FirstFarms A/S Half-Year Financial Report 2024 Insights
![FirstFarms A/S Half-Year Financial Report 2024 Insights](https://investorshangout.com/images/blog/ihnews-FirstFarms%20A%2FS%20Half-Year%20Financial%20Report%202024%20Insights.jpg)
FirstFarms A/S Reports on Half-Year Financial Performance for 2024
Low Crop Prices and Limited Rainfall Impact Expectations
For the first half of the year, FirstFarms A/S has successfully maintained EBITDA levels while increasing turnover by 8% due to solid animal production performance. However, crop and pig production have negatively influenced overall earnings expectations. Consequently, FirstFarms has adjusted its projected earnings downwards by 20 million DKK for the year, although this adjustment does not impact the company's long-term growth objectives. FirstFarms continues to showcase a robust financial foundation and readiness in liquidity.
Key Financial Figures for H1 2024
During this reporting period, FirstFarms has achieved the following key financial results:
A turnover of 220 million DKK (compared to 203 million DKK in 2023)
An EBITDA of 65 million DKK (compared to 67 million DKK in 2023)
An EBIT of 35 million DKK (compared to 42 million DKK in 2023)
A result before tax amounting to 18 million DKK (compared to 39 million DKK in 2023)
This 8% turnover increase is largely attributed to higher sales of piglets from the recent production establishments in Hungary.
Operational Insights: Efficiency and Challenges
FirstFarms' strategic business model emphasizes efficiency in production, circularity, land ownership, and risk diversification across various operational branches and geographic areas. This strategy allows the company to deliver an adequate EBITDA performance. However, earnings before tax have fallen short of last year's results chiefly due to heightened interest rates and inflation, driving up operational costs. The management sees a positive aspect in having irrigation established on 1,300 hectares in Romania, which is anticipated to ensure stable crop yields moving forward. Plans are underway to broaden irrigation coverage in the future.
Market Trends in Animal Production
FirstFarms reports that efficiency and productivity levels remain high, resulting in a 4% increase in milk production compared to the same period last year. While the price of milk has been on an upward trend in 2024, it has yet to match the prices experienced in H1 2023. Prices for piglets and slaughter pigs have remained favorable in the first half, even as pig prices have slipped since July. However, they continue to maintain an acceptable market level.
Additionally, the turnover derived from piglets and slaughter pigs has risen by 25 million DKK compared to H1 2023, facilitated by the introduction of two new pig production facilities in Hungary.
Crops Facing Price Challenges in Europe
Crop production continues to be pressured by lower prices relative to those realized in 2023, adversely impacting overall earnings. However, there is an expectation of a gradual increase in crop prices moving forward. FirstFarms markets 65% of its crop production while utilizing the remaining 35% for animal feed. Although the harvest season is not yet complete, it is marked by significant geographical differences in yield and quality primarily due to limited rainfall.
Land Portfolio Expansion
During the review period, FirstFarms has successfully expanded its land portfolio by 325 hectares through acquisitions in both Romania and Slovakia. The company now manages a robust total of 17,000 hectares of land, which is viewed as an inflation-resistant asset, constituting a quarter of the overall balance sheet.
Commitment to Sustainability
The commitment to enhancing sustainability remains a core focus for FirstFarms, which includes reducing emissions and aligning operations with CSRD and EU taxonomy regulations. The company is also dedicated to implementing effective digital solutions to aid in this transition.
Adjusted Expectations for 2024
In light of current conditions, FirstFarms has revised its 2024 projections downwards by 20 million DKK, anticipating an EBITDA in the range of 90 - 120 million DKK and an EBIT of 30 - 60 million DKK. For reference, the company achieved an EBITDA of 101 million DKK and an EBIT of 50 million DKK in 2023. While there is a hope for rising crop prices for the remainder of 2024, current indicators suggest that pig and milk prices will sustain at recent levels, although there have been declines in both categories during Q3. Limited rainfall and heat waves have adversely affected the ongoing harvest.
FirstFarms’ enduring strategy focusing on circularity and risk management continues to serve as a solid framework, aiming to support the company in achieving its long-term objectives, even in challenging circumstances.
The overarching goal for FirstFarms is to increase the Group's annual turnover to 750 million DKK and achieve an EBITDA of at least 240 million DKK by 2028.
Frequently Asked Questions
What is the main focus of FirstFarms A/S's financial report for H1 2024?
The report highlights the company's financial performance, reflecting an 8% increase in turnover amidst challenges in crop prices and limited rainfall impacting expectations.
How proficient is FirstFarms in managing its agricultural land?
FirstFarms successfully manages a total of 17,000 hectares of agricultural land, which has been recently expanded, positioning itself as an inflation-proof asset.
What are the expectations for FirstFarms in the coming months of 2024?
FirstFarms anticipates a gradual increase in crop prices, while pig and milk prices are projected to stabilize at current levels.
What strategies does FirstFarms implement to ensure sustainable operations?
FirstFarms is committed to reducing emissions and aligning its operations with emerging regulations while integrating effective digital tools into its sustainability initiatives.
What are FirstFarms A/S's long-term financial goals?
The company aims to boost its annual turnover to 750 million DKK and reach an EBITDA of at least 240 million DKK by 2028.
About Investors Hangout
Investors Hangout is a leading online stock forum for financial discussion and learning, offering a wide range of free tools and resources. It draws in traders of all levels, who exchange market knowledge, investigate trading tactics, and keep an eye on industry developments in real time. Featuring financial articles, stock message boards, quotes, charts, company profiles, and live news updates. Through cooperative learning and a wealth of informational resources, it helps users from novices creating their first portfolios to experts honing their techniques. Join Investors Hangout today: https://investorshangout.com/
Related Articles
- Analyzing Abercrombie & Fitch's Recent Earnings Report
- Transcontinental Inc. Announces Q3 2024 Financial Results
- Alm. Brand A/S Trading Report by Executives and Related Parties
- Columbus A/S Shares Transaction Notification and Management
- Pixalate Reveals Top Grossing CTV Apps for 2024
- SoFi Technologies: Disruption in Financial Services
- Understanding Retirement Strategies to Ensure Financial Security
- RealManage Achieves 2024 Great Place to Work Certification
- Chewy Inc. Reports Strong Q2 Earnings Results
- Alda Credit Fund II Announces Interim Financial Results