Inghams profit up to $114 million as people turn to Chicken
- By: "Farm Tender" News
- Hay & Fodder News
- Aug 22, 2018
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Snapshot:
* Core Poultry volumes of 397.7kt, increased 3.2%
* Gross Profit of $476.9m, increased 4.4%
* EBITDA of $212.0m, increased 8.7%
* Underlying EBITDA of $208.9m, increased 7.1% (Appendix ii)
* NPAT of $114.6m, increased 12.4%
* Net Cash provided by operating activities excluding interest and tax of $260.6m, 122.9% of EBITDA
* Net Debt of $145.4m, leverage ratio of 0.7x
* Final Dividend (fully franked) of 11.6 cps
Inghams Group Limited CEO Mick McMahon said, “The results are very pleasing and reflect both good progress on implementing our strategy and continued strong demand for Ingham’s quality products, supported by consumer preference for great value, healthy and versatile poultry products”.
Poultry volumes (excluding ingredients) grew by 3.2% across the Group while Gross Profit increased 4.4% to $476.9m supported by continued progress on Project Accelerate initiatives covering automation, labour productivity, procurement, network rationalisation and other initiatives.
Underlying EBITDA increased 7.1% to $208.9m for the full year, while EBITDA of $212.0m increased 8.7% (including the net positive effect of profit on sale and restructuring charges), and NPAT increased 12.4% to $114.6m.
Project Accelerate continues on schedule and the benefits are being realised in line with our expectations, while further opportunities have been identified. The rationalization of the Further Processing network in Australia was announced in the half, with implementation progressing as planned.
The performance of the Australian business continued to improve while challenging market conditions were experienced in New Zealand, with the market oversupplied through the second half.
Volumes in the Australian Third Party Feed business have declined as a result of cost pressure on small poultry customers (e.g. the exit of Red Lea from the industry) and our focus on profitability within the segment. New Zealand Third Party Feed volumes have been strong primarily due to of improved trading conditions in the Dairy Feed segment.
Cash flow for the full year was very strong benefiting from continued improvements in working capital management supported by strategic asset sales, consistent with our strategy. Net Cash from Operating Activities (excluding the benefit of working capital funding) was 112.1%.
The capital program remains on track with spending lower than the comparative period and in line with expectations. Major projects underway include the expansion of our breeder farm network in New Zealand and a greenfield feedmill in South Australia which will be in commercial production from Q1 FY19.
“The business continues to make progress against our strategy, demonstrated by improved operational and financial performance” said Mr. McMahon. “It is very pleasing to see the progress we have made reflected in continued volume growth and improving earnings, supporting strong cash generation. This provides options for capital management as well as continued investment in the business”, he said.
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