Commodity inflation sees Q2 margin squeeze for BioMar

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Increased demand for soy bean crop coupled with a poor US 2020 harvest sees margins squeezed across the aquaculture feed sector.

The aquaculture feed producer BioMar’s second quarter results saw volume sales increase 4 per cent year-on-year. Meanwhile, realised revenue was up by 6 per cent from DKK 2,695 million (US$425 million) in Q2 2020 to DKK 2,858 million (US$450 million) in Q2 2021. EBITDA (earnings before interest, taxes, depreciation, and amortisation), however, was down around 3 per cent to DKK 215 million (US$34 million).

A good position
In a statement released alongside the results, Carlos Diaz, BioMar Group CEO, said, “We have managed to keep a good position in the markets despite intense competition for volumes and a situation where we have not been able to fully offset the steep increase in raw material prices.”

“Our development of new product solutions and the close collaboration with our customers during this pandemic period of volatility, have been important drivers of our expansion in customer portfolio and volumes.”

Global development in raw material prices
“We can clearly see that the global aquaculture industry has started to recover from the closing of the HORECA sector, the export and logistic challenges, and the Mediterranean storm Gloria which in 2020 destroyed a significant part of the net cages in the area. However, we are challenged by raw material prices increasing beyond any expectations,” explained Diaz.

“This global development in raw material prices and freight costs puts pressure on our margins and earnings. We face a very tough scenario for global raw material development, but I am confident we will be able to deliver solid results for this year”, concluded Diaz.