Glanbia expects return to earnings growth

Food group Glanbia in an interim statement issued today said trading conditions improved somewhat in the later stages of 2009 and a return to earnings growth was expected this year.

Admitting however that markets remain “volatile” and consumer sentiment is “fragile”, the company said that based on current economic and dairy market forecasts a return to earnings growth in the order of 6% to 8% was expected.

It is expected to report adjusted earnings per share of 30 to 31 cents for 2009, in line with revised adjusted earnings per share guidance for the full year which was announced on 30 April 2009.

The company expects to announce 2009 full year results in early March 2010 for the year ended 2 January, 2010.

It said the impact of the downturn in global dairy markets in the first half of the year, lower US cheese prices and a poor economic backdrop with weak consumer demand resulted in a difficult year in 2009.

Results from its global dairy and US cheese markets were expected to lift overall performance, but the result from Dairy Ireland is forecast to be considerably lower than 2008 as the decline in global markets created a “very difficult” year for the Irish Dairy Ingredients business.

“Prices and returns for dairy processors and suppliers were below the cost of production, which gave rise to a major first time loss in Irish Dairy Ingredients for the full year,” the statement said.

The company’s Consumer Products division is expected to report a reasonable result for 2009 underpinned by a significant internal cost reduction programme in response to a very competitive Irish food retail market.