Key Takeaways:
- ForFarmers NV sees a recovery in underlying EBITDA in Q3 2023, with a 33.6% increase.
- Sales volumes declined to the previous year but remained stable compared to Q2 2023.
- The company’s new market-specific approach yields positive results, leading to a stronger market position.
- ForFarmers completed the sale of its compound feed activities in Belgium and is looking to close the acquisition of Piast in Poland.
- The company is focused on delivering competitively priced feed and enhancing the sustainability of food production.
ForFarmers, an international feed company, has reported a recovery in its underlying EBITDA for the third quarter of 2023, with a notable increase of 33.6%. Despite declining sales volumes compared to the same quarter last year, the company has maintained stability in volumes relative to the second quarter of this year.
Strategic Developments
The company’s new operational strategy, which emphasizes local market engagement with diverse products and specialized advice, shows promising outcomes. This approach has underpinned ForFarmers’ confidence in a more favorable result for the latter half of the year, as indicated in their first half-year press release.
Sustainability and Market Position
ForFarmers has proactively strengthened its market position by offering competitive feed prices, which has increasingly attracted new customers. In line with its mission, ‘For the Future of Farming,’ the company is actively working with farmers to make food production more sustainable, a crucial step given the growing importance of food affordability.
Market and Sector Developments
The third quarter saw higher average prices for meat and eggs in Europe than the previous year, affecting exports due to higher prices than in the United States, Brazil, and Canada. Dairy farmers in Europe faced a drop in milk prices since the beginning of the year, impacting feed sales in the ruminant sector. The pig sector saw a historical low in animal numbers due to policy decisions, yet feed volumes remained relatively stable. The poultry sector experienced a slight decrease in feed sales, attributed to transitions to better welfare concepts and the cessation of feed production in Belgium for this sector.
Financial Highlights
Net revenues decreased due to lower raw material prices and sales volumes. However, gross profit increased by 4.3% due to a better product mix and a specific local approach. Energy costs were lower than the previous year, which saw a spike due to the war in Ukraine. Personnel costs rose due to collective labor agreement increases at the beginning of 2023.
Leadership Update
The Supervisory Board has appointed Hans Kerkhoven as interim CFO, who will serve until the general shareholders meeting appoints a new statutory CFO.
ForFarmers Latest News
Receives Approval to Sell Belgian Compound Feed Activities to Arvesta (2023/09/29)
ForFarmers NV has received approval to sell its compound feed activities to Arvesta, excluding some sale activities. The €25 million cash transaction will close in October, benefitting both companies and positively impacting Belgium’s agriculture sector.
Arvesta Acquires ForFarmers Belgium (2023/04/05)
Arvesta, a specialist in agriculture and horticulture, is set to acquire ForFarmers Belgium, including the manufacturing facility and about 80 employees. The two companies will collaborate more closely in the broiler industry, with ForFarmers NV continuing to manufacture feed in the Netherlands. Arvesta will pay ForFarmers €25 million in cash for the deal, which is expected to close in the second half of 2023. The acquisition strengthens Arvesta’s position in the Belgian market, while ForFarmers will receive financial gains.
Photo by Ivan Bandura on Unsplash
