Danish feed group BioMar saw earnings sink 6.3 percent last year as it continued to battle global price increases in raw material, logistics and energy.
The group posted earnings before interest, taxes, depreciation, and amortization (EBITDA) of DKK 911 million (€122.5 million/$133.6 million) in 2021, despite revenue climbing 14 percent to DKK 13.3 billion (€1.8 billion/$2 billion).
BioMar said the improvement in revenue was due to an 8 percent increase in volumes sold compared with 2020, mainly driven by the salmon division and the shrimp business in Latin America.
The company said international commodity markets and supply chains continued to be characterized by instability during the year, which made it difficult to operate as efficiently as it would have liked.
Meanwhile, raw material prices and freight and energy costs increased at a pace not witnessed for years.
“The entire year was marked by challenges in fully offsetting the sharp rise in prices of raw materials and the increase in freight and energy costs,” said BioMar.
Additionally, disruptions to the supply of raw materials resulted in higher recipe costs and increased logistics costs in certain markets.
However, performance strengthened thanks to strong sales in the latter part of the year, resulting in a 3 percent increase in EBITDA to DKK 274 million (€36.8 million/$40.2 million) in the fourth quarter of 2021.
“We along with all other feed producers are challenged by a situation no one has even seen before,” said Carlos Diaz, CEO of BioMar Group.
“Energy prices has been going through the roof, raw material prices have increased significantly, and logistic costs are at level we have never seen.”
Diaz said the company is working with customers to find “sustainable commercial solutions” but will probably need to look into a new generation of contracts in which the volatility of the markets is taken into account.
Currently, the most significant impact of the COVID-19 pandemic is the surge in prices of raw materials and in freight and energy costs and the significant challenges relating to the supply of important raw materials.
"This affects all of BioMar’s markets to varying degrees and puts earnings under pressure, as it is not always possible to fully pass on the increased costs to selling prices," said the company.