Glanbia challenges to continue

Glanbia says it expects the challenging trading conditions facing its Irish operations to continue, but noted that this should be offset by growth in its global business.

The Kilkenny-headquartered international dairy and ingredients group yesterday detailed a strong overall performance for the year to date and said it expects that trend to continue.

Total group revenue (including shares of joint ventures and associated subsidiaries) grew 14%, year-on-year, in the first nine months of this year. Management is expecting to see a 10% rise in full-year adjusted earnings per share for 2013 as a whole.

The group’s outgoing managing director, John Moloney, said: “Momentum continues in our two core global businesses — particularly in global performance nutrition, where revenue growth continues to outperform market growth rates.

“Across the group, we have a range of strategic capital investments, cost initiatives, and rationalisation programmes under way, which are helping to enhance our future growth and expansion prospects.”

The global performance nutrition and global ingredients divisions have led the way this year, showing respective annualised revenue increases of 19% and 14% in the nine months.

Glanbia’s US cheese unit delivered what management called “a satisfactory performance” for the period, with local market conditions remaining “favourable”.

However, management said the full-year outlook for its Dairy Ireland business remains “challenging”, mainly as a result of underperformance within the group’s consumer products business.

In the first nine months, revenue at Dairy Ireland was up by 9%, mainly due to volume growth but also affected by the sale of its Yoplait Ireland franchise.

Performance at the consumer products arm was also described as challenging. Milk input costs rose to historically high levels and “the Irish retail environment continues to be difficult”, Glanbia said.

However, it added that, in consumer products, it is “actively exploring additional revenue opportunities in high-growth export markets”.

Results for the division in 2013 are expected to be “significantly below” those of last year.

Group net debt stood at €466m as of the beginning of this month.