How did world dairy markets impact on Glanbia’s 2020 performance?

Glanbia plc has provided Agriland with further clarification on the impact that world dairy markets had on the performance of the business in 2020.

This week, the plc announced heavily reduced profits for 2020 following a challenging year dominated by the impact of Covid-19.

Total operating profit for 2020 was €114.2 million – down sharply on the 2019 equivalent of €176.8 million.

Also Read: Glanbia reveals heavily reduced profits for Covid-hit 2020

A Glanbia spokesperson told AgriLand:

“Glanbia has two main global businesses: Glanbia Performance Nutrition – which is a branded sports and lifestyle nutrition business; and Glanbia Nutritionals – a business to business operation selling ingredient solutions to a whole range of companies in the food sector.

“Part of Glanbia Nutritionals’ business is US Cheese, a large cheese business based in North America.

“In addition, Glanbia has a number of joint ventures in the dairy space.

These are Glanbia Ireland; Glanbia Cheese UK / EU, which is a mozzarella business and finally, Southwest Cheese and MWC in North America. Both of these are large scale cheese and whey plants.

The spokesperson continued:

“Glanbia’s 2020 results confirm that total group revenue increased by 0.6%, at constant currency.

“Glanbia Nutritionals – ingredients and cheese – had a strong year and grew revenues by 10%.

In the case of the joint venture operations, dairy operations and notably Southwest Cheese in the US had a strong year, driven by favourable dairy market dynamics.

Glanbia Performance Nutrition

The spokesperson explained that Glanbia Performance Nutrition was not directly impacted by dairy markets or Global Dairy Trade events, adding:

“Revenues declined by 13.3% in this part of the business, as a result Covid-19 disruption and lockdowns.

“Overall the picture from the most recent results confirms resilient performance, where the group delivered revenue broadly in line with 2019; profits of €143.8 million; an excellent cash performance; and reduced debt at year end.

“Adjusted earnings per share came in at 73.78c – that’s down 14.9% on last year.”

According to the Glanbia representative, adjusted earnings per share is the truest reflection of the overall shape of the year and the one that markets tend to look at most closely.

“If you look at the share price on closing today, you will see it increased 2.2% reflecting market reaction to the 2020 results,” the spokesperson concluded.