Kerry upgrades EPS guidance despite profit dip

01-Aug-2024 - Last updated on 01-Aug-2024 at 15:02 GMT

Consumer market demand remained subdued according to Kerry despite an increase in volumes. Image: Getty/VLG

The Irish food and ingredients producer said consumer market demand ‘remains relatively subdued’ as it posted an after-tax profit reduction of more than 22% year-on-year for H1 2024.

Kerry Group reported a 5.9% decline in H1 2024 revenue while after-tax profits decreased from €357.9m to €291.5m (a difference of €66.4m or around 22.7%) in H1 2024. The lower revenue was explained with pricing deflation and unfavorable currency effects as well as the effect of disposals net of acquisitions. EBITDA increased 6.6% and EBITDA margin rose to 14.2% from 12.6% last year.

Dairy Ireland’s reported revenue fell to double-digit figures during the period to June 30, ending at -12.2% versus last year’s -3.0%. Volumes improved but pricing decelerated from +0.4% last year to -6.9% in H1 2024. Kerry noted the division had increased its Cheestrings manufacturing capacity and launched a hybrid dairy range.

Smug-Dairy-Kerry-backs-hybrid-dairy-with-oats-and-milk — The Smug hybrid dairy range combines dairy and oatmilk into a range of products formulated for flexitarians. Image: Kerry Dairy Consumer Goods via FoodNavigator Europe

Taste and Nutrition’s reported revenue, which was +2.7% last year, dipped to -3.4% in H1 2024. Volumes across the division were up 3.1% but price was down 3.0% (versus +5.4% last year). Volume growth of 3.1% ‘remained relatively muted’ according to the company, while growth was led by Kerry’s range of taste and proactive heath technologies. The Group completed the acquisition of Novonesys during the period.

Regionally, Asia-Pacific and the Middle East and Africa delivered the strongest volume growth led by snacks, meat and beverage, with particularly strong growth in foodservice and retail. In Europe meanwhile, volumes declined to -1.0% as soft market dynamics in retail offset growth in foodservice.

In the Americas, Kerry grew its volumes 3.4% with growth in retail and foodservice as snacks, meals, bakery and beverage ‘performed well’. Kerry does not provide a break-down of each category’s regional performance.

Chief executive Edmond Scanlon confirmed an updated full-year EPS guidance of 7-10% (previously 5.5-8.5%).