Farm Ireland

Saturday 23 March 2019

Glanbia warns tariffs could disrupt dairy prices, growth plans

Photo Mark Stedman/Photocall Ireland
Photo Mark Stedman/Photocall Ireland

Padraic Halpin

The imposition of trade tariffs around the world could cause some disruption to dairy prices and affect growth objectives Irish nutrition company Glanbia laid out in May, its finance director said on Thursday.

Glanbia, a supplier of protein supplements for gym goers, wants to boost revenues by over a third to €5 billion (£4.51 billion) by 2022 and target average earnings per share (EPS) growth of 5-10pc on a constant currency basis through that period.

It reiterated its guidance for 5 to 8pc EPS expansion this year after a 7pc dip in the first half came in line with expectations, but noted in its results that further trade tariffs may negatively impact its five-year growth plan.

“The area that we are looking at quite closely is what is happening on the global trade front, particularly with discussions around tariffs etc, that could cause some disruption (to dairy prices),” Mark Garvey told Reuters in a telephone interview.

“At this point, we’d say dairy prices are relatively stable and we’d see that for the next number of months with an eye on the impact on global trade.”

Shares in the Kilkenny-based firm were 3.5pc lower at €14.59 by 08.15 GMT.

While Garvey said Glanbia’s primary exposure to tariff risks was through dairy prices, some of its products had already been affected by the imposition of specific duties.

He highlighted trade that one of its joint ventures carries out from the United States to Mexico and sales to China via its ingredients business as areas Glanbia is monitoring closely.

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“For some products, not very material at this point, we have seen tariffs come in. As those kicked in from July, we talked to customers and suppliers and were able to mitigate them,” Garvey said.