September 28,  2020

 

Anpario records double digit sales in first half of 2020

 

Feed additive producer Anpario plc saw sales rise 13% to £16.2 million (US$207 million) and a 24% improvement in adjusted EBITDA to £3.4 million (US$4.3 million) in the six months to June 30, 2020.

The company saw strong sales growth, particularly in the Americas, Asia and Europe and among its phytogenics and acid-based eubiotic products. Gross profits rose by 20% supported by Anpario's liquid bottling plant which was commissioned in July 2019 and enables the company to bring previously toll-manufactured products in-house.

"I am delighted with this strong sales and profit performance, the period was extremely challenging as we faced the unprecedented impact of the COVID-19 global pandemic," said Anpario chief executive Richard Edwards. "Looking forward, we will continue the online and direct marketing tactics that produced such a strong first half performance and we remain confident of continuing the profitable development of the group.

"Our strong balance sheet provides us with the resources to expand our global reach and to undertake earnings enhancing and complementary acquisitions which may arise in these uncertain times."

Latin America continued its strong performance with sales growth of 16% compared to the same period last year. Brazil delivered sales growth of 38% driven by strong volumes of Orego-Stim and Salkil. Ecuador achieved a growth of 33% and  Anpario's products are mostly used in the country's aquaculture industry. The company sees further opportunities in aquaculture in this region and expect to capitalise on recent product registration approvals.

Anpario's US growth picked up in the first half, delivering a 13% improvement in sales. The agriculture market has been affected by both COVID-19 and the continuing US-China trade dispute.

Sales of Orego-Stim, Anpario's phytogenics product, delivered a 20% growth. Anpario sees further opportunities supplying the product to the poultry broiler and layer markets.

While swine sector was weak, Anpario has strengthened its sales resource to take advantage of any turnaround in the market. 

Anpario's sales in Asia were ahead by 28% compared to the same period last year. This includes China where sales were flat but gross profit advanced 14%. The country was the first country to enter lockdown in the first quarter of 2020 following the outbreak of COVID-19 and this, combined with Chinese New Year celebrations, meant that sales activity only started in the second quarter.

The swine industry is now showing encouraging signs of recovery as farmers restock following the African swine fever epidemic. The ban on the use of antibiotic growth promoters in animal feed, introduced after the period end, will be positive for Anpario, the company said.

Southeast Asia delivered the strongest performance of all regions with excellent sales and gross profit advances in the Philippines, Malaysia, South Korea and Indonesia. The region benefited from a number of business development initiatives including receiving important product registrations which now allows Anpario's local sales teams to market products directly to buyers.

After last year's strong performance, the Middle East and Africa saw a decline in sales compared to the same period last year. The Middle East has been severely impacted by the COVID-19 pandemic as a result of cancelled religious celebrations and pilgrimages, a fall in tourism and redundancies of foreign workers in the region.

However, Anpario has seen positive growth in the region with its pellet binder, Mastercube, as well as new business gained with its Optomega omega-3 product for dairy cow fertility.

The European region showed strong sales. Most countries in Europe had modest increases although the United Kingdom delivered a very strong performance through greater demand for raw materials and feed hygiene products. Further opportunities are being targeted as Anpario would be able to offer a quick turnaround of supply in contrast to most mainland European suppliers, the company said.

Spain and Italy suffered with sales declines as both countries were badly affected by COVID-19.

Sales through the Anpario Direct online platform, which offers a variety of packaging options and sizes, continue to grow as the company engages with its target customers. Anpario's field sales team will also be encouraging customers to place smaller orders online using new functionality which allows for customer specific pricing - this is an important feature where a large customer has multiple locations requiring smaller deliveries but, on aggregate, the volumes are significant.

Anpario said that it has responded quickly to the COVID-19 pandemic by implementing its contingency plans which include a split production system, remote working and using communication technology to support its global sales team and customers.

"We intend to keep most of these contingency measures in place for the time being and continue to monitor the global situation, as it will inevitably present challenges whilst the pandemic is still affecting trade and life in general," said Edwards.

"We also face the challenges of Brexit and have prepared plans but, until the final details of our future trading relationship with Europe are determined, it is difficult to assess the impact. In the first half of the year, our sales to EU member states, excluding the UK, accounted for 9.5% of total sales and 36% of purchases."

Edwards added: "Anpario's products and processes comply with EU regulations and the group will continue to supply the same, high standard of products to all jurisdictions around the world."

- Anpario