Danisco raises EBIT estimate after strong first quarter

by Jeff Gelski
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COPENHAGEN, DENMARK — Danisco posted revenue growth of 7% and EBIT growth of 27% for the first quarter ended July 31, which prompted the company to raise its guidance for the fiscal year.

Group EBIT came in at DKK524 million ($104 million), or DKK6.42 per share, up from DKK412 million ($82 million), or DKK5.60 per share, in the previous year’s first quarter. Enablers and Genencor both contributed to the higher margins, according to Danisco.

First-quarter revenue of DKK3,449 million ($683 million) compared to DKK3,235 million ($641 million) in the previous year’s first quarter. Revenue grew 2% organically, 2% through acquisitions and 3% through positive currency movements.

Danisco raised its EBIT estimate for the year to slightly under DKK1,400 million, up from about DKK1,300 million. Profit for the Group is estimated at slightly above DKK700 million, up from about DKK650 million. Revenue outlook for the year remains unchanged at DKK13,500 million.

"We are encouraged by the positive start to the year, not least in view of the still challenging and volatile market environment," said Tom Knutzen, chief executive officer of the Copenhagen-based company, when first-quarter results were announced Sept. 17. "Internal cost containment and positive momentum for several of our products are starting to bear fruit, and we are satisfied that we are able to lift our outlook for the full year."

In Enablers, which encompasses emulsifiers, gums and systems activities, in the first quarter, revenue was DKK1,447 million, up from DKK1,390 million, and EBIT was DKK257 million, up from DKK192 million. On Nov. 1, the Emulsifiers and Gums & Systems divisions will merge into one Enablers organization.

In Cultures in the first quarter, revenue was DKK537 million, up from DKK476 million with almost all the growth being organic. First-quarter EBIT was DKK107 million, up from DKK 98 million.

In Sweeteners in the first quarter, revenue fell to DKK376 million from DKK408 million and EBIT dropped to DKK9 million form DKK46 million. Weakness in xylitol drove the declines even though Litesse polydextrose continued its strong performance.

In Genencor in the first quarter, revenue rose to DKK1,104 million from DKK966 million and EBIT increased to DKK190 million from DKK112 million. Enzyme sales into the bioethanol industry continued to rise at double-digit organic growth rates across all major geographies.

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