The Glanbia Ingredients facility in Virginia, County Cavan, Ireland.

Glanbia, the Irish foods group, said today in a trading update, that its adjusted earnings per share growth for 2008 should be about 17% - in line with market expectations. The company reported a "good performance" in 2008 with all of its businesses, except its Irish food ingredients unit.

Glanbia said its food ingredients Ireland division was significantly hit by the big decline in world dairy prices and as a result the imbalance between market pricing and raw material costs.

Glanbia says that world dairy markets are increasingly volatile, with prices continuing to decline. "The difficult trading conditions, with lower world dairy demand, reflects the impact of the current global current economic and financial crisis," the company said.

John Moloney, Group Managing Director, commented: "We are very pleased with the Group's delivery of approximately 17% growth in adjusted earnings per share in 2008 in line with market expectations. This represents a good performance given the decline in global dairy markets and weakening consumer sentiment. 2009 is set to be a very challenging year given the severe impact of the ongoing economic and financial turmoil on both developed and emerging economies. In response to this, we continue to critically examine our cost structures including, as previously announced, a €16 million rationalisation programme across our businesses to remain cost competitive. In the context of the current unprecedented financial, dairy market and economic uncertainties we are very cautious at this early stage of the year, however, we remain focused on achieving the market consensus earnings growth for 2009."

Glanbia said its €16m rationalisation programme - which has included job cuts at its milk business and the sell-off of its pigmeats business - continues.

Trading Statement

Goodbody analyst Liam Igoe commented: "Glanbia said this morning that its EPS growth in FY08 would be c.17%, in-line with market expectations (our forecast is 16.4%). Consumer Foods recovered some margin in 2008 due to price increases (which had been deferred from 2007) and rationalisation. Within Ingredients, its’ International businesses performed strongly, benefiting from the inclusion of Optimum Nutrition for the first time. In the Irish food ingredients operations, margins were impacted in H2 by the sharp fall in dairy market prices globally. Overall, Ingredients will perform in-line with 2007, which is lower than we had forecast.

The International Joint Ventures increased its’ profits significantly as a result of an “excellent performance” from Southwest Cheese. The company says that 2009 is “set to be a very challenging year” due to the global economic crisis, its impact on consumers and the continued declines in dairy commodities. It continues to examine means of reducing its costs. For FY09, it remains “focused on achieving market consensus”. Our forecast EPS for FY09 is 39.1c vs. 40c consensus."