compound feed plants from Cargill in Spain and Portugal will strengthen Nutreco's leading market position.
Company-wide programmes to reduce working capital and operational costs are contributing to the result. Nutreco secured financing with a syndicated loan and a private placement and maintained a strong balance sheet.
The company announced an interim 2009 dividend of €0.20 – at the shareholder's choice of cash or stock.
Wout Dekker, Nutreco CEO, commented: "The Nutreco performance in the first half year is in line with our outlook given in the Q1 trading update.
"Our premix and feed specialties business performed well and the fundamentals in the fish feed business are good, although demand for fish feed in Chile is reduced as a consequence of the ISA virus in salmon farming. The compound feed business in the Netherlands suffered a major loss at the beginning of the year, but measures have been taken to restore profitability.
In Spain, the poultry business returned to profitability due to lower feed prices and higher poultry prices. We are strengthening the compound feed business in Spain and Portugal, with the acquisition in those countries of the animal nutrition business from Cargill. This acquisition fits in our growth strategy of participating in the consolidation process in those markets where we have leading positions.
"Due to the expansion of Nutreco and to support further growth, we extended our Executive Board to five members by appointing three Executive-Vice Presidents.
"Animal nutrition and fish feed products are directly linked to the basic needs of consumers for food products such as dairy products, meat and fish.
"Due to the global financial downturn there is a temporary shift in consumer spending to less expensive food categories and a temporary decline in volumes. As a consequence the demand for milk and meat products would decline slightly leading to lower milk and pig prices. Farmers are used to adjusting to such situations by measures including cost savings, which could lead to a temporary reduction in animal feed purchases. However, demand for food will increase again as the global economies recover and population numbers rise.
"In June, Nutreco organised the fifth biennial Agri Vision multi-stakeholder conference. The main question during the conference was 'Will we be able to feed and fuel nine billion people in 2050 in a sustainable way?' The majority of the 375 participants was optimistic since current knowledge and technology can still increase agricultural productivity substantially and targeted research can boost it even further. Nutreco operates at the critical junction between the raw materials and the producers of meat, fish, dairy and eggs.
"Our slogan 'Feeding the future' reflects our ambition to have a leading role in developing advanced feed solutions that contribute to feeding a growing world population," concluded Mr Dekker.
Outlook for second half-year 2009
The following developments are expected for the second half-year of 2009:
For premix and feed specialties, the operational result slightly lower than the second half of last year.
Compound feed Europe: Nutreco expects a return to profitability in the second half of 2009 and a marginal profit over the full year 2009.
Animal Nutrition Canada: operational result expected to be in line with the second half of 2008.
Strong growth was seen in Norway due to 12 per cent harvest volume growth will largely compensate for the decline in Chile as a result of the ISA virus in the Chilean salmon farming market. Nutreco expects a slightly lower result in the second half of 2009 than in 2008.
Meat and other
The Spanish poultry business expects a profit for the second half of the year.
Nutreco has implemented a company-wide programme to control the development of working capital and to achieve operational costs savings.
The company will continue to grow in animal nutrition and fish feed and will in 2009:
- Further strengthen its global market positions in feed specialties and fish feed by organic growth and acquisitions
- Focus on new geographic regions and markets with a perspective of structural profitable growth
- Participate in the compound feed consolidation process in Canada, the Netherlands and Spain where Nutreco has leading local positions, and
- Focus on innovation.
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