(Alliance News) - Shares in Genus PLC sank 14% on Wednesday after the firm reported difficulties in the Chinese pig market.
The FTSE 250 company, which sells products made using biotechnology to cattle and pig farmers, said the volumes from its pigs business in China were lower in the four months to October 31 compared to the year before, due to a downturn in the market in China and significant volatility.
With live pig prices in China halving in early October before partially recovering, producers have been unprofitable and therefore have reduced their herds by postponing stocking orders. "We anticipate this inventory will need to be replaced when the market recovers," Genus said.
In the meantime, Genus said full-year pretax profit for financial 2022 will be "moderately lower" than its previous expectation. Genus posted a pretax profit for financial year 2021 of GBP55.8 million.
Shares in Genus were down 14% at 4,518.00 pence in London on Wednesday morning.
Despite some challenges, for September, Genus said its bovine and porcine businesses outside China made progress and met profit expectations.
"Whilst pig prices have improved in China in the past month, prices need to improve further and be sustained for producer confidence to return and lead to improved demand for porcine genetics. Looking to financial year 2023, the group remains positive as to the medium-term growth prospects of [Pig Improvement Co] China and is continuing to invest in the local supply chain to be well positioned to capture this growth opportunity," Genus said.
By Will Paige; willpaige@alliancenews.com
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Genus (GNS)