Inghams Group (ASX: ING) expects seasonality to impact 2HFY24 earnings after stellar show in 1H

Highlights

• Inghams Group is an Australian based poultry producer
• In 1HFY24, ING’s revenue increased by 8.7% YoY to AUD 1,642.2 million, while net profit shot up by 268.6% YoY to AUD 63.4 million
• By the end of September 2024, the company expects to complete the acquisition of organic chicken business of the Bostock Brothers in New Zealand

Founded in 1918, Inghams Group Limited (ASX: ING) is an ASX-listed integrated poultry producer, focused on production and selling turkey and chicken products. In the financial year 2023 (FY23), the Australia based consumer company recorded 12.2% YoY rise in its revenue to AUD 3,044 million and 13.3% YoY rise in its EBITDA to AUD 440.30 million in the financial year 2023 (FY23). During the reported period, net income jumped over 72.1% to AUD 60.40 million, with 2.4% decrease in net debt to AUD 1,631 million.

Highlights of 1HFY24 results

In the first half of FY24 (1HFY24), the company recorded an 8.7% YoY increase in its revenue to AUD 1,642.2 million, compared to AUD 1,511.2 million in the previous corresponding period. The revenue growth was underpinned by increases in  net selling price (NSP)  in FY23 and in the beginning of FY24.

Meanwhile, in 1HFY24, operating profit reached AUD 131.7 million, compared to AUD 61 million in previous corresponding period and net profit grew by 268.6% YoY to AUD 63.4 million.

Business expansion plan

The company had revealed its plan to acquire 100% interest in the organic chicken business of the Bostock Brothers in New Zealand. The AUD 33 million acquisition is expected to be concluded by the end of the September 2024.

Outlook

In the second half of FY24, the company expects market conditions to remain difficult for consumers. In 2HFY24, the poultry volume and channel mix are expected to move like the consumption patterns because consumers react to the cost of living pressures.

On 31 October 2023, through an ASX-filing, the company informed that results in 2HFY24 are anticipated to be lower than 1HFY24 because of ongoing inflationary pressure across feed, labour and other costs such as CO₂, energy and fuel, and typical seasonality.

Share performance of ING

ING shares closed 0.57% lower at AUD 3.51 apiece on 12 June 2024. In the past one year, ING’s share price has increased by almost 30% and in the last three months, it has dropped by 5.39%.

The 52-week high of ING is AUD 4.51, recorded on 6 February 2024, and the 52-week low is AUD 2.58, recorded on 3 July 2023.

ING Daily Technical Chart, Source: REFINITIV

Note 1: Past performance is neither an Indicator nor a guarantee of future performance.

Note 2: The reference date for all price data, and currency, is 12 June 2024. The reference data in this report has been partly sourced from REFINITIV.

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