Performance Nutrition Unit Boosts Profits at Glanbia

17 Aug 2016 --- A surge in profits at its Performance Nutrition unit helped offset the continued difficulty of the milk market at Glanbia. Profits across Glanbia's Performance Nutrition unit, which makes protein supplements for athletes, were up 35 percent to €81.7m ($92m) in the six months ending July 2, the standout performer across the business.

Overall, revenues at the Irish company were stagnant at €1.4bn ($1.6bn) while profits rose 14 percent on the year to €157.4 million ($172m).

However, profits were down 4 percent at its Nutritionals unit to €58m ($65m) while nudging up 1.1 percent at Dairy Ireland to €17.7m ($19m).

Across its Nutritionals unit, Glanbia said its performance was in line with expectations amid a challenging dairy market. 

Revenues were down by 5.9 percent to €572.6 million ($644m), hurt by reduced pricing of over eight percent.

US Cheese volumes were broadly in line in the first half of 2016 as plants operated close to full capacity.

Cheese demand remains solid across the US retail and foodservice markets although pricing in the overall US market was weak. 

Glanbia said that it has reported a "satisfactory performance" in Dairy Ireland, though revenues were down 3.3 percent to €357m ($402m).

Increased animal feed sales volume was more than offset by lower pricing across animal feed and fertiliser which led to a decline in margin across its Agribusiness within Dairy Ireland.

Looking ahead, Glanbia has restated its guidance for 2016 of growth between eight and 10 percent in earnings per share, driven by its Performance Nutrition unit.

Siobhán Talbot, managing director, said: “Glanbia delivered a strong performance in the first six months of 2016 driven by Glanbia Performance Nutrition.”

“Total Group earnings before interest, tax and amortisation for the half year grew by over 11 percent.  Sales of performance nutrition brands and value-added nutritional ingredients showed good growth in the first half of 2016 delivering on our vision to be a leading nutrition business.”

“Global dairy markets remain weak and continue to be a challenge for parts of the business, however the diversity of the Glanbia portfolio has enabled us to navigate this and we reiterate guidance for the full year of adjusted earnings per share growth of 8% to 10% on a constant currency basis.”