Genus' ABS unit has 'challenging start' to FY, PIC trading remains 'robust'
Animal genetics firm Genus said its ABS division has had "a challenging start" to the year but noted that PIC trading in the roughly five months ended 21 November had been "robust".
Genus said on Wednesday that PIC saw year-on-year growth in both volumes and royalty revenues. While it was "relatively insulated" from US producer losses caused by low pig prices, and also "performed well" in Latin America and Europe, pig prices in China continued to be depressed and the majority of producers in the Asian nation remained loss-making.
"This compares with a relatively strong period for Chinese pork prices in the equivalent period last year. Against this strong comparator, PIC Asia's adjusted operating profit was lower than the prior year," said Genus.
The FTSE 250-listed firm also said ABS made a rough start to the year, with lower year-on-year volumes being partially offset by improvements in prices and mix. Genus said ABS' adjusted operating profit was lower than the prior year but noted there were "significant operational improvements underway" within ABS which it expects to drive improved adjusted operating profit performance for the full year.
"As anticipated, R&D costs in the period were higher year-on-year, reflecting the annualised operating cost impact of Atlas, PIC's new nucleus farm, and expenditure in relation to PRRS Resistant Pig commercialisation," said Genus.
As of 1010 GMT, Genus shares were down 3.13% at 2,046.0p.
Reporting by Iain Gilbert at Sharecast.com