Glanbia's H1 revenues grow by 10%

Wednesday 20 August 2014 17.52
Glanbia maintains its guidance for the full year of 2014
Glanbia maintains its guidance for the full year of 2014

Global food group Glanbia has said that group revenue for the six months to the end of June rose by over 10% to almost €1.8 billion.

Earnings per share - a key measure of growth - up 11.5% to around 32.5 cent. Pre-tax profits for the half year rose to €101.5m from €95m the same time last year.

Glanbia said its board was recommending an interim dividend of 4.43 cents per share, an increase of 10% on the interim dividend of 4.03 cents per share last year. 

The company said its global performance nutrition division, which makes food supplements and exercise nutrition, was the key driver of growth and the division's revenue grew by 17%.

But Glanbia said that its Dairy Ireland unit had a tough half with revenue down over 7% due mainly to lower agribusiness sales.

Overall, the company said its outlook for the full year is positive.

It said that while its global performance nutrition unit is expected to be the main driver of growth, Dairy Ireland is expected to deliver an improved performance while its global ingredients division will be largely unchanged.

"On this basis, we are reiterating our guidance for 2014 of 8% to 10% growth in adjusted earnings per share on a constant currency basis," the company said today.

Its shares were 0.9% higher in Dublin trade at the close of business this evening.

Glanbia also announced today a €60m strategic investment in its global ingredients aimed at maximising the value of its whey pool, which will further strengthen its position as leader in value-added dairy ingredients.

How Glanbia's divisions performed in H1

Today's results show that revenues at Glanbia's global performance nutrition unit rose by 21.8% on a constant currency basis to €374.6m, while EBITA grew by 33.6% to €42.9m. Glanbia said that demand trends within the US sports nutrition market remain positive and international revenue growth remains strong, reflecting the "awareness and high regard" of its brands. 

Revenue its its global ingredients division rose by 10.7% to €565.8m while EBITA fell by 4.8% to €53.9m from €56.6m the same time last year. The company said the division delivered a satisfactory performance given the challenging milk procurement conditions in Idaho. Glanbia said that while cheese prices in the US have declined from their first half peaks, they remain at relatively high levels. 

Glanbia said its Dairy Ireland division saw both revenues and earnings fall. Revenues for the six month period fell by 7.7% to €353.8m while EBITA dropped over 13% to €10.5m from €12.1m. The company said its consumer products saw a "satisfactory" performance against a continued challenging market backdrop.  

It noted that while milk input costs have fallen modestly in recent months, average milk costs for the first half of 2014 was well above the same time last year. 

But its agribusiness revenues fell due to a combination of lower prices and volumes. Glanbia said the fall in volume was mainly due to animal feed and reflected very strong demand in the previous year as a result of poor weather conditions for much of the first half of 2013. 

Revenue at Glanbia's joint ventures and associations division rose by over 19% to €503.4m while EBITA grew by 13.3% to €22.2m. It said that volume growth was positive across all key joint ventures with Glanbia Ingredients Ireland and Glanbia Cheese benefiting from a favourable milk supply.

The company said the construction of its new €150m milk processing plant in Co Kilkenny is progressing well and is expected to be up and running early next year. 

"The outlook for the remainder of the year is positive and we expect to achieve our guidance of 8-10% growth in adjusted earnings per share on a constant currency basis for 2014," commented Glanbia's group managing director Siobhan Talbot.