Glanbia shares surge 7% as food giant increases prices to offset soaring costs    

Glanbia posted revenues of €2.8bn for the first half of the year, up from €2bn in the same period last year

Siobhán Talbot, group managing director at Glanbia: The 'half year 2022 results have exceeded our plans'.

Shares in Glanbia climbed 7% as investors hailed a better-than-expected half-year outturn as the Irish-owned international food firm boosted earnings, saying cost controls and further price increases will help it weather the global inflation crisis.

Two of the company's major divisions, Glanbia Performance Nutrition, or GPN, and Nutritional Solutions, or NS, posted increases in volume sales in the first six months of the year, but secured hefty increases in terms of pricing of about 14% and 18%, respectively. 

Glanbia, which is led by managing director Siobhán Talbot, said the results "were very solid in the context of unprecedented inflationary trends" after the company acted "to mitigate cost inflation including price increases and other efficiency measures".

"Consumer response to date to higher pricing has been better than expected in key areas, with volume growth in both GPN and GN for the half year," the company said, adding it was "confident that further pricing action and operational efficiencies will deliver improving margins and strong year-on-year" growth in earnings.

At the half-year stage, Glanbia posted revenues of €2.8bn, up from €2bn in the same period last year. After-tax profit from continuing operations fell slightly to €121.5m. 

It said it had returned over €127m to shareholders in the first half of the year via share buybacks. The interim dividend was increased 10% to 12.93c per share.     

Glanbia had sold off in April its remaining stake in the Glanbia Ireland business, which includes some of Ireland's best known consumer brands, including Avonmore milk, Premier milk, and Kilmeaden cheese, to Glanbia Co-operative Society for €307m.  

"I am pleased to report that half year 2022 results have exceeded our plans, demonstrating the impact of a series of actions implemented since the latter part of last year in response to unprecedented inflation," Ms Talbot said. 

Both Davy and Goodbody raised their full-year outlook. The shares closed about 7% higher to bring them back to levels recorded in May, valuing Glanbia at €3.4bn. 

The shares are now slightly higher than the start of this year, but have, however, slid 12.5% from this time last year.