Resume
The Board of Directors and Management of FirstFarms A/S has today reviewed and adopted the annual report for 2016.
2016: EBIT-result as expected - satisfactory yields but influenced by low milk- and crop prices
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In 2016, FirstFarms realised a turnover of DKK 130.3 million, an EBIT-result of DKK -2.8 million and a pre-tax result of DKK -12.5 million. The EBIT-result is improved by DKK 12 million compared to 2015 and corresponds, before write-down of land, to the expectations announced in November 2016.
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The result is influenced of a write-down on land of DKK 3.6 million in Romania without land book.
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The result is not satisfactory, but must however be seen in connection with the challenges the low milk price has caused in large parts of 2016.
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FirstFarms realised a very satisfactory harvest in Slovakia in 2016. Record yields are realised in both spring- and autumn crops, which in total are significantly above budget. In East and West Romania, the crops had yields as budgeted. The sales prices are significantly below budget. Overall, the crops have affected the result positively with DKK 6 million in 2016 compared to budget and with DKK 23 million compared to last year.
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Sold quantity of milk is increased with 1.7 million kg in 2016 compared to 2015. Thus 23.5 million kg milk was delivered from FirstFarms in 2016. On a daily basis, approx. 30 kg milk per milking cow is delivered at the end of 2016 with a competitive cost price.
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The milk price was very low entering 2016 and decreased further until the summer 2016, after which it started to increase again. Thus, the milk price had during 2016 been in the range from DKK 1.31 to DKK 2.54. The average sales price in 2016 constituted DKK 1.71 per kg compared to DKK 2.61 and DKK 1.98 per kg in 2014 and 2015, respectively. At the end of 2016, the milk price was DKK 2.54. The milk price affects the result with DKK -7 million compared to budget for 2016 and with DKK -6 million compared to last year.
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FirstFarms has entered a conditional agreement about purchase of pig production in Hungary with final take-over in Q1, 2017.
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In 2016, FirstFarms realised a cash flow from main activities of DKK 12.3 million.
2017: Expectations
In 2017, FirstFarms expects an EBIT-result in the level of DKK 18-22 million.
Earnings in 2017 are expected to be stable for milk- and pig production in EU.
Crop prices are expected to be on par with realised prices in 2016, and a milk price of DKK 2.50 is expected.
In 2017, the company will work on development of the platform for pig production and stabilise the operation in the milk production. The field production is expected to be increased with a smaller area, whereas the stock facilities for crops are expected to be optimised, so the harvest pressure is minimised.
FirstFarms' annual report can be seen in its full length in the attached document/link (75 pages).
Billund 28 March 2017
FirstFarms A/S
For further information:
Please visit our website www.firstfarms.com or
contact CEO Anders H. Nørgaard on telephone +45 75 86 87 87.