(Alliance News) - ECO Animal Health Group PLC on Monday said it expects its earnings to come in sharply below forecasts in both the first half of its financial year and the full year, due to African swine fever.
The stock was trading 35% lower on Monday in London at 232.00 pence a share.
The pharmaceutical company said African swine fever has continued to hurt its trading performance in China. Further, the China-US trade tensions have exacerbated the effect, ECO Animal said, due to the US swine producers having limited ability to capitalise on the anticipated export market created by the pork shortage in China, leading to overproduction and depressed prices and margins in the US.
As a result, ECO Animal said it expects its sales in China for the six months to the end of September to decline by 60% compared to a year prior.
Overall, the company said its trading results for the first half will be below those achieved last year, with trading performance "significantly" below current market forecasts for the full financial year to the end of March.
More positively, ECO Animal said, outside of China, Brazil and Mexico and India, it has traded ahead of expectations due in part to continuing market penetration and market share gains.
Looking ahead, the company said it sees "some encouragement" for the second half of its current financial year with a reported reduction in the rate of new African swine fever outbreaks in China and an indication of some restocking of pig herds in some producers.
"African swine fever continues to have a major impact on our business in China, but I am pleased with the progress we are making in other territories which goes some way to mitigating this," said Chief Executive Marc Loomes.
ECO Animal also said it has appointed Andy Jones as permanent chair with immediate effect. This follows the three months during which Jones was the company's interim chair. The company said it now intends to focus its search on appointment of a further independent non-executive director.
Loomes added: "I am delighted that Andy Jones has agreed to become permanent chair and we look forward to expanding the expertise management can tap into through the appointment of an additional independent non-executive director in due course."
By Evelina Grecenko; email@example.com
Copyright 2019 Alliance News Limited. All Rights Reserved.