Dutch feed giant ForFarmers has blamed a “difficult and turbulent year” for a huge 69.8% drop in net profits.
The company, which bought British feed firm BOCM Pauls in 2012, posted a €17.7m (£15.6m) profit for the 2019 financial year, down from €58.6m (£52m) the year before.
Chief executive Yoram Knoop blamed the high costs of feed ingredients in the first half of 2019, which the company then failed to pass on to its customers.
“It was a difficult and turbulent year for us.
“An unfavourable purchasing position meant the first half of 2019 was severely put under pressure.
“We have since further tightened our purchasing procedure to minimise the chance of such a risk recurring,” Mr Knoop said.
The company fared better in the second half of 2019 despite a further like-for-like total feed volume production decline of about 4% to 10.1m tonnes.
“This was caused by challenging market circumstances in all countries except for Poland,” he said.
Among other things, the volume decline was down to the implementation of efficiency plans, which saw the closure of five mills.
The closures are part of a €10m (£8.9m) cost-savings programme to be completed by 2021.
Mr Knoop said the move would put the business on a stronger footing.
But he expressed concerns over the future of the feed market due to environmental pressures and animal disease threats such as avian flu and African swine fever.
“We see market circumstances in which we operate changing rapidly.
“This is mainly the case in our home market, the Netherlands, where the political debate over the necessity to reduce nitrogen emissions, is creating an uncertain outlook for livestock farming.
“Although the government declared that it was not a goal in itself to reduce livestock numbers, it has become clear that the proposed measures will, in due course, definitely lead to a small decline in animal numbers,” he said.
The company’s share price was €5.02 in interday trading at the time of going to press, down from €7.42 a year ago.