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Glanbia eyeing 2012 profits target despite marginal growth

By Mark Astley , 07-Nov-2012

Irish dairy giant Glanbia is “confident” of delivering its full year profits target, despite reporting marginal growth for the first nine months of 2012.

Giving an update for the period between January and September 2012, the Ireland-based dairy processor reported that it expects to deliver 2012 adjusted earnings per share growth of around 10% for the full year, which it claims is at “the upper end of guidance.”

The optimistic outlook came despite reports that total group revenue for the nine month period “grew marginally.”

Glanbia has attributed this to a decline in revenue from its Dairy Ireland segment, which offset double digit growth from its Global Nutritionals business.

Dairy Ireland decline

Glanbia’s US Cheese and Global Nutritionals business reported 9% revenue growth for the first nine months of the year. The Global Nutritionals business alone reported growth of 20% for the period.

“The outlook for US Cheese & Global Nutritionals is positive with good performance in the first nine months expected to continue for the rest of 2012 resulting in revenue, operating profit and margin progression for the full year,” said Glanbia’s Interim Management statement.

Meanwhile, the firm’s Dairy Ireland segment reported a 4% revenue decline for the period. Glanbia has attributed this to lower revenue from its Dairy Ingredients Ireland (DII) segment.

Despite the decline, Glanbia is expecting a “solid performance” from DII for the full year.

Global milk prices declined in the first half of the year as milk supply outpaced demand from emerging markets. Glanbia is, however, anticipating greater price stability for the remainder of the year, claiming that “outlook is broadly positive to year end.”

Full year results

“The Group continues to perform well driven by positive overall trends in Global Nutritionals and results broadly in line with expectations in the business,” said Glanbia managing director, John Moloney.

“We are confident that full year results will be at the upper end of guidance, representing circa 10% growth in adjusted earnings per share on a constant currency basis. 2012 is expected to build on the excellent performance of Glanbia in the last two years and reflects both our successful international growth strategy and strong operational execution across the Group,” said Glanbia managing director, John Moloney.

Moloney added that the firm’s proposed processing joint venture with its majority shareholder Glanbia Co-operative Society in respect to its DII business represents the “best route” for future growth.

“I believe this is the best route to deliver the next phase of growth in both our Irish and international businesses and to create further value for shareholders, including Glanbia Co-operative Society,” Moloney concluded.

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