Revenue at Glanbia increased in the first three months of the year, however the group has withdrawn its full year financial guidance amid “volatile” demand.
The company traded well in the three months to 4 April due to good demand for its products and ingredients, which are mainly sold in shops, according to a trading update.
During the period wholly owned revenue increased 17pc in constant currency.
On a reported basis, reflecting the stronger US Dollar Euro foreign exchange rate, revenue increased 20pc when compared to the same period in 2019.
The drivers of the revenue increase, on a constant currency basis, were price growth of 9.2pc, volume growth of 6.3pc and the company’s Watson acquisition representing 1.5pc.
Since Glanbia’s last update to the market in February, a large proportion of the global population is now in lockdown.
This has impacted peoples shopping activity in a variety of ways, leading to “volatility” as customer behaviours change due to the Covid-19 crisis.
The company said it was “difficult to model how those behaviours will evolve.”
Siobhán Talbot, managing director of Glanbia, said: “Overall demand in our key end markets was positive in the first quarter, however greater volatility in consumer shopping behaviour was evident in recent weeks arising from Covid-19 and due to uncertainty of duration and impact of this pandemic, full year 2020 financial guidance is withdrawn.”
During the three months to 4 April the Kilkenny-headquartered company experienced “strong demand” in North America, which was offset by weaker demand in international markets where the challenges posed by the coronavirus had a greater impact, the company said.
Glanbia's net debt at 4 April was €690.3m, a decrease of €119.5m versus the net debt position at the end of the first quarter of 2019.
The decrease was primarily driven by continuing strong operating cash flow, the company said.
In response to the financial market uncertainty in March, on 8 April, Glanbia said it completed a precautionary measure of extending the maturity date on $351m facilities due 5 November 2020 to 5 July 2021.
So far the company has experienced limited operational disruption from the global pandemic.
Glanbia holds its AGM today. Due to government restrictions it will be a closed meeting.