While Ingham’s reported solid financial results in 1H FY2, CEO Andrew Reeves warns the second half will be significantly impacted by Omicron.
Snapshot
- cashflow was $186.6 million, up 4.7% pcp;
- revenue growth up 1.9%;
- poultry sales volume up 5.6%;
- Statutory EBIDTA $220.4m, up 2.2%;
Reeves said the results were broadly inline or ahead of 1H FY21 despite the challenging operating environment.
“This has been characterised by extended lockdowns and significant operational disruptions caused by ongoing pandemic conditions, with the most recent Omicron-related disruption to be reflected in 2H outcomes,” Reeves said.
While Omicron had minimal impact on the 1H results, it did affect the company more severely than previous variants due to extensive staff shortages across the business.
The staffing shortages meant they couldn’t process the volumes and formats required, increased unit costs and meant the suspension some products and loss of sales to supermarkets and quick service restaurants like KFC. http://www.foodanddrinkbusiness.com.au/news/ingham-s-impacted-by-covid-shortages
It is not known how long Omicron’s impact will be felt by the business, with Reeves saying the underlying unaudited EBITDA and NPAT for he first seven weeks of 2H FY22 were roughly $35 million and $24 million lower than pcp.
Excess supply that is now across the market is being directed to wholesale, Reeves said, resulting in significant oversupply in the channel and pricing being impacted.
Pandemic-related changes to operational practices will continue to ensure workplace safety, and adjustments made to farms to bring them back into balance.
“The timing will depend on operating and demand conditions, while inventory levels are expected to be returned to desired levels and mix over the coming months,” Reeves said.
