ForFarmers Q3 2022 Trading Update

1 November 2022 - 07:04

Highlights for third quarter of 20221:

  • Total Feed volume2: down by 7.2%; decline mainly in the swine and layer sectors
    of which compound feed: down by 9.1% 
  • Gross profit: up by 8.3% 
  • Underlying EBITDA: down by 17.3%; higher expenses could not be passed on fully in the supply chain

1 Results and developments of the third quarter 2022 are compared to the third quarter 2021, unless otherwise stated
2 Total Feed comprises the entire product portfolio of ForFarmers and consists of compound feed, specialties, co-products (such as residual flows from the food industry, referred to by ForFarmers as DML products), seeds and other products (such as forage).

ForFarmers CFO Roeland Tjebbes said: 
"Volatile markets due to the war in Ukraine and the exceptionally long and hot summer determined results in the third quarter. We could not fully pass on the higher energy costs nor the inbound freight costs due to the low water levels in the rivers. Particularly pig farmers and layer farmers were affected by the (financial) consequences of outbreaks of animal diseases. We consequently saw our volumes in these sectors drop. In Poland, however, we again sold more feed to broiler farmers and our volumes were also up in the ruminant sector in the Netherlands and the United Kingdom. Raw material prices were somewhat lower than in the second quarter. This was a positive development for all farmers, but not yet sufficient for pig farmers. In general, they continued to produce at a loss. The increase of gross profit was not enough to cover the higher operating expenses, which included energy costs which were roughly twice as high as a year before. This consequently resulted in our consolidated underlying EBITDA being a few million lower than a year earlier. On a quarterly basis this translates into a relatively high percentage. Excluding the higher energy costs, underlying EBITDA in the third quarter of 2022 would have been roughly the same as in the third quarter of 2021. 
Our markets are and will likely continue to be volatile. In such challenging markets we are well aware that we can rely on loyal customers and dedicated employees. They make the difference, and we are grateful for that. We remain committed to our customers and other stakeholders and will provide more insight into how we intend to continue to do so in the coming years on 17 November. Moreover, we hope to soon be able to provide more clarity on the planned joint venture with 2Agriculture in the United Kingdom, with which we will further strengthen our position in the poultry sector.”