COPENHAGEN (Reuters) - Shares in food ingredient maker Chr. Hansen (CHRH.CO) dropped 11% to their lowest in 1-1/2 years on Thursday after the company said it expected lower sales growth next year on weak demand particularly in emerging markets.
Chr. Hansen, which has seen its shares drop almost a quarter in value since a sales warning in June, produces enzymes and bacteria for the dairy, wine and meat industries and is one of the top three producers of probiotics for animals.
The company said it expected organic sales growth next year of between 4% and 8%, below its long-term guidance of 8% to 10%. It left its forecast for EBIT margin unchanged at 29.5%.
“We are facing more uncertainty in the coming year and that affects our momentum right now,” Chief Financial Officer Soren Lonning told Reuters after the company reported 2019 profits which were slightly below analysts’ expectations.
Lonning said Chr. Hansen faced weak demand, particularly in emerging markets such as Argentina, the Middle East and China, its largest single emerging market.
“In China, demand on a number of things has gone down. We see slightly lower consumer confidence, we have seen food prices go up,” he added.
Chr. Hansen posted net profit for the financial year ended Aug. 31 of 250.2 million euros ($274.97 million), slightly below an estimate of 253.8 million euros in a Refinitiv poll.
Shares in Chr. Hansen dropped as much as 11% on Tuesday, reaching their lowest level since April last year, before trimming the losses to traded down 9.1% at 0720 GMT.
It reported organic sales growth of 7% for the year, in line with its downward revised outlook from June of organic growth between 7% and 8%.
Reporting by Nikolaj Skydsgaard; Editing by Clarence Fernandez and Emelia Sithole-Matarise