Goodvalley improved earnings in Q3 and expects to reach high end of guidance

Goodvalley continued to increase production and grow sales of live pigs in Q3 2019 to accommodate increasing demand across the Group’s markets. Higher prices for live pigs boosted earnings from the Group’s pig production. At the same time, though, the crop yield came in at a record-low level and the higher pig prices had a temporary negative impact on profitability on value added pork products. The Group’s operational performance improved slightly in the quarter driven by continued efforts to improve production planning and processes.

“Our pig production generated strong results in the quarter as we lev¬eraged our recent investments in production capacity, enabling us to sell more live pigs at a higher average price while simultaneously improving operational efficiency slightly. Even though we realised a record-low crop yield from our land in Ukraine in particular and saw the pig price effect partly offset by relatively fixed pork product sales prices, we now expect to reach the high end of our revenue and earnings outlook for the full-year” says CEO Hans Henrik Pedersen

 

Q3 2019

  • Group revenue grew to DKK 414 million (Q3 2018: DKK 377 million) driven by an increase in sales of live pigs at a higher average price, which boosted Adjusted EBITDA* to DKK 71 million (Q3 2018: DKK 35 million) corresponding to an Adjusted EBITDA margin of 17.2 % (Q3 2018: 9.2%).
  • The Polish segment grew revenue to DKK 228 million (Q3 2018: DKK 221 million) and lifted Adjusted EBITDA to DKK 34 million (Q3 2018: DKK 4 million) due to higher live pig sales volume and price. The positive development was partly offset by relatively fixed domestic pork product prices despite fewer pigs slaughtered in the quarter.
  • Revenue in the Ukrainian business increased to DKK 138 million (Q3 2018: DKK 108 million) driven by higher pig prices, whereas Adjusted EBITDA declined to DKK 15 million (Q3 2018: DKK 17 million) as the crop yield came in at a record-low level below the low yield realised in the comparison period.
  • In Russia, revenue was stable at DKK 48 million (Q3 2018: DKK 48 million), while Adjusted EBITDA declined to DKK 18 million (Q3 2018: DKK 22 million) due to lower pig prices

 

 

Outlook

Based on the positive development in Q3 2019, Goodvalley ex­pects to reach the high end of the previously communicated outlook for 2019 in terms of revenue and Adjusted EBITDA. The Group now expects to generate revenue of DKK 1,450 - 1,550 against the previous expectation of DKK 1,400-1,550 million and an Adjusted EBITDA of DKK 250-280 million against the former expectation of DKK 220-280 million.

 

 

Financial highlights 

DKK million

Q3 2019

Q3 2018

9M 2019

9M 2018

Revenue​

414​

377​

1,121​

1,102​

EBITDA​

63​

40​

240​

210​

Adjusted EBITDA​

71​

35​

185​

190​

Adjusted EBITDA margin​

17.2%​

9.2%​

16.5%​

17.3%​

Profit for the period

26

(21)

120

67

Free cash flow

28

(33)

78

(68)

Net interest-bearing debt

1,158

1,178

1,158

1,178

 

  

Conference call

On 27 November 2019 at 10.00 (CET), Goodvalley will host a conference call at which CEO Hans Henrik Pedersen and Vice CEO Kristian Brokop will provide comments on financial and operational performance in Q3 2019, the outlook and answer questions. Registration is not required.

 

The conference call will be conducted in English and can be followed live here:

https://edge.media-server.com/mmc/p/n7y8t2i6

  

Participants should dial the numbers provided below and state conference code 3689973

Denmark:

+45 32 72 80 42

Norway:

+47 239 60264

Sweden:

+46 (0)850 692180

Poland

+48 222 120 152

United Kingdom:

+44 (0)844 571 8892

United States:

+1 631 5107495

 

Find the full report here:

https://www.goodvalley.com/media/1662/goodvalley-interim-report-q3-2019.pdf

 

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