May 9, 2022

 

BioMar's volumes up by 8% in Q1 2022

 

BioMar grew year-on-year in volume sales by 8% in the first quarter of 2022, while its revenue went up by 34%.

 

However, the company's  bottom line is challenged by raw material prices, cost of energy and the decision to suspend trading with Russia.

 

The significant increase in revenue was driven by higher sales volumes, raw material prices and, to some extent, currency rate development. However, BioMar's earning was significantly impacted by the sharp increase in raw material prices and energy costs not yet passed onto customers.

 

Also, following Russia's invasion of Ukraine, BioMar's earnings for Q1 dropped due to a legal dispute in Norway and changed accounting policies for IT investments. EBITDA for Q1 2022 thus came to kr54 million (US$7.6 million), compared with kr133 million (US$19 million) in Q1 2021.

 

BioMar lowered its guidance for 2022. The steep increase in prices on raw materials, freight, and energy is expected to continue. At the same time, BioMar has comprised the risk related to suspended trading with Russia in expected full-year-results.

 

Following the invasion of Ukraine, BioMar left the Russian market both in terms of sales to Russia and sourcing of raw materials.

 

"We took a tough decision following our values when we suspended trading with Russia. Our sale in Russia has for years been a very important part of our business, especially for the BioMar units in Denmark and Norway," said Carlos Diaz, chief executive officer of BioMar Group. "At the same time, we have sourced some of our key raw materials in the area now affected by the conflict. However, our customers must be able to rely on us as a business partner with high ethical

Standards.

 

"The decision will take its toll at BioMar, but we are a part of society, and we need to take responsibility. My only concern - and surprise - is that some of our international competitors have not taken the same position but is rather taking advantage of the situation.

 

"But even knowing this, we would have taken the same decision, since it is the right thing to do. This is not a food crisis for the people in Russia, but a humanitarian crisis for the people in Ukraine."

 

The decision to suspend trade with Russia has impacted sales of finished goods as well as purchase prices for raw materials, as suppliers have to be substituted.

 

At the beginning of the year, BioMar's EBITDA was expected in the kr980 -1,040 million range.

 

Additionally, international sanctions have increased the risk pertaining to receivables and other assets held in Russia. Against this background, BioMar now expects to generate a full[1]year 2022 EBITDA in the kr890- 940 million (US$126-133 million) range.

- BioMar