Genus PLC Trading Update (4782Z)
16 Mayo 2023 - 1:00AM
UK Regulatory
TIDMGNS
RNS Number : 4782Z
Genus PLC
16 May 2023
Immediate release
16 May 2023
Genus plc
('Genus' or the 'Group')
TRADING UPDATE
Genus (LSE: GNS) , a leading global animal genetics company,
publishes the following trading update for the period from 1
January 2023 to 30 April 2023, and revised outlook for the 2023
fiscal year.
Trading Update
During the period under review Genus achieved good trading in
its porcine business, with the exception of China, where the market
conditions have been very challenging. Overall, in the four months
to 30 April 2023, PIC achieved strong volume and royalty revenue
growth, and good operating profit growth. North America, Latin
America and Europe all delivered strong growth in operating profit,
whilst Asia experienced a decline in operating profit due to the
performance in China.
Since December 2022 the Chinese porcine market has been weak,
reflecting high supply of slaughter pigs following widespread
African Swine Fever ('ASF'). Expectations of a recovery in the
market grew during February 2023, when the pig price rose from a
low of 14.1 RMB/kg to 15.9 RMB/kg on 2 March. However, since then
the pig price has fallen back below 15 RMB/kg and is currently 14.3
RMB/kg, with continued widespread ASF outbreaks and subdued demand.
At these prices, producers are unprofitable, and many are not
replacing and rebuilding their sow herds at the current time. Due
to the volatile porcine market PIC China's trading has been weaker
than the first half of the fiscal year, achieving lower revenues,
with operating profit also impacted by costs associated with the
clearance of inventory at two PIC farms that were infected by ASF
in the period.
The bovine business saw better trading than in the first half of
the fiscal year, with good volume and revenue growth in North
America, Europe and Asia. Market conditions remained challenging in
Brazil, however all regions achieved operating profit growth. ABS's
revenue and profitability was better than prior year due to the
growth achieved in sexed volumes as well as price increases.
Genus continued to make good progress towards its strategic
objectives with an increase in R&D investments as planned,
supporting the long-term growth prospects of the Group. Our
PRRSv-resistant pig programme has made further positive progress.
An important milestone was the final animal testing for the US FDA,
which was successfully completed this month. Genus now expects to
complete final submissions to the US FDA over the summer, slightly
ahead of the previous timeline.
Outlook
Market researchers are currently anticipating a recovery in the
China porcine market in the summer as the supply decreases and
consumer demand for pork continues to increase, but there is
uncertainty as to the timing of when the demand for porcine
genetics will improve.
Due to the challenging porcine market conditions in China, we
now expect PIC China to be modestly loss making in the second half
of the year, which compares with a profit of GBP8.8 million
delivered in the first half of the year. Consequently, the Board
anticipates that the Group's profit before tax will now be lower
than its previous expectations for the full year.
Despite this the Board remains confident that due to the
investments made PIC China remains well positioned to take
advantage of the recovery and capture the growth opportunity as it
develops, and that the Group's strategy to commercialise the
PRRSv-resistant pig is one of many opportunities ahead for
Genus.
The Group expects to announce its preliminary results for the
year ending 30 June 2023 on 7 September 2023.
For further information please contact:
Genus plc Tel: 01256 345970
Stephen Wilson, Chief Executive Officer
Alison Henriksen, Chief Financial Officer
Buchanan Tel: 0207 466 5000
Charles Ryland /Chris Lane/Verity Parker
This announcement is available on the Genus website
www.genusplc.com
Regulatory Notes
This announcement contains inside information for the purposes
of article 7 of the Market Abuse Regulation (EU) 596/2014 as it
forms part of UK domestic law by virtue of the European Union
(Withdrawal) Act 2018 ("MAR"), and is disclosed in accordance with
the Company's obligations under Article 17 of MAR. The person
responsible for making this announcement on behalf of the Group is
Dan Hartley (General Counsel and Company Secretary).
About Genus
Genus creates advances to animal breeding and genetic
improvement by applying biotechnology and sells added value
products for livestock farming and food producers. Its technology
is applicable across livestock species and is currently
commercialised by Genus in the dairy, beef and pork food production
sectors.
Genus' worldwide sales are made in over seventy-five countries
under the trademarks 'ABS' (dairy and beef cattle) and 'PIC' (pigs)
and comprise semen, embryos and breeding animals with superior
genetics to those animals currently in farms. Genus's customers'
animals produce offspring with greater production efficiency, and
quality, and use these to supply the global dairy and meat supply
chains.
The Group's competitive edge has been created from the ownership
and control of proprietary lines of breeding animals, the
biotechnology used to improve them and its global supply chain,
technical service and sales and distribution network.
With headquarters in Basingstoke, United Kingdom, Genus
companies operate in over twenty-five countries on six continents,
with research laboratories located in Madison, Wisconsin, USA.
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