ForFarmers financial results ‘positive but varied’
Feed volume up across the board, but company faces challenges in the UK
ForFarmers saw “positive but varied” results for the third quarter of 2017, but says it is facing challenges in the United Kingdom.
“Our third quarter results paint a positive but varied picture. We have sold more volume in all clusters. In addition, the product mix improved … which led to a better gross profit. In the United Kingdom, however, we are facing challenges, both in the market as in our own organization,” said Yoram Knoop, CEO of ForFarmers.
The total feed volume increase in the Netherlands and Germany/Belgium. In addition, total feed volume in the United Kingdom increased for the first time this year.
In all clusters, volume growth in compound feed was larger than in total feed. This indicates that the financial situation of farmers in general has improved and that there is more demand for value-added feeds.
Consolidated revenue increased as a result of volume growth and rising raw material prices, which are passed on to customers. Gross profit rose, including a negative currency translation impact of the pound sterling, especially in the clusters the Netherlands and Germany/Belgium. In local currency, gross profit in the United Kingdom was nearly equal in the third quarter, whereas there was a decline in the first half year.
ForFarmers has sold more volume of total feed and compound feed, due to organic growth and especially the acquisition of Vleuten-Steijn. The total feed volume development was in line with the first half year, that of compound feed was higher.
Germany / Belgium
The volume growth in compound feed was higher than in total feed in all sectors. Total feed volume growth was in line with the first half year. This was driven by, among others, the new dealers which were attracted last year and the additional sales advisers. The stronger focus on customer segmentation, and the accompanying sales organization, are starting to bear fruit. The focus on cost control, however, remains important.
Volume increased in total feed and compound feed in the United Kingdom. After the impact of the low milk and pig prices in 2016, it seems that the decrease in feed demand in the dairy and the pig sectors is bottoming out. This has a positive effect on the gross profit. In addition, more volume was sold in the pig sector to XL customers, leading to on average lower margins.