Kerry sees lower FY earnings growth as prices start to fall
Dairy volumes tumbled 12.1% from July to September
27 October 2023
1 minute read
By: Food ingredients giant Kerry expects full year earnings growth to be at low end of its previously stated range following a sharp third quarter decline in volumes and pricing in its small dairy business, Reuters reported, citing the company on Thursday.
The Irish group, which supplies ingredients to the likes of McDonald's, also said pricing in its much larger taste and nutrition unit began to fall, with a third quarter decline of 1.4% reflecting some input cost deflation.
It said taste and nutrition, which made up 94% of Kerry's 1.2 billion euros ($1.3 billion) in earnings last year, was strongly positioned for volume and margin growth after volumes rose 1.6% in the quarter and margins jumped 130 basis points.
However, dairy volumes tumbled 12.1% from July to September to stand 6.2% lower year-to-date, with a 17.6% quarterly fall in pricing relating to "increased deflationary market dynamics".
As a result Kerry, which also announced a 300 million euro share buyback programme on Thursday, said it expected full year earnings growth to be at the low end of its previously stated 1% to 5% constant currency range.
($1 = 0.9488 euros)
