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Chr Hansen profits up despite Eurozone slowdown

By Shane Starling , 31-Oct-2012
Last updated on 16-Jan-2013 at 09:21 GMT

Chr Hansen profits up despite eurozone slowdown

Shares jumped more than 3% to just over €24.05 this morning in Danish enzymes, colours and cultures company Chr Hansen as its yearly revenue hit €699m. Profits improved 10.7% to €131.3m for the 12 month period ended August 31.

The strong figures came despite a financially strapped Eurozone where the company does over half its business, as demand surged in natural food ingredients, and 15+% growth in emerging markets continued.

A strong natural colours market, stabilising prices for red colour carmine, and a strong Q4 boosted the figures, said chief executive officer Lars Frederiksen. But despite the good numbers, forecasts were moderate for the coming financial year at around 8-10%.

Regionally, organic growth was 4% in Europe, 17% in North America, 26% in South America and 10% in Asia-Africa.

Cultures and Enzymes grew 10% to €419.8m in revenue; Natural Colors 2% to €171.6m and Health and Nutrition 13% to €107.3m.

Currency projections are neutral and the company expected the global natural colours sector market to show more growth as natural colours embedded in standards and formulations.

It said red colour carmine would benefit from stabilising at around $20-$25 per kilogram to maintain supply and keep farmers interested in the beetle-sourced material.

It has been as high as $120 a kilogram about 12 months ago.

The company committed to spending about 7% or revenues in research and development, which Frederiksen said was a level high enough to, “stimulate scientific and financial results”.

Claims

Chr Hansen wrote off €4m after an immunity trial for its probiotic strains delivered inconclusive results.

“We are not giving up on immunity,” Frederiksen told us. “We remain committed to the field and selling documented products. But the trial delivered insufficient documentation to attain an EU health claim so there has been a €4m impairment there.”

“It confirmed a reduction in colds but not the mechanism of action.”

Two other gastrointestinal trials underway which would inform further courses of action.

“Probiotic cultures used in fermented milk products have been negatively  affected by the continued uncertainty surrounding the EU process for approval of health claims during the last two years,” the company said.

But it still saw a rise in sales in these products.

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