An increase in bovine product revenues at global animal breeding business Genus was balanced by a decline in porcine sales, to leave group sales unchanged for the first half of its financial year.
The UK-listed company has reported an operating loss of £6.3 million on revenues of £238.8m in the six months to December 31st 2018, compared to an n operating profit of £14.3m on £238.6m from H1 2017/18. The loss is attributed to the downward valuation of bovine biological assets and a pension equalisation charge affecting legacy funds following a court case.
The ABS cattle division saw bovine revenues increase by 2% to £107.8m. Overall volumes were up by 7%, but the Sexcell sexed genetics line saw 26% dairy growth and 24% for beef. The company has invested in three more IntelliGen sexed semen production facilities around the world, following those in the US, India and Norway.
Revenues from the PIC porcine division fell by 1% to £125.6m. There were fewer animal shipments in China due to transport restrictions to help control the rapid spread of African Swine Fever there. A 49% fall in Chinese volumes in the period caused a £3m profit reduction.
But the PIC pig division’s overall volumes excluding China were up by 5%, with strong performances in Latin America and Spain. PIC royalty revenues grew by 12%, a strategically important factor as the business moves from animal sales to a royalty model.
Genus invested 10% more in R&D over the period, and is making progress with its gene edited lines resistant to the PRRSv disease.
“Genus performed well in challenging markets and made substantial strategic progress in the first half of the 2019 fiscal year,” comments chief executive Karim Bitar. “ABS continued to grow profit in double digits, driven by a combination of the success of Sexcel and NuEra, our proprietary beef genetics. Genus is well placed to benefit from and drive the accelerating market trend of dairy customers using sexed and beef genetics in combination.
“As anticipated, PIC was affected negatively by ASF in China but grew strongly in Europe and Latin America and we successfully commenced our strategic relationship with Møllevang Genetics. Our gene editing programme for PRRSv resistance in pigs made good progress and we have substantially increased the number of animals carrying the edit while continuing to engage constructively with regulatory authorities.
“We anticipate growing in the second half and performing in line with the Board’s expectations in constant currency for the full year.”