UK-based global animal genetics company, Genus, has reported ‘strong performance’ in its preliminary results for the year ending 30 Jun 2020, despite challenge posed by the global pandemic.
Genus reported growth of 11% in PIC, the company’s porcine genetics division, with revenue from royalties rising by 11% due to royalty revenue in China more than doubling as a result of high breeding stock sales, and steady growth being recorded in Latin American and Europe.
The results noted that PIC China secured five new key accounts in the financial year, with the company now service over one third of the top Chinese swine producers.
Genus also acquired Spanish biosecurity and feed additive specialist Sergal in June, expanding its supply chain and sire-line market share in world’s fourth largest pig market.
Stephen Wilson, Genus chief executive, said that the group performed ‘very strongly’ and made ‘significant strategic progress’ in the 2021 fiscal year.
“PIC had success around the world with key accounts as a result of our leading genetics and supply chain,” said Mr Wilson. “The acquisition of Sergal in June 2021 will further strengthen our supply chain and market share in the important Spanish market.
Looking ahead, he said the outlook for the group remains positive and is confident in Genus’ strategy and potential opportunities. He noted, however, that whilst growth occurred across both ABS (the dairy and beef cattle division) and PIC, led in particular by strong growth in PIC China, recent volatility in the Chinese porcine market is expected to continue for some months, creating a short-term headwind in the next financial year, primarily for PIC China.
Despite China’s efforts to rebuild its herd following the African Swine Fever outbreak which decimated the country’s pig herd, Rabobank estimates that inventory still remains below 2018 pre-ASF numbers due to ASF outbreaks in 2020 and 2021.
Prices are expected to remain volatile in the months ahead, reflecting producers’ investments in production capacity coming on stream, seasonal demand trends and the release of inventories of frozen pork accumulated by importers
“As a result of this headwind, and despite an expected strong performance in the other areas of the business, we expect Genus’s growth to be lower than our medium-term goal in the current year before increasing again in FY23,” Mr Wilson added.