October 21, 2011


Nutreco's full-year forecasts remain unchanged



After successfully passing on higher costs in the third quarter, Dutch food group Nutreco is not changing its full-year outlook and is on the lookout for acquisitions.


According to Reuters, Nutreco said 11.7% of its 14.6% rise in third-quarter sales was due to higher selling prices as it passed on rising costs to farmers for crops such as grain, corn and soy. It said it was also benefiting from strong sales at its fish feed business.


"In the second half year, we expect excellent results in fish feed and the total of our other activities to be in line with last year or slightly higher," Nutreco said on Thursday (Oct 20).


Nutreco, which competes with Norvite Animal Nutrition Company, Cargill, Altech and DSM, missed out on buying rival Provimi in August, is now on the lookout for smaller bolt-on deals.


The company said it had a strong balance sheet and aimed to expand its fish feed business into new regions and make acquisitions for its feed additives activities.


It will provide a strategy update on November 16.


KBC Securities analysts said Nutreco was well positioned to pursue external growth, both in fish feed and markets in China, Russia and Brazil.


The company reiterated that it expected full-year earnings before interest, tax and amortisation (EBITA) to be around EUR230 million (US$316.8 million), up about 3% from 2010.


"Nutreco's third-quarter sales were somewhat below our forecast, but, more importantly, the company maintained its full-year guidance," SNS Securities analysts said.


Nutreco shares were down 0.7% at EUR48.22 (US$66.42), in line with a 0.7% decline in the Amsterdam midcap index.


It reported a 14.6% rise in third-quarter sales to EUR1.535 billion (US$2.11 billion), bringing its nine-month tally to EUR4.108 billion (US$5.66 billion).


Analysts in a poll commissioned by Reuters had forecast on average third-quarter sales of EUR1.53 billion (US$2.1 billion).

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