Animal genetics company Genus has survived some tough trading conditions in the US market to record an increased operating profit in the six months to 31 December, despite a drop in overall sales.
The interimsshow that the company generated revenue just shy of £135m, compared with £140m in the same period of 2008, with US sales dropping 18% to £43m.
“The majority of the reduction arose from porcine customers in the USA deferring the updating of genetics in their herds due to the agricultural recession,” said a company statement.
“In the bovine sector, where the market reversal was particularly sudden and deep, most customers traded down and this reduced average selling prices.” Semen sales volume fell by 4%.
Despite the challenges in the USA, which accounts for about a third of Genus‘s global business, operating profit actually rose in the six month period – up 7% to £34.3m, before R&D costs are included.
Chief executive Richard Wood said this reflected a particularly strong performance in the European market – where sales were up 3% to almost £62m, and profits were up 19% to £11.8m
“UK farming has performed reasonably well in 2009 helped by the weakness of sterling, and this has helped our genetics business too,” he told Farmers Weekly.
Things were also now looking up in the USA, he added, with dairy farmers moving from a loss making position to one where most were at least breaking even. “The best farmers, who are the ones that use our semen, have returned to profit.”
With 33 bulls in the US top 100, Mr Wood said Genus was well-placed for a more buoyant second half to its financial year.