Glanbia shares fall as earnings drop at half year

By Joe Dermody

Glanbia shares closed lower after the food firm, whose operations span Europe and the US, posted a drop in earnings at the half-year stage.

Earnings before interest, taxation, and amortisation (Ebita) fell to €123.7m in the six months to the end of June, down 7.3% from a year earlier, as revenues rose 3.6% to over €1.11bn.

The figures are on a so-called constant currency basis to take account of the large fluctuations between the dollar and the euro.

The shares, which had fallen as much as 4.5% in the session, trimmed their losses to a decline of 1.6%. Nonetheless, they have fallen 13% in the past year, valuing the firm at over €4.28bn.

In recent months, Glanbia unveiled its growth strategy to investors and analysts for the coming years and detailed its plans for a new cheese plant in the US.

It wants to grow annual revenues from the €3.6bn it generated last year to €5bn. Glanbia’s main US-based Nutritionals and Cheese businesses saw volume growth of 3.1% and 8.1% respectively, but price deflation hit revenues in both businesses.

Revenues at its Performance Nutrition division rose 4.9% on a constant currency basis, but its Ebita earnings were down 16.4% on the same basis.

Glanbia said it continues to seek acquisitions and will also completing further consider joint ventures.

Revenues from joint ventures in the first half of the year rose 4.7%, but earnings fell by 25.6%.

“We have very a supportive shareholder base,” said managing director Siobhán Talbot. “They are long holders, notably Glanbia Co-op. We have created significant wealth for our supporters; we have given €700m to Irish farmers in the last year. They are very supportive of our long-term ambitions,” she said. Glanbia said full-year margins will be broadly in line with 2017.

Merrion Capital said that it maintained its price target of €17.25 for Glanbia shares.


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