Linked In
News In
Linked In

You are viewing 1 of your 2 complimentary articles.

Register now to receive full access.

Already registered?

Login | Join us now

FirstFarms shares fall, after warns over dryness, milk price revival

Twitter Linkedin eCard

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.

Milk price disappointment

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,

Market reaction

FirstFarms stood by its forecast for full year operating profits of Dkk18m-22m.

Nonetheless, its shares fell 5.0% to DKK66.00 in afternoon deals.

By Mike Verdin

Twitter Linkedin eCard
Related Stories

Morning markets: Soybean futures nudge higher. How much further will the rally go?

After all, there is already a "large premium" in prices to account for Argentine weather worries, one commentator notes. Wheat futures reverse

Evening markets: Soybeans extend rally, as Argentina forecast 'continues to trend drier'

...while wheat futures get help from worries over US dryness, and talk of "blowing dust" in Texas. Corn can’t keep up the pace

Funds renew ag selling wave - leaving them open to 'precarious position' on soy

... and potentially leaving them vulnerable to short-covering drives in the likes of wheat, coffee and sugar too. Still, in cotton...

Can wheat prices in 2018 rise for a second successive year?

... for the first time since 2007? Prices remain low enough to put pressure on production prospects. But will it prove sufficient to allow the market to tighten? Top commentators give their views
Home | About | RSS | Commodities | Companies | Markets | Legal disclaimer | Privacy policy | Contact

Our Brands: Comtell | Feedinfo | FGInsight

© 2017 and Agrimoney are trademarks of Agrimoney Ltd
Agrimoney is part of the Briefing Media group
Agrimoney Ltd is registered in England & Wales. Registered number: 09239069