Eco Animal Health Group plc (LON:EAH) has issued a positive update on Group trading and the impact of a strong Chinese market on the business:
· Group revenue and EBITDA for the year ending 31 March 2021 to be significantly ahead of market expectations and the prior year
· Continuing strength in the Chinese market despite localised outbreaks of ASF
· Restocking of the pig herd continues with total China hog herd numbers reported to be 350-380 million head compared with 250 million head in 2019 and 430 million head pre-ASF in 2018*
· Pork commodity price in China remains high
· Record Chinese revenues continue
· Strong performance in other territories in particular the USA
* Source: MARA/Rabobank
In January, the Group provided a revenue update and indicated that the revenue for the first nine months was ahead of management expectations and the prior year with continuing strength seen in the Chinese and US markets. February is traditionally a low revenue month in China, associated with the Chinese New Year Festival and national holidays. Notwithstanding the traditional national shut down, in February 2021 the demand for the Group’s products in China resulted in an unusually high continuation of production throughout the month.
The Board is pleased to confirm that initial February revenue reports indicate that the recent strong trading trends have continued. With one month remaining in the current financial year and a continuation of strong revenue results in China, elsewhere in the world and in particular the USA, the Board believes that revenue for the year ending 31 March 2021 will significantly exceed market expectations.
It is expected that the consolidated Group EBITDA for the year ending 31 March 2021 will also be significantly ahead of market expectations and the prior year.
Marc Loomes, CEO said:
“We are delighted that we will be trading ahead of market expectations and the current momentum that we are seeing in China with record revenues reflects the increasing demand for the Group’s flagship Aivlosin® product line. We believe that our customers appreciate the superior performance of the Group’s products and we should not overlook the solid growth being experienced in most of the other geographical markets that ECO addresses. We remain appreciative that our staff, customers and all stakeholders are supportive and aligned in our future ambition.”
