ForFarmers sold less compound feed in the first half year of 2020. The financial result however, was better than was expected in light of the Covid-19 pandemic. CEO Yoram Knoop stated these results for large part are based on the efficiency measures the feed company has taken over the past two years.
“Our customers are facing increased pressure to reduce the environmental impact of their business, with this being translated into various measures in the countries where we operate”, said Knoop during the press conference. “Particularly in the Netherlands, where the agricultural sector is a global leader in terms of developing sustainable concepts, the discussion surrounding future government measures to reduce nitrogen emissions, is causing turmoil and uncertainty in the sector.” According to Knoop there is a growing need for data-backed advice. “Which is at the heart of our Total Feed approach.”
The first half of 2020 was dominated by the global outbreak of the coronavirus and the nitrogen debate in the Netherlands. “We are proud that our employees have managed to continue producing and transporting feed without any complications, despite the COVID-19 measures imposed. The closure of the out-of-home sector impacted on our customers’ sales, in particular in the second quarter. This was reflected in our volume development, especially in the United Kingdom and Poland”, said Knoop. The demand for poultry meat for example declined. This resulted in Poland in a reduction of the number of animals held and therefore a reduction in feed sales.
The Covid-pandemic forced ForFarmers to accelerate the implementation of its efficiency plans. “This means our target of €10 million in cost savings has almost been reached already”, stated Knoop. “As a result of this, we achieved a strong increase in underlying EBITDA despite the difficult market conditions, albeit in comparison to a weaker first half in 2019.”
The financial results give the Dutch based feed company confidence for the future. “We are working on next steps to make the organisation more efficient. We will announce the relating plans later this year.” ForFarmers will publish the new strategy for 2020-2025 on September 15th.