Australia's Inghams Group drops most in nearly 4 years on inflationary headwinds

Inghams

16/02/2024 05:12

Feb 16 (Reuters) - Shares in Australia's Inghams Group
 ING.AX  were set for their worst day in nearly four years on
Friday, after the poultry producer flagged inflationary
headwinds and rising costs despite posting strong half-year
profit. 
    The stock tanked 12.7% to A$3.77, its biggest intraday drop
since March 2020, while also hitting its lowest level since Nov.
29. 
    Although inflation has moderated in recent times, it is
still running above the Reserve Bank of Australia's target
range. The company flagged inflationary headwinds from rising
costs of feed, labour as well as energy and fuel, impacting its
performance in the second half of fiscal 2024. 
    The pricing of key feed ingredients has stabilized in recent
months, however Australian wheat pricing is adjusting at a
slower rate than international pricing, the company said. 
    The company earlier flagged that it expected profit in the
second half to be lower than the first half ended Dec 23., 2023.
 
    Market conditions for consumers over the second half are
expected to be challenging, Inghams said. 
    However, it said that combined effect of income tax relief
and a modest slowing in the overall rate of inflation might
provide some benefit during fiscal 2025 for consumers. 
    The company posted net profit after tax of A$63.4 million 
($41.29 million) for the first half, a more than three-fold jump
from A$17.2 million last year. 
    Inghams also declared a fully-franked interim dividend of 12
Australian cents per share, up from 10 Australian cents declared
for fiscal 2023. 

($1 = 1.5356 Australian dollars)

 (Reporting by John Biju in Bengaluru; Editing by Rashmi Aich)
 ((John.Biju@thomsonreuters.com;))