French veterinary pharmaceutical firm Virbac (VIRB.PA) reported a jump in first-half earnings on Monday but trimmed its 2016 revenue growth forecasts due to difficulties in the United States and Chile, as well as a negative currency impact.
The company, which sells medicines for animals in more than 100 countries, is now aiming for organic revenue growth of 4.5-6.5 percent in 2016 compared with a previous target of 7 percent, it said in a statement.
Its revised outlook comes as a result of increased competition faced by Sentinel, its anti-parasite medicine for dogs, in the United States, the strength of the euro and a sanitary crisis affecting fish in Chile.
"Production in Chile fell sharply this year, 25 percent less production of salmon compared to the average of the previous four years," the chairman of Virbac's management board, Éric Marée, said during a call with journalists. "There were algae that developed because the temperature of the water was too high ... and on top of that there was an infection by a bacteria."
The company's adjusted current operating profit rose 44.8 percent to 39.7 million euros ($44 mln) in the first half, helped by an improved performance by its U.S. subsidiary.
Virbac's 2015 results were severely affected by an interruption of operations at its St. Louis manufacturing facility following an inspection by the FDA (Food and Drug Administration) at the end of 2014.
A follow-up inspection took place from Aug. 9 to Sept. 7, 2016 and the FDA has provided Virbac with a report containing five observations, the company said in a statement.
However, Virbac said it had not received any information on whether the warning letter it received in December 2015 still applied.
Marée said production at the St. Louis plant was back to normal, but if the warning was not lifted the company would not be able to register new products, the effects of which would be felt from 2018.
($1 = 0.8950 euros)
(Reporting by Alan Charlish and Camille Raynaud; editing by David Clarke and Susan Fenton)