Australia’s food supply secure amid virus

The group delivered low single-digit percentage volume and revenue growth in 1Q2020 compared to 1Q2019, driven primarily by its Indonesian business.

Earnings however were down by mid-teens percentage for the quarter on the prior corresponding period.

The company said this reflected the impact of the bushfires in January and February, planned additional marketing expenditure in Indonesia and margin erosion as a result of changes in channel mix in March when social distancing restrictions were introduced.

Ms Watkins said in March 2020 the group experienced mid single-digit percentage volume growth versus March 2019 as consumers engaged in stockpiling.

Earnings, however, was down by low single-digit percentage compared to March 2019 due to the pronounced channel shift to grocery across our markets, she said.

“The first two weeks of April have included the lead up to Easter and Ramadan which are significant trading periods for our businesses,” Ms Watkins said.

“This period has been adversely impacted by the COVID-19 and government measures with many customers closed or in decline, and people staying at home across all of our markets.

“As a result, our volumes have reduced by approximately 30 per cent on the prior corresponding period, with Indonesia down close to 50 per cent and Australia down approximately 15 per cent.”

Ms Watkins also said the group’s strong balance sheet, liquidity and “solid” credit ratings meant it was in a strong position financially and operationally to trade through the pandemic.

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