VikingGenetics’ recently released annual report show a negative EBIT of EUR 9.7 million after an eventful 2021 financial year. On the surface, this financial performance is disappointing. However, the result is a consequence of a series of strategic decisions made by the Board of Directors, and the changes will result in improved sustainable dairy farming and improved long-term results in the company.
The 2021 financial year challenged VikingGenetics in many ways. The planned Arcowin intent to merge and later decision to end this required significant internal resources, and coronavirus restrictions reduced the number of customer visits, affecting overall export sales.
While recent earnings before interest and tax (EBIT) figures show a loss of EUR 9.7 million for the 2021 financial year, the reasons for this financial performance aren’t strictly down to the challenges mentioned above.
Over the past 12 months, VikingGenetics’ board of directors has made several strategic decisions to benefit the company’s entire operations in the long-term, first making fundamental changes to its trading model with three owner cooperatives: FABA, Växa, and VikingDanmark.
- We specifically removed breeding work as an element included in our product calculations, thereby reducing the value of our inventory, and switching to invoicing our doses on delivery rather than on consignment, explains CFO and Interim CEO, Brian Lang, continuing:
- These changes aim to achieve a sharper, more transparent follow-up on contribution margin, thus supporting the creation of longer-term value. They also seek to generate significant efficiency gains and produce robust incentive structures around dose wastage. We believe VikingGenetics is better prepared for the future and the potential cooperation opportunities”.
Revenue increases and other reasons to celebrate
VikingGenetics experienced revenue increases from EUR 33.4 million to 34.4 million, primarily driven by its transition to sex-sorted doses, which continue to see strong growth, particularly in the Danish market. The company also remains a well-consolidated company, with a solvency ratio of over 90%.
The board of directors invested in additional Cattle Feed Intake System (CFIT) farm installations in 2021 beyond the budget, bringing it up to 19 commercials farms with Holstein, Jersey, and Red dairy Cattle. These 19 farms have 7,000 cows and 1,300,000 daily intake records on cows to be included in the Saved Feed Index calculations. The patented system monitors the feed intake of individual cows by 3D cameras in these 19 commercial farms. This Saved Feed Index based on the data from CFIT will cut the use of feed used worldwide and achieve commensurate reductions in greenhouse gas emissions.
- We have made some important investments for the future, and we can still be proud of these current results and everything else we’ve achieved. We want to take this opportunity to thank our dedicated employees for their efforts over the past 12 months. You have lots to be proud about, says Chairperson of the Board, Per-Johan Svensson.
For further information:
Brian Lang, Interim CEO VikingGenetics, brlan@vikinggenetics.com, mobile +45 6142 2009
Per-Johan Svensson, Per-Johan.Svensson@vxa.se, mobile: +46 (0)70-551 52 87