Glanbia Falls as Euro Strength, Irish Dairy Drag: Dublin Mover

Glanbia Plc, the Irish dairy and nutritionals producer, declined the most in almost two months after analysts signalled a strengthening euro and a weaker than expected earnings at its Irish business may weigh on earnings.

Glanbia fell as much as 4.4 percent to 9.9 euros in Dublin, its biggest intraday fall since June 24. The Kilkenny, Ireland-based company earns most of its profit outside of Ireland.

“It will be the forex that means the consensus comes down,” said James Targett, a London-based analyst at Berenberg Bank. The euro’s appreciation against the dollar may result in a 1 percentage point drop in analysts’ consensus adjusted earnings per share growth estimates of 8 percent to 9 percent for the full year on a constant currency basis, he said.

Glanbia re-iterated today its full-year earnings per share growth target of 8 percent to 10 percent as it reported a 13 percent increase in revenue in the first half to 1.68 billion euros. Glanbia, which earns more than 70 percent of group EBITA from its global nutrition and ingredients business, recorded a 6.4 percent increase in that measure to 123.9 million euros in the first half.

Glanbia said said earnings before interest, tax and amortization at its Dairy Ireland business fell 24 percent to 12.1 million euros in the first half.

“The fall in the Irish profit was worse than we had forecast,” said Liam Igoe, an analyst at Goodbody Stockbrokers in a note today. Igoe, who has a buy rating on the stock, said he expects to cut his euro-based earnings per share growth estimate for the company.

About 340,000 shares traded in Dublin, the equivalent of 104 percent of average daily volume for the stock during the past three months. The euro has appreciated about 3.1 percent against the dollar since the start of June.

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