Inghams shares tank on negative outlook
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More news: Shares in Inghams Group have plunged as the company issued weaker than expected underlying EBITDA guidance.
At 2:22pm AEST, shares in Inghams Group had slipped 19.9% to $2.84.
RBC Capital Markets analyst Michael Toner said that although the FY25 result was "largely in line with guidance, we expect this to be overshadowed by negative outlook" as underlying EBITDA guidance came in 2.3% lower than the market consensus estimate and 1.1% lower than RBC's expectation.
Inghams Group profit falls 11.5%
The news: Australia's largest poultry producer Inghams Group has posted full-year profit of $89.8 million, 11.5% lower than the $101.5 million posted in the previous corresponding period. The company said its core poultry volume declined amid the transition to a new Woolworths supply agreement and "softer market conditions".
The numbers: The profit figure for FY25 was behind the market consensus estimate of $99 million, according to Visible Alpha. EBITDA fell 15.3% compared to $471.1 million in FY24.
Underlying EBITDA was $236.4 million, in line with the previous year. Meanwhile revenue fell by 1.5% from $3.26 billion to $3.15 billion as core poultry volume declined 1.4% to around 461,200 tonnes.
A total dividend of 19 cents per share was declared, lower than the 20 cents per share declared in FY24 and expected by the market.
For FY26, Inghams is guiding underlying EBITDA of between $215 million and $230 million with group core poultry volume expected to be slightly lower "reflecting recent customer pricing outcomes, subdued Wholesale market conditions and competitive intensity for new business".
The context: Inghams said its Australian retail volume decline of 4,000 tonnes was driven by its transition to a smaller agreement with Woolworths and softer market conditions during the fourth quarter of FY25. Volumes also declined for the company's wholesale and export business.
The New Zealand business however saw poultry volume increase 5.2% due to retail growth.
What they said: "FY25 was a year of significant change, and I am proud of how the business responded, successfully completing the Woolworths contract renewal and onboarding of new customer volumes despite challenging Australian market conditions," Inghams CEO and managing director Ed Alexander said.
The sources: ASX, RBC Capital Markets research
