Shares in FirstFarms tumbled after the eastern European farm
operator unveiled a return to the red, despite a better-than-expected start to
the group's entry into pig production.
The Copenhagen-listed group, which operates in Hungary, Romania
and Slovakia, reported a loss of DKK2.14m for the April-to-June period -
following on from earnings of DKK4.45m in the first three months of the year,
FirstFarms' first quarter in the black in two years.
The loss in the latest quarter, which compared with a loss
of DKK243,000 a year before, came despite a more than doubling in turnover, to DKK33.8m,
boosted by the group's acquisition of Dan-Farm Holding, which controls a
2,200-sow pork operation in Hungary.
Indeed, the pig business "has contributed a higher operating
profit than recognised in FirstFarms' budget", the group said.
However, FirstFarms added that while milk production at its
Slovakian dairy operation had met forecasts, prices had not enjoyed quite the
recovery that it had pencilled in.
"The milk price has been a little lower than expected," the
group said, if adding that values were "significantly higher than last year".
Slovakian milk prices rose 29% year on year to average E29.99
per 100 kilogrammes in June, according to European Commission data, which puts at
36% the average rate of increase in eastern Europe, as measured by the
so-called EU-15 countries.
'Lack of rainfall'
Furthermore, FirstFarms reported lower-than-expected yields
from winter crops, "due to a dry spring period, especially in Slovakia".
The commission's Mars agricultural meteorology division last
week, flagging "lack of rainfall and consequent dry soils" limiting crop growth
in parts of Austria, the Czech Republic and Slovakia, pegged Slovakia's average
wheat yield at 4.99 tonnes per hectare, a drop of 16% year on year.
"Also, lower harvest yields are expected for the spring
crops," FirstFarms said.
Mars forecasts the Slovakian corn yield this year tumbling by
26% to 6.28 tonnes per hectare,
FirstFarms stood by its forecast for full year operating
profits of Dkk18m-22m.
Nonetheless, its shares fell 5.0% to DKK66.00 in afternoon