The COVID-19 pandemic and related stay-at-home orders had a meaningful impact on the financial performance of Australia-based poultry company Ingham’s Group.
The company, which has operations in Australia and New Zealand, on August 21 released the financial results for its latest fiscal year that ended on June 27. Ingham’s revealed that despite an increase in poultry volumes when compared to the previous fiscal year, its net profit after taxes dropped 86.1% to AU$40.1 million (US$28.7 million).
Ingham’s described the company’s first quarter as “difficult,” but added that positive operating momentum was delivered through the second and third quarters.
“This progress was interrupted by a decline in Q4 poultry demand caused by COVID-19 restrictions across customer channels, including a Level 4 (lockdown) restriction period for five weeks in New Zealand,” the company stated.
Ingham’s core poultry volumes saw a 4.3% growth, but core poultry volumes in New Zealand dropped 2%, which the company said was largely attributable to Level 4 restrictions in the country.
During the past fiscal year, Ingham’s also was challenged by elevated feed costs, brought on by a tight wheat supply and inflation of key imported ingredients.
CEO Jim Leighton praised the efforts of the Ingham’s team as the company navigated the COVID-19 challenges.
“The Ingham’s team has performed exceptionally well in managing through the increased cost, complexity and volatility that COVID-19 has imposed on our business,” he said. “We introduced measure to minimize the potential impacts of the coronavirus on our people whilst mitigating disruption to our supply chain. We have also worked collaboratively with our customers, and our operations have quickly responded to changing demand requirements to ensure supply continuity of our high quality products during this period of considerable stress and uncertainty.”
Looking forward
Ingham’s stated that poultry continues to be a preferred protein in the markets it serves, and that the industry provides a consistent supply at an attractive price. However, conditions remain uncertain as government restrictions in Australia and New Zealand continue to impact consumption.
The company also noted that the market supply could very well be impacted due to reduced processing capacity. The company suspended production at its further processing plant in Thomastown, Victoria, for a 10-day period in late July and early August. Several days after the Thomastown plant resumed operations, the Victorian government implemented Stage 4 lockdown measures that call for a 33% percent reduction in the workforce at poultry plants.
