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Compound feed Europe disappoints Nutreco

Revenue in Q1 2009 for feed company Nutreco was € 1,043.9 million; a decrease of 7.0% from Q1 2008. All businesses report in line with expectations except Compound feed Europe.

Half-year EBITA (earnings before interest, tax and amortisation) will be lower than in 2008 due to an operational loss in Compound feed Europe and one-time benefits of € 20 million in 2008
 
Operational developments
Historically the volumes and operational results in the first two quarters of the year are relatively low compared with the volumes in the second half-year due to seasonal influences.
 
The Nutreco revenue amounted to € 1,043.9 in Q1 2009, a decrease of 7.0% compared with Q1 2008.
 
This was due to a lower demand for feed in line with the market developments and lower sales prices because of the decline of grain and soy prices.
 
Plus for premixes
The Premix and feed specialities business reported a 4.2% increase in revenue compared with Q1 2008.
 
Lower volumes were compensated for by a positive price-effect. The operational performance in the Premix and feed specialities business is in line with last year excluding the one-time benefits that were approximately € 15 million in the first half of 2008.
 
Compound feed difficulties
The revenue of Compound feed Europe was € 78.3 million lower than in Q1 2008 (-24.7%).
 
Lower sales prices accounted for approximately 17%. Compared with Q1 2008, the average grain and soy prices were 20-25% lower.
 
Volumes decreased by 10% due to the lower live stock population, partly related to the economic situation.
 
Demand for compound feed in Europe is expected to decline in 2009 between 5 and 10% on average.
 
Feed for dairy cows will face a volume decline because of low prices for milk and a lower demand for pig feed is expected in Spain.  
 
Compound feed Netherlands
In Q1 2009 the compound feed business in The Netherlands (Hendrix UTD) reported an operating loss due to its view on the prices of raw materials.
 
Measures have been taken to restore profitability and management changes will be made.
 
Nutreco expects Compound feed Europe to return to an operational profit in the second half of 2009. This is expected to lead to a profit for the full year in 2009.
 
Animal nutrition Canada
The revenue in Q1 2009 of Animal Nutrition Canada was € 92.6 million compared with € 94.9 million in Q1 2008 (-2.4%). The operational performance was in line with last year.
 
Aquafeed slightly down
The revenue in Fish feed decreased by 6.6% to € 189.4 million compared with Q1 2008.
 
The volume decline is mainly related to continuing health challenges in the Chilean fish farming market.
 
As a consequence of the ISA virus in Chile the industry had to downscale farming operations which impacted on the volumes. A volume growth is expected in other salmon farming areas such as Norway and Canada.
 
The revenue from the 'Meat and Other' businesses was 2.0% higher, mainly related to higher poultry prices in Spain compared with the first quarter of 2008.
 
Related website: Nutreco

Dick Ziggers

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