Chr. Hansen outlook undimmed by profit dip
Danish food ingredient maker Chr. Hansen said on Thursday a second-quarter profit miss was due to on…Danish food ingredient maker Chr. Hansen said on Thursday a second-quarter profit miss was due to one-offs and kept its guidance unchanged.
Chr. Hansen, which makes products such as enzymes, food colouring and cultures, said operating profit fell 22 percent 32.6 million euro, short of forecasts for 43.8 million, as it took a non-cash charge on a failed study and also suffered one-off costs related to a sales platform and changing its CEO.
It forecast full-year organic revenue growth of 7-9 percent and an operating margin above last year's 26.5 percent, keeping it among the most profitable companies in the sector.
Analysts expect Chr. Hansen to produce solid profit growth with healthy margins for years to come as it sits on a lucrative product line, justifying a premium.
Its shares trade 26-28 times its expected 2013 earnings after a 47 percent increase over the past year with some analysts calling it a safe haven stock.
One of its few difficulties this year has been falling prices for carmine, a key ingredient in food colouring.
"The price is approaching stabilisation but it has been a bit lower than we expected in the first half of our financial year," Chief Financial Officer Klaus Pedersen said.
The firm was forced to cut carmine prices in the first half to stabilise its volumes, although this came at the expense of margins.
"I expect the price to be relatively stable going forward."
Although the company did not announce either a share buyback or a special dividend as some analysts had expected, Pedersen said the company's policy of returning excess capital to shareholders was unchanged.
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