Food technology and ingredients company Kerry has reported higher half year revenues and earnings and said it remains strongly positioned for growth for the full year.
Kerry Group said its revenue for the six month period increased by 1.6% to €4.121 billion on the back of an increase in volume growth, a contribution from acquisitions and higher pricing.
Its EBITDA for the six month period inched 0.1% higher to €518m as the company said its organic growth was offset by the effect of disposals net of acquisitions.
Kerry said its interim dividend of 34.6 cent per share marked an increase of 10.2% over the 2022 interim dividend.
Edmond Scanlon, Kerry's chief executive, said the company delivered a good performance in the first half of the year recognising varying conditions across its markets.
"Strong volume growth was achieved in APMEA and Europe led by our performance in the foodservice channel, while North America saw customers work through elevated inventory levels," Mr Scanlon said.
He said the company continue to see good levels of customer innovation activity, and its margins reached an inflection point in the second quarter.
"We also made good strategic progress, particularly in executing on our emerging markets strategy with significant acquisitions and investments across APMEA and LATAM," he stated.
With Kerry's strong local footprint and track record of growth across emerging markets, these complementary strategic developments will support our future growth ambitions," he said.
"While recognising current market conditions, we remain strongly positioned for growth and reiterate our full year constant currency earnings guidance," he added.
Breaking down its divisions, Kerry said its Taste & Nutrition unit's reported revenue increased by 2.7% to €3.539 billion on the back of volume growth and positive pricing, which was partially offset by adverse translation currency and the effect of disposals net of acquisitions.
It said the Food EUM achieved good volume growth led by Dairy, Snacks and Meat.
This was supported by strong performances in savoury taste, functional systems, and Tastesense salt and sugar reduction technologies.
It noted that business volumes in emerging markets increased by 6% driven by strong growth in the Middle East.
Reported revenue in the Americas region increased slightly by 0.1% to €1.936 billion with positive pricing and favourable translation currency offset by lower volumes and the effect of disposals net of acquisitions.
Kerry said that reported revenue in the Europe region increased by 5.8% to €771m driven by volume growth and positive pricing, partially offset by an adverse effect from foreign currency and disposals net of acquisitions.
It noted that growth within the region was led by strong performances in the UK and Ireland.
And reported revenue in the APMEA region increased by 5.8% to €813m driven by volume growth, positive pricing and a favourable effect from transaction currency, partially offset by adverse translation currency and the effect of disposals net of acquisitions.
Kerry said that within the region, strong growth was achieved in the Middle East and South Asia Pacific, with overall performance in China improving through the first half.
Meanwhile, reported revenue in its Dairy Ireland the division decreased by 3% to €675m, with positive pricing more than offset by lower volumes and adverse translation and transaction currency effects.
Kerry said that volumes in Dairy Ireland were lower in the first half with elevated input costs impacting overall market demand dynamics.
Within Dairy Ingredients, it said that lower volumes mainly reflected softer market supply, while Dairy Consumer Products performed well, with volume growth led by Kerry's branded cheese ranges and private-label spreads.
Kerry supplies ingredients to companies like fast food giant McDonald's.
Kerry's CEO Edmond Scanlon said he expects destocking among its North American customers to continue to ease in the third quarter after a number recently effectively finished their inventory reductions.
Mr Scanlon added that Kerry has seen a good progression in volumes in China over the last two quarters and expected to see another step up in growth over the coming months after a challenging 2022 impacted by Covid-19 lockdowns.
"In China it's been a pretty dynamic environment over the last number of years. I think it'll be probably out into 2024 before we get back to, let's say, a more normalised China scenario. We would continue to be pretty optimistic about the medium term and long term," Scanlon told an analyst call.
Shares in the company moved higher in Dublin trade today.
