The year 2009 was an extremely bad year for revenue in the primary agriculture
and in particular for milk production. FirstFarms is also strongly influenced by
this development. In the fourth quarter, the result has been negatively
influenced by the ongoing bad pricing, down-scaling of biological assets and
also the effect of the bad growth season for the fodder production, both
quantitative and qualitative.
· As a consequence of the bad growth conditions, the production of fodder has in
the autumn been 25 percent below the expectations. The value of the fodder has
furthermore been reduced with 19 percent due to low prices and a lower fodder
value than expected. The biological value of the multi-annual alfalfa fields
have also been depreciated as an effect of the low valuation. The total negative
effect of these conditions is DKK 11 million compared to the expectations.
· Due to a delay in approval of a new stable section and the hard winter
weather, the insertion of 550 cows was delayed from the end of November 2009 to
the beginning of 2010, which has entailed a lower earning of milk. At the same
time, an expected increase in December in the milk price failed to happen. The
negative effect of these conditions is a lesser revenue of DKK 3 million
compared to the expectations.
· Regardless of the increases in the milk prices, which were realised in the
early autumn, the market value of cattle has continued to decrease. The company
expected an increase in the stock value of DKK 3 million in Q4, but the price
movement has entailed that the stock has been depreciated with DKK 1 million
instead. The total effect is therefore DKK 4 million less in stock value than
expected.
· The final closing and completion statement of the land sale in Romania, as
informed in company announcement 13/2009, gave a lower profit. This, in
combination with a little higher cost, has a negative effect of DKK 4 million.
· With the mentioned conditions, FirstFarms adjusts the previously announced
expectations to the results in the Q3-report downwards with DKK 22 million to a
turnover of DKK 73-75 million, and EBIT result of DKK -33 to -35 million and a
pre-tax result of DKK -39 to -41 million.
The Board of Directors considers the expected result very dissatisfactory.
Billund, 18 February 2010
Best regards,
FirstFarms A/S
For further information:
Please visit our website www.firstfarms.com <http://www.firstfarms.com/> or
contact the Chairman
of the Board of Directors, Mr. Henrik Hougaard on telephone +45 40 53 62 48.
[HUG#1386129]
