The value of stock market-listed Glanbia dropped by €550m as its shares plunged by almost 16% after the Irish international food giant warned its sales outlook for the rest of the year had in part been ensnared by the global trade wars.
The decline to 11.80c was the worst day for the shares this year and, after trading close to €19 in March, the warning over the outlook marks the first major setback for group managing director executive Siobhán Talbot since she took over six years ago.
The firm, whose international sales span the world and include joint ventures in the US, was hit by “disappointing” sales at its Glanbia Performance Nutrition (GPN) division in the first half of the year, outside North America.
Specific issues in each geographical territory were responsible for the slowdown, which included deteriorating economic conditions in some areas “and global trade dynamics in key international markets”.
The GPN sales problems meant it told the market it will likely miss earlier group-wide profits targets for the rest of the year.
However, Ms Talbot told analysts that its five-year growth and acquisition plans, as set out to investors last year, were still on target and characterised the GPN performance as a “setback” for 2019 only. Glanbia Co-op farmers own 31.5% of the Glanbia group.
“Overall, while we have positive momentum across many parts of the group, this has increased our caution for the remainder of the year,” said Ms Talbot.
Its SlimFast and Watson operations — last year it bought SlimFast in the US in a major move for $350m (€310m) and US ingredients firm Watson — were, however, “performing well”, said Glanbia.
Goodbody said Glanbia’s new guidance for the full year was “disappointing”.
It “breaks Glanbia’s strong track record of delivery against its guidance. We are likely to lower our numbers towards the bottom end of the new guidance range,” said the broker.
Davy said: “We expect the equity to remain pressurised until evidence of a sustained rebuild in the GPN profit base emerges.
“We anticipate moving to the lower end of the new guidance range — which implies a c10% downgrade to our full-year forecasts.”
For the first six months, Glanbia said adjusted earnings per share fell 10.8% from a year earlier, to 36.69c, as earnings at the GPN division slid by over 30% in the same period.
Wholly owned group revenues of almost €1.76bn were up 12% in the year, partly reflecting the SlimFast acquisition.
Other divisions, such as Nutritional Solutions — which includes the Watson acquisition; US Cheese; and its joint ventures division — posted increases at the halfway stage.
It said it will pay an interim dividend of 10.68c a share, an increase of 10% from a year earlier.
At over €3.5bn, Glanbia remains one of the most valuable Irish-owned multinationals.
The shares had gained last year after it announced the purchase of SlimFast in the US, which became part of Glanbia’s GPN.