Global factors push Glanbia sales upwards

Global factors are expected to push food company Glanbia’s sales even higher in the second part of the year.

Glanbia CEO John Moloney said that the outlook for the group had improved and the group said it was now expecting growth of between 8% and 10%.

“The overall outlook for the group for the remainder of the year is positive and we are upgrading our guidance for 2012 to 8% to 10% growth in adjusted earnings per share on a constant currency basis,” he said

For the first half of the year Glanbia returned a profit for the period ending June 30 2012 of more than €85 million on revenue of €1.4 billion.

The results are a landmark in Glanbia’s history as their profits before taxation passed €100m for a half for the first time.

This was the group’s profits coming from the three main subsidiaries, US Cheese, Global Nutritionals and Dairy Ireland.

The majority of Glanbia’s profits came from its US Cheese and Global Nutritionals business, which returned a combined operating profit of €70.2m.

The report described the performance of US cheese business as “reasonable”. The price for cheese in the was down for the first half of the year, but due to drought conditions in the US it is expected that the price will improve for the second half of the year.

The Global Nutritionals business was the outstanding performer in the first half of the year.

Glanbia reported strong growth in both revenue and earnings before interest tax and amortisation.

The Global Nutritionals division ingredient technologies benefited from the increase in whey prices and worked as a natural hedge that the impact of whey prices had on other divisions within the nutritional business.

Global Nutritionals is expected to benefit from the ongoing trend among consumers towards healthier products. The company expects a new patented technology that reduces sugar in cereal bars to drive profits in the near future.

Glanbia’s domestic dairy business did not perform as strongly as the international sector.

The sector posted an operating profit of €27.8m, down more than 13% on the same period last year.

The profits were hit by a challenging dairy market and with global dairy prices declining due to excess production of milk in key markets.

“Overall performance for the full year is expected to be behind 2011, although this will be partially offset by the ongoing efficiency and cost management programmes being implemented in DairyIngredients,” the report said.

The poor performance in dairy had a knock-on effect, resulting in lower sales of feed and fertiliser through the agribusiness section.