Chicken processor Inghams Group released a trading update for H1 FY24, saying strong operational performance has underpinned a positive start to the FY, with an expected statutory earnings before interest, taxes, depreciation, and amortisation (EBITDA) of $247 million.
Inghams said there had been continued improvement in operational performance across farming and processing; strong demand for poultry, with more shelf space been allocated, wholesale pricing improvements, and an accelerated recovery in New Zealand.
Its guidance for 1H24 is:
- Statutory EBITDA: Post AASB16, approximately $247m;
- Statutory net profit after tax (NPAT): Post AASB16, approximately $65m;
- underlying EBITDA: Pre AASB16, approximately $138m; and
- underlying NPAT: Pre AASB16, approximately $71m.
Inghams FY23 results showed the company recovering from significant operational disruptions in FY22, with the company saying operations were progressively returning to normal during 2H.
It recorded an EBITDA of $418.5 million, up 13 per cent on the prior corresponding period (PCP). Its NPAT was $60.4 million, a 72.1 per cent on pcp.
Cost pressures continued to be experienced across the business, with wheat and soymeal prices elevated due to global supply and geopolitical uncertainties, the price of feed ingredients had stabilised.
In FY23, it made new investments in automated processing technology, a new wastewater treatment plant at Osbourne Park (Western Australia), and progressively rolled out three state-of-the-art distribution facilities. It also developed a new breeder triangle in northern New South Wales.
Inghams said the 1H24 outlook remains dependent on several factors, including the continuation of the current level of wholesale pricing until the end of 1H24 and maintaining the current level of operational improvement.
The company said it expects the 2H24 result is expected to be lower than 1H24 due to normal seasonality, and continued inflationary headwinds across labour, feed and other costs including fuel, electricity, and CO2.
