Genus profits rise despite depressed US market

Animal genetics company Genus has survived some tough trading conditions in the US market to record an increased operating profit in the six months to December 31, despite a drop in overall sales.

The company's revenue nearly reached GBP135 million (US$204.64 million), compared with GBP140 million (US$212.15 million) in the same period of 2008, with US sales dropping 18% to GBP43 million (US$65.16 million).

The weaker result was mainly due to porcine customers in the US deferring the updating of genetics in their herds resulting from the recession, said Genus.

In the bovine sector, where the market reversal was particularly sudden and deep, most customers traded down and that reduced average selling prices. Semen sales volume fell by 4%.

Despite the challenges in the US, which accounts for about a third of Genus's global business, operating profit rose 7% to GBP34.3 million (US$52 million), before R&D costs are included. Chief executive Richard Wood said this reflected a strong performance in the European market where sales were up 3% to nearly GBP62 million (US$94 million) and profits were up 19% to GBP11.8 million (US$17.9 million).

The UK farm sector, which has performed reasonably well, has also helped the company's genetics business, said Wood.