Robust performance forecast for Glanbia
Net debt expected to rise at global food group to absorb near doubling in capex spending
Global dairy and ingredients group Glanbia is forecast to report robust third-quarter performance in its interim management statement tomorrow, underpinned by growth in the performance nutrition business.
While the company’s full-year guidance is for earnings per share growth of 8-10 per cent, Davy stockbrokers is predicting constant currency EPS growth to be towards the upper end of this range.
Net debt at the company is expected to rise from €32 million in 2013 to €408 million to absorb the near doubling in capex spending.
Investments include the new cheese innovation centre in the US, a cereal ingredients plant and capacity expansion in Performance Nutrition. A mid-teen reduction in Ebita is forecast after a 24.4 per cent fall in the seasonally more important first-half.
The stockbroking firm said further pressure is anticipated in the second half as consumer products continues to struggles to pass through higher input costs.
Earlier this month, the company initiated a voluntary redundancy programme for its struggling consumer products division. In a statement, Glanbia said the operating environment for its consumer products division had been impacted by the “challenging” Irish retail environment as well as high input costs due to sustained increases in global dairy market prices.