16 May 2007 - Glanbia Chairman, Michael Walsh, reported to the Annual General Meeting in Kilkenny today that the Group is having a good first half and is expected to deliver a strong performance, compared to a difficult first half in 2006. Mr. Walsh also said that he is pleased to report that the Board and management are confident of achieving double digit growth in the first half and delivering full year results in line with market expectations.
Mr. Walsh went on to say that Irish operations are performing well. Consumer Foods is in line with expectations, although the retail sector remains highly competitive. The closure of the cannery operation and better markets underpin an improving performance from the pigmeat business. Agribusiness is having a reasonable first half, but, as expected, continues to evolve reflecting the ongoing changes in farming. The property business continues to execute well, delivering a steady pace of transactions. In Food Ingredients Ireland, global dairy markets are firm and the recent uplift in demand and pricing is providing a welcome benefit to milk suppliers. However, Irish milk processing margins remain tight and international dairy markets, while strong, will have increased potential for future volatility.
International operations are having a strong first half, with good performance forecast from Food Ingredients USA and Nutritionals. Seltzer Inc., the US Nutritionals company acquired in October 2006, is performing in line with expectations and is expected to make a good contribution in the first half. Conversely, there are some challenges arising from strong international dairy commodity markets in respect of International Joint Ventures. Overall these businesses are operationally excellent and to plan in production and product development. However Glanbia has not yet been able to fully recover or counteract the dramatic price increases in milk-related raw materials.
John Moloney, Group Managing Director, commented today 'Glanbia is having a strong first half. Irish operations are performing well, International businesses are strong and we are particularly pleased with the progress of Seltzer, the 2006 Nutritionals acquisition. Despite the need to resolve the short-term raw material cost issues in International Joint Ventures, we are confident of the long-term sustainable growth of these strategic investments. The Group's portfolio of businesses, and our continuing strong focus on cost efficiency, productivity and operational excellence throughout the business, positions us well to deliver good double digit growth in 2007 and beyond.'