15th May 2014 11:53
LONDON (Alliance News) - Genus PLC said Thursday revenue has risen in "double digits" since the beginning of the year as overall demand for its products and services grew at higher rates than in its first-half while pretax profit took a hit from lower results in China.
In an interim management statement for the period from January 1, 2014 to date, the animal genetics company said revenue grew in double digits in constant currency as overall demand for its products and services grew at higher rates than in the first-half of the financial year. Bovine volumes grew in double digits, as did porcine volumes, supported by the Génétiporc acquisition and strong growth in Asia, it said.
Pretax profit however came in slightly lower than the previous year at constant currency as lower results in the Asia region, principally in China, offset gains in Genus PIC and Genus ABS.
The company added that, as expected, the translation of results in actual currency was negatively affected by the significant strength of sterling compared with the prior period.
Genus said market conditions during the period have been favourable for its dairy and beef customers, supported by rising output prices for milk and beef. Within the porcine market, conditions remain challenging, said the firm, with porcine epidemic diarrhoea virus now estimated to have affected over half the North American and Mexican swine herds. In addition, pork prices in China decreased significantly in the period, pushing pig producers in the country into losses.
Looking ahead, the company said it expects its financial results for 2014 to be broadly in line with expectations, consistent with the pattern over the first ten months. The effects of the virus and reduced pork prices in China are also expected to continue throughout the calendar year.
However, Genus said it expects performance improvements gradually to come through in constant currency in the 2015 financial year, as these headwinds reduce and it continues to execute its strategy to increase product differentiation through proprietary indices and genetics.
To support its commitment to the strategy, Genus also announced a new beef deal with ABP Food Group Thursday. Under the terms of the multi-year agreement, Genus and ABP will collaborate to improve beef genetics at the primary producer level. ABP will provide a rich source of supply chain data which will enable Genus to develop a proprietary custom index for beef bulls specifically for ABP.
Participating farmers using Genus's beef genetics will benefit from ABP's extensive expertise in calf procurement and calf rearing, while Genus will receive a royalty from ABP for the genetic value delivered, said the company.
Genus expects to start providing superior beef genetics to ABP suppliers in the second-half of 2014.
Shares in Genus were trading 0.27% higher at 1,098.00 pence per share Thursday afternoon.
By Alice Attwood; [email protected]; @AliceAtAlliance
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