Improved market conditions and solid performance
Goodvalley increased its production and sales of live pigs in Q2 2019 as market conditions and prices improved across Europe. Higher input prices had Goodvalley reduce the number of pigs slaughtered as the sales price for value added pork products could not immediately be adjusted to compensate the elevated cost level. Operational performance remained strong at Group level despite negative effects of the aftermath of cases of stomach ulcers in the herd in Ukraine in Q1.
“We were pleased to maintain strong operational performance in the quarter while building up the herd across our markets to an all-time high on the back of our recent investments in improved and upgraded stables. Our live pigs sales benefited from the improved demand in Europe, which led to less profitable pork production at our slaughterhouse, though, as the steep increase in input costs could not be immediately compensated by higher sales prices for pork products on supermarket shelves,” says CEO Hans Henrik Pedersen
Q2 2019
- Group revenue increased to DKK 385 million (Q2 2018: DKK 374 million) as Goodvalley sold more live pigs at a higher average price. The Group’s Adjusted EBITDA* declined slightly to DKK 77 million (Q2 2018: DKK 83 million) corresponding to an Adjusted EBITDA margin of 20.0% (Q2 2018: 22.2%) due to lower sales of pork products and higher feed costs.
- Revenue in the Polish business was stable at DKK 240 million (Q2 2018: DKK 239 million), and Adjusted EBITDA increased to DKK 22 million (Q2 2018: DKK 18 million). The development was driven by higher live pig sales volume and price, which was partly offset by lower pork sales volume during the quarter.
- In Ukraine, revenue increased to DKK 97 million (Q2 2018: DKK 92 million) based on moderately higher volumes and prices. Adjusted EBITDA declined to DKK 37 million (Q2 2018: DKK 49 million) due to repercussions of cases of stomach ulcers in the pig production in Q1, as well as lower expectations for the upcoming harvest.
- Russia lifted revenue to DKK 48 million (Q2 2018: DKK 43 million), whereas Adjusted EBITDA declined to DKK 13 million (Q2 2018: DKK 20 million) due to a negative impact on the arable activities caused by drought in the spring as well as a significant reduction in the meat-to-feed ratio.
Outlook
Goodvalley maintains expectations of generating revenue of DKK 1,400-1,550 million and an Adjusted EBITDA of DKK 220- 280 million in 2019.
Financial highlights
| DKK million | Q2 2019 | Q2 2018 | 2018 |
| Revenue | 385 | 374 | 1,473 |
| EBITDA | 136 | 73 | 212 |
| Adjusted EBITDA | 77 | 83 | 222 |
| Adjusted EBITDA margin | 20.0% | 22.2% | 15.1% |
| Net income | 95 | 34 | 22 |
| Free cash flow | 45 | (41) | (75) |
| Net interest bearing debt | 1,186 | 1,142 | 1,171 |
Conference call
On 28 August 2019 at 10.00 (CEST), Goodvalley will host a conference call at which CEO Hans Henrik Pedersen and Vice CEO Kristian Brokop will provide comments on financial and operational performance in Q2 2019, the outlook and answer questions. Registration is not required.
The conference call will be conducted in English and can be followed live here:
https://edge.media-server.com/mmc/p/vuzfpixi
Participants should dial the numbers provided below and state conference code 9792507
| Denmark: | +45 32 72 80 42 |
| Norway: | +47 239 60264 |
| Sweden: | +46 (0)850 692180 |
| Poland | +48 222 120 152 |
| United Kingdom: | +44 (0)844 571 8892 |
| United States: | +1 631 5107495 |
Further information
Group Communications, Anne Axelgaard
+ 45 76 52 20 00
GOODVALLEY AT A GLANCE
Goodvalley is an international producer of high-quality pork products operating in Poland, Ukraine and Russia based on Danish production standards. The company is to a large extent self-sufficient and masters the whole production chain from field to fork, from growing crops for feed, breeding and slaughtering pigs including using the manure in biogas facilities to produce electricity and organic fertilizer for the fields. Goodvalley is certified as CO2 neutral in the entire organisation by German TÜV and operates according to the highest standards in terms of animal welfare, transparency in the production and sustainable production methods.
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