Glanbia's half yearly revenues grow by 13%

Wednesday 21 August 2013 15.21
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An artist's impression of Glanbia's new €150m dairy processing facility on the Kilkenny/Waterford border
An artist's impression of Glanbia's new €150m dairy processing facility on the Kilkenny/Waterford border
Glanbia's group managing director,
John Moloney - set to retire at the end of the year - will be replaced by Siobhán Talbot
Glanbia's group managing director, John Moloney - set to retire at the end of the year - will be replaced by Siobhán Talbot

Global food group Glanbia has seen its revenue for the first half of the year rise by 13% to almost €1.68 billion.

Pre-tax profits for the six months to the end of June rose to €95m from €88m the same time last year.

Glanbia's Dairy Ireland division saw revenue rise but earnings fall, which the company blamed on lower volumes and higher milk input costs.

The company said that the full year outlook for the group remains positive, despite some challenges for the rest of the year.

It has forecast growth in adjusted earnings per share of between 8-10% on a constant currency basis, which Glanbia said reflects its expectation of positive performances in Global Performance Nutrition and Global Ingredients

This will be partially offset by a year on year decline in Dairy Ireland, however.

The company's board is recommending an interim dividend of 4.03 cents per share, up 10% on the 3.66 cents per share the same time last year.

Glanbia's group managing director John Moloney said that the group's first half performance was driven by global performance nutrition and global ingredients, with the two units representing over 70% of the groups' total earnings.

Dairy Ireland's performance was impacted by a ''very difficult'' first half in consumer products, he said.

But he added that ''overall, Glanbia is in a strong position to capitalise on its unique portfolio of global businesses, development opportunities and strong balance sheet''.

Mr Moloney is due to step down at the end of the year and he will be replaced by the company's group finance director Siobhán Talbot.

Glanbia reorganised the structure of the company earlier this year, and the new structure reflects the fact that the company has built two significant platforms in nutritional products and solutions.

The first platform, global performance nutrition, focuses on high quality performance nutrition with the largest global nutrition brand portfolio. The second platform, global ingredients, spans large scale cheese manufacturing and value-added nutritional ingredient solutions.

The group's other business segments are Dairy Ireland, comprising agribusiness and consumer products, and Joint Ventures and Associates, which includes the group's strategic cheese and dairy ingredients joint ventures.

Glanbia shares were lower in Dublin trade this afternoon after publication of the results.

Breakdown of Glanbia's business divisions

Breaking down the business divisions, Glanbia said that revenues at its global performance nutrition unit rose by 13.7% to €324.4m while EBITA increased almost 20% to €34m with strong consumer demand in the US continuing to grow. The outlook for the division remains positive, Glanbia said.

Revenues at its global ingredients division rose by 16.8% to €539.2m while earnings increased by 7.7% to €57.5m on the back of higher pricing and an enhanced product mix. It said the full year outlook is positive with year on year revenue and EBITA growth expected to be in line with the trends seen in the first half of the year.

Sales at Glanbia's Dairy Ireland division rose by 9.2% to €383.2m in the six month period, but earnings fell by 24.4% to €12.1m. due to lower volumes and higher milk input costs.

''The outlook for the Dairy Ireland segment for the remainder of the year remains challenging as a result of the operating environment for consumer products and full year EBITA and EBITA margin are expected to be well behind 2012,'' the company cautioned.

Glanbia said that revenue at its Joint Venture and Associates division rose by 11.5% to €431.1m while earnings grew by 9.1% to €20.3m. It said that Glanbia Ingredients Ireland, Southwest Cheese and Glanbia Cheese all saw revenue growth due to higher global dairy market prices as poor weather conditions in some key markets resulted in reduce supply and higher prices

The company said that construction of Glanbia Ingredient's Ireland new €150m dairy processing facility on the Kilkenny/Waterford border is progressing well.