Rise in output in 2016, at low selling prices, however

The domestic sector of poultry is examined in a recent study of Infobank Hellastat S.A. According to Alexis Nikolaidis, Economic Research & Sectorial Studies Senior Analyst, the domestic consumption of poultry appears to be recession-proof, since consumers substitute other categories with poultry meat, which is clearly the cheapest option over time. At the same time, chicken meat is regarded as healthier food compared to pork, beef, and sheep/goat meat. These two parameters translate into high demand levels and domestic production output, as a result.

However, the upward trend of consumption is not fully reflected in the domestic sector, since the production performance of poultry plants showed fluctuations in previous years, due to the burden from the noticeable rise in the price of animal feeds, especially during the two-year period of 2011-2012. This trend caused a decrease in the level of self-sufficiency and led to imports of frozen chicken, especially from Balkan countries, which are sold as Greek products on many occasions.

However, the cost of animal feeds has subsided over the last years, and this, combined with high demand, allowed major companies in the sector to increase their production output. In specific, Eurostat estimates that, in 2017, the domestic production of poultry rose marginally by 0.8% to 214,300 tons, and this quantity translated into 127.4 slaughtered chickens.

However, in spite of the significant production output levels of the sector, many companies face problems resulting from loans that had been taken to fight the birds’ flu in 2006, which still find difficult to repay. Subsequently, as it has already been reported, the crisis in the cereal market led to a sharp increase in the cost of production, while the economic recession over the last six years was followed by a decline in the selling prices.

The above conditions have resulted in increased liabilities for many plants, as well as loss-generating results and shrinking profits, leading several of them to cease operation or be included in the Bankruptcy Code during the previous years.

According to Mr. Nicolas Gouzelos, CEO of Infobank Hellastat, “The consumption of poultry meat during the current period of recession emerges as the most recession-resistant category, since the cheaper price of the products and their image as a healthier nutritional option, make them more appealing to the average consumer. Actually, poultry is used by supermarket chains as a means to attract consumers through frequent offers. Consumers, however, have partly shifted to cheaper chicken imported from third countries, at the expense of Greek production.”

 

Financial analysis

In the study of ΙΒ.HS, the financial statements of 25 meat production companies are analyzed. The key conclusions can be summarized as follows:

  • In 2016, Turnover was formed at €744.1m (+6.7% compared to 2015).
  • EBITDA rose by 17.3%, exceeding €30m. EBT boosted by 22.5%, at €8.31m.
  • The EBITDA margin and the EBT margin rose to 5.8% and 1%, respectively.
  • Leverage improved to 1 over 1.
  • Receivables were collected within a period of 3.5 months.

Furthermore, in the study, the financial statements of 14 egg producing companies are analyzed. The key conclusions can be summarized as follows:

  • In 2016, Turnover fell further by 1.5%, at €81.85m.
  • EBITDA amounted to €6.15m, versus €1.06m in 2015, whereas pre-tax losses improved to €4.22m.
  • The EBITDA margin and the EBT margin increased to 5.6% and 0%, respectively.
  • Leverage deteriorated to 4.5 over 1, remaining at high levels.
  • Receivables were collected within a period of 6 months.

For the full version of the sectoral studies please contact 210 8939017 or email to This email address is being protected from spambots. You need JavaScript enabled to view it. & This email address is being protected from spambots. You need JavaScript enabled to view it..

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