Schouw & Co. released an interim report for the third quarter of 2022 that shows a quarter with solid revenue improvement. Mostly, driven by higher selling prices. Several of the companies reported fewer volumes sold than in the third quarter of last year.
In more detail, the report indicates consolidated revenue improved by 33% to DKK 9,168 million in Q3 2022 from DKK 6,891 million in Q3 2021.
BioMar and GPV were the main drivers of the improvement, but the four other companies also contributed. Revenue for the year to date amounted to DKK 22,931 million, a 32% increase from DKK 17,383 million in the 9M 2021 period.
The Schouw & Co. Group’s operations produced a DKK 121 million cash outflow in Q3 2022, compared with a DKK 492 million cash inflow in Q3 2021. The decline was mainly due to the increases in working capital at BioMar, in particular.
Regarding this, Jens Bjerg Sørensen, President of Schouw & Co., confirmed: “These are strange times – resources like materials, freight capacity, and energy are scarce and in high demand. We understand the importance of working closely with our suppliers and customers, and more than ever, it pays to be adaptable and flexible.”
“Our companies have to a large extent successfully adapted to the challenges presented by global supply chains and soaring costs. All companies have made huge efforts to maintain high production efficiency and to achieve cost compensation in the prevailing situation. I am also very pleased that we continue to enjoy healthy demand across the Group,” added Sørensen.
BioMar grew its reported revenue by no less than 41% even with slightly lower volume sales than last year. Earnings were strongly supported by selling prices. Now much better reflect the sharply higher prices of raw materials, energy, and freight. The share of profit from associates and joint ventures improved, mainly driven by Salmones Austral.
BioMar’s original put option to acquire the outstanding 30% of the shares in Alimentsa S.A. expired in the third quarter of 2022. But the parties have jointly agreed to extend the mutual agreement by five years.
In that connection, the accounting policies have changed to the effect that a non-controlling interest is now included in the distribution of profit and subsequently transferred to equity under non-controlling interests.
The change has not affected the recognition of EBITDA. But an amount of DKK 342 million has been transferred to non-controlling interests under equity. The change was made with a retrospective effect.
During the year, increasing prices of raw materials and developments in foreign exchange rates twice resulted in significant increases in revenue guidance. Also, based on the current outlook, BioMar continues to guide for FY 2022 revenue in the DKK 16.5–17.5 billion range.
“Developing our processes and creating value from data analytics is more important than ever to counteract the inflationary effects on our costs. We have been engaged in creating efficiencies in our supply chain. While working together with our customers designing new solutions for existing and new commercial relationships. We are still not at a normal profit level. But we are moving in the right direction,” commented Carlos Diaz, CEO BioMar Group.
Finally, he concluded: “The world around us is still very volatile. But I strongly believe we will conclude 2022 on a positive note. It has been a year where we despite challenges have managed to expand our business with the world-leading company for intelligent feeding, AQ1. We are progressing with business development plans in different geographies. We are still challenged by lower volumes in some countries and a volatile market for raw materials and energy. But we have seen an impressive ability in our organization and in our commercial relationships to innovate for new ways of doing business and developing products.”
About Schouw & Co.
Schouw & Co. is an industrial conglomerate making long-term investments in leading businesses. It was founded in 1878 and has since 1954 been listed on the Copenhagen Stock Exchange (Nasdaq Copenhagen).
At the parent company, Schouw & Co., we are 13 employees. Through our portfolio companies, we have operations and employees on six continents. Production facilities in 25 countries, and about 7,000 employees around the world.