Bloomberg News

Nutreco Seeks Acquisitions as Second-Half Net Drops (Update2)

February 15, 2007

Nutreco Holding NV (NUO), the world's biggest salmon-feed producer, said it's in talks to buy companies that would increase sales by almost half after six- month profit fell for the first time in more than two years.

The takeover candidates together would add about 1.3 billion euros ($1.7 billion) to revenue, Nutreco said today in a statement, without naming the targets. Sales reached 3 billion euros last year.

Nutreco plans to use the proceeds from last year's sale of a salmon farmer to fund the acquisitions. The company has sold Marine Harvest and other units to focus on animal feed, which it judges to have more stable prices. The animal-nutrition market is worth 150 billion euros a year, with Nutreco's share 2.5 billion euros.

The market is ``very fragmented, giving us lots of opportunities,'' Chief Executive Officer Wout Dekker said at a press conference in Amsterdam. It may surge ``four- to fivefold'' within the next 20 years, he forecast, as the world population grows, and as people earn more money and eat more meat and fish.

Second-half net income dropped 18 percent to 84.1 million euros, or 2.43 euros a share, from 102.2 million euros, or 2.96 euros, a year earlier. The figures were calculated by Bloomberg by deducting first-half numbers from full-year results published today. Chief Financial Officer Cees van Rijn confirmed the numbers. Profit fell after Nutreco sold its stake in Marine Harvest in March.

On the Rise

``We're aiming to double sales of our fish-feed unit in the next 10 years,'' Dekker said in an interview. Nutreco is mainly looking to expand in China, India and Russia because ``the amount of animals being held there is growing fast, and consumer demand for fish and meat is on the rise,'' he said.

Global seafood consumption will double in a decade, while meat consumption will grow by the same amount in 25 years, Nutreco estimates.

Shares of Nutreco fell 15 cents, or 0.3 percent, to close at 52.85 euros in Amsterdam. They have gained 7 percent this year, while the 118-member Bloomberg World Food Index has increased 4.6 percent.

The takeovers ``can be easily funded,'' Paul Hofman, an analyst with F. van Lanschot Bankiers in Den Bosch, Netherlands, wrote today said in a e-mailed note. Nutreco has a ``war chest'' of 1 billion euros, said Hofman, who has a ``buy'' recommendation on the shares.

Nutreco made 380.2 million euros from the sale of its 75 percent stake in Marine Harvest, Van Rijn said in a telephone interview.

Full-year profit rose to 519.5 million euros from 134.4 million euros. Sales from continuing operations gained 8.5 percent to 3 billion euros.

To contact the reporter on this story: Danielle Rossingh in London at

To contact the editor responsible for this story: Justin Carrigan at

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