Ingham’s profit plunges as virus dents demand
Ingham's produced more poultry during the 2019-20 financial year but was hit by a fall in demand, while COVID-19 restrictions constrained supply chains and operations in Australia and New Zealand.
The company managed to lift production levels by 3.3 per cent despite the disruptions and was met by oversupply in both markets in the June quarter.
Feed costs were higher due to tight domestic wheat supply and inflated prices for imported ingredients, contributing to a more than 68 per cent net profit plunge to $40.1 million.
Chief executive Jim Leighton said it had been a period of considerable stress and uncertainty, but operations had quickly responded to changing demand requirements.
"The Ingham's team has performed exceptionally well in managing through the increased cost, complexity and volatility that COVID-19 has imposed on our business," Mr Leighton said.
Investors were pleased with the result, sending the company's shares more than 4 per cent higher.
Ingham's warned the outlook was uncertain as government restrictions continued to affect chicken and turkey consumption and could again disrupt supply, resulting in reduced capacity or processing plant closures.
The company was forced to close its Thomastown plant in Victoria last month for 10 days after five employees tested positive for the virus.
"Inghams has delivered a solid result, but caution on the outlook for feed costs may weigh on the stock," Citi analysts said.
Originally published as Ingham's profit plunges as virus dents demand