FirstFarms Faces Financial Hurdles Amid Price Challenges
Unsatisfactory interim result – impacted by low prices
FirstFarms A/S has released its interim financial report for the years first nine months, reflecting a challenging analysis with a result of -6 million DKK. Despite reasonable yields across fields this year, overall prices have not met expectations.
The significant issue during Q2 and Q3 stemmed from an outbreak of foot and mouth disease (FMD), which greatly affected both the output and finances, particularly hindering milk production revenue.
The Board of Directors and Management have thoroughly reviewed the unaudited interim financial accounts for the specified period.
Main Financial Figures
During this reporting period, FirstFarms has achieved the following:
- Turnover of 284 million DKK (compared to 327 million DKK in 2024)
- EBITDA reaching 72 million DKK (down from 86 million DKK in 2024)
- EBIT is recorded at 21 million DKK (decreasing from 41 million DKK)
- Result before tax stands at -5 million DKK (declined from 13 million DKK last year)
The significant decrease in turnover this year—down by 13 percent—was primarily influenced by reduced milk sales and a downturn in pig prices. Consequently, the results before tax have also seen a decline, greatly attributed to the ongoing effects of FMD and a negative revaluation of stock due to low market prices.
Although the group's harvest yields are satisfactory, the unfavorable pricing environment has heavily influenced the overall results for the first three quarters.
Co-CEO Michael Hyldgaard expressed concerns regarding the financial performance: "We are not satisfied with the result for the first 9 months. We have been affected by lack of milk production because of FMD, but low and decreasing prices for pigs and crops have also had a major impact on the result."
Status on FMD and Recovery Efforts
In relation to the FMD outbreak confirmed earlier in the year, significant remediation efforts have been put in place since the onset of the disease. Following the necessary culling of cattle, the farm has undergone thorough cleaning and disinfection processes. By early September, 36 test animals were introduced, all of which tested negative for the disease. Officially being declared free of FMD on September 24 signals a positive turning point for FirstFarms.
Following this declaration, plans for optimization and upgrades to the farm commenced, resulting in the anticipated introduction of livestock by December 2025. Additionally, FirstFarms has acquired 1,900 pregnant heifers and cows, which showcases a proactive approach to restoring production levels.
Co-CEO Søren Bredvig highlighted the dedication of employees in overcoming the challenges of the FMD outbreak, leading to expectations of resuming milk production to pre-FMD levels by the second half of 2026.
Future Expectations for 2025
Due to the repercussions of the FMD outbreak, FirstFarms has revised expectations for the financial year downwards by 45 million DKK. The herd was insured for 31 million DKK, with 60% received by the end of Q3. Remaining payouts from the insurance policy are anticipated before year-end, although operational losses remain uninsured.
Additionally, FirstFarms has pursued regional subsidies to support investments in livestock and mitigate other outbreak-related costs. The estimated subsidy is expected to be between 50-60 million DKK and will significantly impact earnings in 2025, contingent on maintaining the herd for five years.
Looking ahead, FirstFarms anticipates:
- EBITDA between 60 - 90 million DKK
- EBIT fluctuating between -10 - +20 million DKK
There is optimism regarding slightly increasing pig and crop prices for the remainder of the year, with expectations of a market turnaround toward higher prices as Q4 continues.
Best regards,
FirstFarms A/S
Frequently Asked Questions
What were FirstFarms' primary challenges in this report?
The main challenges included low market prices for pigs and the impact of foot and mouth disease on production and sales.
How did the FMD outbreak affect FirstFarms’ operations?
The FMD outbreak led to significant reductions in milk production, culling of livestock, and disruptions in sales revenue.
What measures has FirstFarms taken to recover from FMD?
They have implemented extensive cleaning, introduced test animals, and begun farm upgrades, expecting to resume normal milk production levels by mid-2026.
What are FirstFarms’ financial forecasts for 2025?
They project an EBITDA between 60 and 90 million DKK and an EBIT ranging from -10 to +20 million DKK.
What strategic steps is FirstFarms taking moving forward?
FirstFarms is focusing on optimizing operations, acquiring livestock, and anticipating a rebound in prices to enhance financial performance.
