Dutch food group Nutreco said on Thursday it may cut jobs and shut down a production line at its poultry business in Spain because the economic crisis has led to a drop in demand for meat such as chicken.
At the end of last year, Nutreco had almost 3,200 employees in Spain where it raises and processes chickens for Spanish retailers including supermarket chain Mercadona. It also sells feed for poultry, cows, and pigs.
Investor relations director Jurgen Pullens said it was too early to say how many jobs could be cut. He said Nutreco would not shut down factories, and that the reorganisation would be "limited" in scope.
"It could be in terms of people, possibly shutting down a production line, those kind of changes," he said, adding that Spain was an isolated case.
"If volumes go down - Spain is not an easy market - you try to cope with it in a smart manner."
In a trading update on Thursday, Nutreco said it expected first-half earnings before interest taxes and amortisation (EBITA) and exceptional items of about 90 million euros ($117 million), down 13 percent from a year ago, mainly because of lower demand for its fish feed.
It said fish feed demand fell almost 13 percent in terms of volume in the first quarter, citing low water temperatures which led to slower growth and therefore lower food requirements. But it expects volumes to grow for the full year.
Nutreco reported first-quarter revenue of 1.14 billion euros, up 1.3 percent. Analysts in a Reuters poll had expected quarterly sales of 1.17 billion euros.
Nutreco shares initially fell as much as 6.6 percent to a four-month low but quickly recovered to trade up 0.5 percent at 67.26 euros by 0940 GMT, compared with a 0.28 percent fall of the STOXX Europe 600 Food and Beverages index.
"We consider this to be a buy opportunity," KBC Securities analyst Pascale Weber said in a note.
"Fish feed volumes were down 13 percent in the first quarter but for the full year management expects positive volume growth. We therefore expect a recovery in sales volumes and profitability during the coming quarters."
