Shares in global nutrition group Glanbia jumped over 8% today after it reported improving trends in the third quarter of this year despite the challenges it faces from the Covid-19 pandemic.
In an interim management statement for the nine months ending October 3, Glanbia said its like-for-like fully owned revenues rose by 3.1%.
This increase was achieved by price growth of 4.8%, which was offset by a volume decline of 1.7%.
Glanbia said the price growth reflected strong cheese markets in its Glanbia Nutritionals division and volume declines in its Glanbia Performance Nutrition unit, mainly as a result of the challenges experienced in the second quarter.
Looking ahead, Glanbia said it expects its Glanbia Nutritionals and joint ventures to continue to deliver a resilient earnings performance in addition to further sequential improvement in Glanbia Performance Nutrition.
"However, the group remains vigilant of the continuing uncertainties arising from Covid-19.
"Good operating cash flow is expected to continue in the fourth quarter with net debt to adjusted EBITDA ratio anticipated to be below 2 times by year-end," it said
Siobhán Talbot, Glanbia's Group Managing Director, said that through the challenges of the Covid-19 pandemic the Glanbia portfolio has been resilient, particularly the Glanbia Nutritionals segment and the company's joint ventures.
"In the third quarter, trends in Glanbia Performance Nutrition improved significantly with an increase in revenues and margins versus the second quarter as markets gradually reopened and trading patterns improved," Ms Talbot said.
Ms Talbot said the Group has continued to focus on improving its financial position while maintaining investment in growth; with all key strategic projects on track and the acquisition of Foodarom closing in the third quarter.
Footarom is a Canadian Flavours business with $34m in annual revenues. Glanbia paid a price of $60m for the company, which it said will enable the further development of flavour solutions to customers.
"Operating cash flow has been strong and net debt versus the same period in the prior year has reduced by €188m. We expect to continue to build momentum into Q4 and to exit the year well positioned for 2021 growth," she added.
Glanbia has announced today that it intends to launch a share repurchase programme of up to €50m.
It said its board made the decision as a result of the strong cash flows in the business which provides an opportunity to allocate capital to benefit shareholders.
Glanbia shares closed 8.9% higher in Dublin trade today.