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Benchmark expects quarterly earnings drop amid shrimp market decline

24th Aug 2023 10:11

(Alliance News) - Benchmark Holdings PLC on Thursday said it expected a significant decline in earnings in the third financial quarter to June 30, amid a decline in demand for shrimps as people attempt to save money.

The West Sussex, England-based aquaculture biotechnology company said it anticipates adjusted earnings before interest, tax, depreciation and amortisation excluding fair value movements from biological assets to be GBP3.6 million, 29% lower than GBP5.1 million a year prior due to lower revenue and adverse foreign exchange.

Further, the company noted an increase in third party production costs for its salmon harvest income, which it said was a quarter specific factor.

Benchmark expects revenue to be 5.5% lower than a year prior at GBP34.3 million compared to GBP36.3 million.

Advanced Nutrition revenue in the third quarter is eyed to be 17% lower, which Benchmark said reflected the global shrimp market. "Conditions in global shrimp markets affecting demand for our nutritional solutions," the firm said, with imports to the US and Europe estimated to be 20% to 30% lower than a year prior.

"A number of factors including inflation in the US and in Europe which have reduced consumption, creating oversupply and driving down farm gate prices for shrimp," Benchmark added.

Looking ahead, while the company expects conditions for salmon to remain favourable and for demand for shrimps to remain low, it said: "We anticipate a seasonal improvement in sales of our Health solutions and continue to have good visibility of our Genetics revenues. There is continued commercial focus in the business, and the group is trading within market expectations for the full year."

Benchmark shares were 12% lower at 35.62 pence each on Thursday morning in London.

By Tom Budszus, Alliance News reporter

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