Danish ingredients maker Chr Hansen on Wednesday announced a big increase in second quarter revenue, reassuring investors that its weak first quarter was just a one-off event and sending its shares 7.3 percent higher.
The company grew revenue by 10 percent organically in the quarter to end-February, with the strongest contribution from bacteria cultures and enzymes, which are used in cheese, yoghurt, beer and other foods and beverages.
Revenue growth in the first quarter to end-November was 1 percent on the same basis.
"Second quarter was strong for us," chief financial officer Klaus Pedersen told Reuters. "We are growing significantly faster than the markets of our customers, the food producers, and it shows that we have good momentum in our innovation."
Its sales of natural food colours grew by 8 percent organically, missing a 10 percent target, but Pedersen said he expected growth in China and the United States to pick up.
When the company reported for its first quarter on January 15 the shares, which are normally quite stable, fell 4.8 percent.
"Investors were nervous that this quarter would not show a major turn-around compared to the first quarter, but it did," Alm. Brand analyst Michael Friis Jorgensen said. "The Q2 numbers show that the management has executed really strongly".
Earnings before interest and tax (EBIT) before special items rose to 41.6 million euros ($57.4 million) in the quarter against a forecast of 44.2 in a Reuters poll..
The company's EBIT was 32.6 million euros in the same quarter last year, dented by one-offs.
The company, whose closest peers are Archer Daniels Midland and Kerry Group, continues to expect organic growth of 7-9 percent and an operating margin above 26 percent for the full year.
