April 6, 2017 / 10:00 AM / 6 months ago

UPDATE 1-Chr. Hansen shares drop as Q2 earnings disappoint

(Adds quotes, analyst, share price)

April 6 (Reuters) - Danish food ingredients maker Chr. Hansen posted weaker-than-expected second quarter results on Thursday, sending its shares as much as 5 percent lower and making it the second-worst performer in the FTSEurofirst 300 index.

* The company, which makes enzymes and bacteria for dairy, wine and meat production, maintained its full-year guidance for organic revenue growth of 8-10 percent even though some analysts had expected it to raise the forecast.

* Chr. Hansen has seen prices on basic materials falling in its colour business, impacting its sales prices, Chief Financial Officer Soren Westh Lonning told Reuters in a telephone interview.

* “We have experienced incredibly high growth on the Chinese market, but we expect a slower rate in the future. So we see a revenue growth of 8-10 percent as the best guidance,” Lonning said.

* The company saw growth of 13 percent in the Health and Nutrition sector in the second quarter mainly due to some large U.S. projects, he said.

* “In the United States there is a large focus on finding natural solutions to reduce the use of antibiotics on poultry, and we have been lucky to win a share of this market,” he said.

* Jyske Bank said it expected a guidance upgrade later this year as it still believes the current guidance is somewhat conservative following a strong first half-year (H1) with 10 percent organic growth.

* Sales of bioprotective cultures grew 25 percent in H1 year/year, and there is a huge market for keeping foods fresh for longer, the CFO said, adding that Danish dairy maker Arla had expressed interest in the products.

* Second-quarter revenue rose 13 percent to 259.4 million euros, slightly below the 260 million euros expected by analysts polled by Reuters.

* Second-quarter EBIT before special items rose 10 percent to 70.1 million euros, which was 4 percent below Reuters poll expectations.

* For the 2016/17 financial year Chr. Hansen still expects the EBIT margin to increase slightly compared to the year before and forecasts a free cash flow before acquisitions, divestments and special items of around 175 million euros.

* The share price fell as much as 5.1 percent in early trade, and was down 2.1 percent at 444.3 crowns at 0955 GMT. Source text for Eikon: Link to Reuters POLL: Further company coverage: (Reporting by Julie Astrid Thomsen, editing by Terje Solsvik)

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