Glanbia first-quarter revenues climb 17%

Revenue at nutrition and ingredients group Glanbia increased 17 per cent in the three months to April 5th, compared to the same period last year, on the back of volume and pricing growth.

Managing director Siobhán Talbot, at the group’s AGM, said the company had delivered “a good performance” in the first three months of this year, with global performance nutrition doing “particularly well”, a result of strong revenue growth in the US and internationally.

However, Glanbia’s consumer products division in Ireland, which includes brands such as Avonmore, continues to face “significant headwinds”.

Challenging environment

“The Irish retail environment remains challenging despite a modest improvement in consumer sentiment,” Glanbia said. It said heavy price promotions and discounting was hurting margins as cash-strapped consumers seek out value.

“Milk input costs also remain at historic levels and well above the prior year period,” it said.

Glanbia said it was addressing the challenges through a cost rationalisation programme, which is on track to deliver savings this year.

Revenues in global performance nutrition increased 38 per cent for the first three months of the year, compared to a relatively soft first quarter in 2013. Glanbia expects the nutrition division to continue to outpace market growth this year, but the rate of growth will moderate in the coming quarters reflecting more challenging year-on-year comparatives.

Performance in Glanbia’s global ingredients division in the three months to April 5th was behind due to a challenging milk-purchasing environment in Idaho. Overall revenues increased 10 per cent in the ingredients division, driven by a 17 per cent increase in market pricing for cheese and certain whey products.

“Notwithstanding the current challenges in US cheese and ingredient technologies related to milk supply, Global Ingredients is expected to deliver a positive year-on-year performance for the full year.”

Market conditions in its Irish dairy business remained challenging, with first-quarter revenues in line with 2013. Performance is forecast to improve with year-on-year growth expected for the full year.

Global dairy

Revenues for joint ventures business were 27 per cent ahead of the prior year due primarily to higher global dairy market pricing. Construction of the €150 million processing plant in Belview, Co Kilkenny, by Glanbia Ingredients Ireland continues to progress well and is on schedule for commissioning next year. Guiding growth of 8-10 per cent in adjusted earnings per share, Glanbia said the outlook for 2014 is “positive”.

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