Glanbia reports on dairy demand

Dairy ingredients supplier Glanbia has predicted profits will remain in line with expectations, according to John Moloney, group managing director. “We are driving growth in nutritionals and the depth and strength of the portfolio in these growth sectors positions Glanbia well for the future. We reiterate our full year guidance of 5% to 7% growth in adjusted earnings per share, on a constant currency basis, for 2012.”

International demand for dairy products remained solid in the first three months of the year, supported by demand from developing economies. Prices for most dairy categories have weakened year to date, mainly due to an oversupply of milk resulting from sustained good weather in most milk producing regions. Similarly US cheese prices have also declined in response to strong US milk production. Demand for higher end whey products continues, reflecting very good demand across all sectors of nutritionals, with prices firm in the face of tight short-term supply of these key ingredients.

Meanwhile, revenue for Dairy Ireland declined 4.6% in the first quarter of 2012. Revenue in Dairy Ingredients was down due largely to lower volumes, in part as a result of on-farm quota supply management but particularly when compared with a strong performance in the prior year.

Glanbia and its largest shareholder, Glanbia Co-operative Society Limited, are working with advisers to evaluate how best to address the expansion of dairy output in Ireland post the abolition of EU milk quotas in 2015. This process continues and, as previously stated, a conclusion is expected to be reached by the end of the second quarter.