NETHERLANDS - Dutch based animal nutrition, feed and meat company saw its revenue in the third quarter of the year fall by 4.1 per cent to €1,428.9 million.
Animal Nutrition revenues increased by 2.3 per cent to €454.9 million.
Organic volume effect was up by 3.2 per cent due to higher sales in mature markets, growth geographies and young animal feed.
Fish Feed revenues of €639.4 million are 8.2 per cent lower than last year driven by a 5.8 per cent decrease in organic volumes mainly due to significantly lower salmon feed sales to Marine Harvest in Norway.
The sales volume growth of fish feed for other species was 5.4 per cent.
Compound Feed and Meat Iberia revenues fell by 4.4 per cent to €334.6 million. Organic volume growth was 3.3 per cent.
Good progress has been made in increasing sales to customers across various channels.
The company has terminated its €100 million share buy-back programme.
Knut Nesse, CEO Nutreco said: "The performance in the third quarter is in line with our expectations and reflects organic volume growth in animal nutrition, higher non-salmonid fish feed volumes and volume growth in Iberia. I am very pleased with the appointment of Samson Li as new Managing Director for our Asia business unit. I am confident that he will lead the acceleration of our growth in Asia.
“Our Animal Nutrition segment had positive volume growth and improved margins supported by globally branded nutritional solutions. These developments were driven by good performances in both growth geographies and mature markets, as well as certain product categories such as young animal feed.
“Our Fish Feed segment had negative volume growth mostly due to lower sales in Norway as a result of lower volumes to Marine Harvest, as anticipated. Our non-salmonid feed volumes grew strongly with a solid contribution from Ecuador. We have a global brand and produce feed in 16 countries for over 60 species.
“Our Norwegian business represents approximately 10 per cent of total Nutreco operating profit. Norway will always be important from an innovation perspective with the firm intention to be the market leader in salmonid feed. More than 70 per cent of Fish Feed production takes place outside of Norway and we expect this volume to grow further.
“The volume share in revenues of fish feed for non-salmonid species is now 41 per cent compared with 37 per cent in the same quarter last year. The potential of feed for shrimp, tilapia and other non-salmonid species will continue as fish farming practices improve. This will encourage further demand for higher quality fish feed which we offer due to our leveraging of the innovations already developed for salmon feed.
“The Compound Feed & Meat Iberia segment is making good progress in replacing Mercadona poultry volumes with alternative customers. We have successfully replaced approximately 75 per cent of these volumes. In the third quarter year on year we have also seen overall volumes improving, reversing the trend experienced in the first half of the year.
“Based on the business developments in the third quarter I am confident we will achieve a full year EBITA before exceptional items of at least equal to last year, as we indicated at our half year results".
Revenue for the Animal Nutrition segment in the third quarter amounted to € 454.9 million, an increase of 2.3 per cent compared to last year (Q3 2013: € 444.6 million).
The volume effect was 3.2 per cent, driven by positive performances in Canada, Brazil, Europe and young animal feed. The price effect was 0.9 per cent.
The acquisition effect was down by 0.1 per cent due to a small divestment in Canada. The foreign exchange rate effect was a drop of 1.7 per cent. The operating result was higher than the same quarter last year.
The revenue in Fish Feed decreased by 8.2 per cent to € 639.4 million compared to last year (Q3 2013: € 696.1 million). The volume effect was a drop of 5.8 per cent, mostly due to a 10.1 per cent lower demand for salmonid feed. The lower demand was mainly in Norway due to lower volumes to Marine Harvest as anticipated and also compared to the previous strong quarter a year ago. This was partially offset by 5.4 per cent growth in non-salmonid feed, with growth in Ecuador, Japan, southern Europe, and Vietnam. The price effect was 1.2 per cent. The foreign exchange rate effect was -3.6 per cent.
The volume share in revenues of fish feed for non-salmonid species is now 41 per cent compared with 37 per cent in the same quarter last year. The operating result in the third quarter of the year was slightly lower than the same quarter of 2013. This was mostly due to lower sales in Norway and China, offset by good performance in almost all other geographies.
Compound Feed & Meat Iberia
Revenue for the Compound Feed & Meat Iberia segment in the third quarter amounted to €334.6 million, a decrease of 4.4 per cent compared to last year (Q3 2013: €349.8 million).
The volume effect was 3.3 per cent, with good progress made in increasing sales to customers across various channels. This compensated substantially for lower volumes to Mercadona due to disengagement process. The year-to-date volumes in tonnes to Mercadona were 28 per cent lower than the last comparable 9 month period before the start of the disengagement process.
The company has successfully replaced approximately 75 per cent of these volumes.
The price effect was a drop of 7.7 per cent caused by lower raw material prices. The operating result was slightly lower than the same quarter last year due to overall market pricing circumstances.
Outlook full year 2014
Based on current trading conditions and barring any unforeseen circumstances we expect EBITA before exceptional items for continuing operations for the full year 2014 to be at least equal to last year (2013: € 256.3 million), which is a confirmation of our half year outlook. Due to seasonality of the business, the majority of Nutreco's result is generated in the second half of the year.
TheFishSite News Desk