- Inghams Group (ING) sales continue to struggle as the COVID-19 Omicron variant spreads across the Eastern States
- Following challenges due to extended lockdowns, ING says the Omicron surge is having an unprecedented impact on its business with a number of products being temporarily suspended
- As the duration of the disruption is unknown, ING believes it is premature to draw any conclusions on the overall effects on the business and trading results
- The company says government changes to isolation rules for close contacts in the food sector should help alleviate some of the current staff shortage
- Shares have dropped 7.37 per cent to trade at $3.27
The rapid spread of the COVID-19 Omicron variant across the Eastern States has further impacted Ingham Group’s (ING) sales, following on from the effects of extended lockdowns.
The company, which indicated late last year that it had been plagued by extended lockdowns in New South Wales, Victoria and Auckland, said it was experiencing unprecedented challenges due to the Omicron surge in Australia.
With COVID cases in Australia passing the one million mark, Inghams said staff shortages were affecting its Australian supply chain, operations, logistics and sales performance, and some of its suppliers and customers.
All the company’s major Australian sites were operational, however a drop in staff availability had dented production volumes and operational efficiency.
Ingham’s CEO and Managing Director Andrew Reeves said the operational and trading difficulties resulted in significant operational inefficiency, additional costs and the temporary suspension of some products.
“Ingham’s is working closely with our customers and we are focused on supplying as much product as possible to customers while the current disruption continues,” he said.
To deal with the impacts, Ingham’s is implementing operational changes to volume and mix across its Australian business.
The company said it was not currently possible to predict how long the disruption would continue and was therefore premature to draw any conclusions on the overall impacts on the business and trading results.
However, Mr Reeves pointed out that the government changes to isolation rules for close contacts in the food sector should help alleviate some of the current staff shortages.
“As operating conditions begin to stabilise, we expect our production capacity to recover relatively quickly to meet customer and consumer demand,” he said.
The company plans to announce its results for the first half of financial year 2022 on February 18, with an accompanying operations and trading performance update.
ING shares were 7.37 per cent lower at $3.27 at 12:22pm AEDT.