Ingham's shares drops as Omicron hits workforce

Ingham's shares drops as Omicron hits workforce

Poultry producer Inghams Group (ASX: ING) has today announced it is facing staff shortages and impacted sales performance as Omicron pecks away at its workforce nationally.

While all of its Australians site remains operational, the company’s production and distribution capabilities have been disrupted due to "significantly lower levels of staff availability".

The company also noted the current COVID-19 outbreak is impacting its logistics operations and some of its suppliers and customers.

Following the announcement, shares in ING have fallen by more than 7 per cent to around $3.28 per share.

“Following the COVID issues we faced in calendar 2021, the recent Omicron surge in Australia has presented unprecedented challenges to Ingham’s Australian business, with many Ingham’s employees being forced to isolate at home due to contracting COVID in the community or as a result of being close contacts,” Inghams Group CEO and managing director Andrew Reeves said.

“We are currently maintaining our Australian processing operations while seeking to ensure the safety and engagement of our employees, many of who are demonstrating outstanding levels of commitment to work through the current challenges.”

Unsure of how long the disruptions will last, Ingham’s said it was premature to draw conclusions on the overall impacts on business and trading results.

The poultry producer's announcement comes after the states of Queensland, Victoria and News South Wales implemented measures which allow close contacts to return to work provided they are asymptomatic in order to reduce the risk of staff shortages in essential industries such as food.

“I would like to acknowledge the recent announcements by both Federal Government and State Governments on changes to isolation rules for close contacts in the food sector which should assist to alleviate some of the current staff shortages," Reeves said.

Despite the ongoing challenges COVID-19 brought in FY21, Ingham’s reported revenue of $2.67 billion, an increase of 4.4 per cent on the year prior ($2.55 billion).

Meanwhile, its statutory NPAT increased by 107.7 per cent, from $40.1 million in FY20 to $83.3 million.

The company expects to release its first-half results for FY22 to market on 18 February.

“As operating conditions begin to stabilise, we expect our production capacity to recover relatively quickly to meet customer and consumer demand," Reeves said.

“We will continue to closely manage our working capital and inventory and seek to implement initiatives to minimise the financial and other impacts of COVID through the second half.”

Updated at 11.11am AEDT on 11 January 2022.

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