Phibro (PAHC): Animal Health Grows Despite Currency Woes

Phibro Animal Health Corporation PAHC – a leading global diversified animal health and mineral nutrition company. The company provides a broad range of products for food animals including poultry, swine, beef and dairy cattle and aquaculture.

Phibro ended the second quarter of fiscal 2016 on a mixed note. While the company’s bottom line lagged the Zacks Consensus Estimate by a formidable margin, the year-over-year growth was maintained.

On the revenue front, growth was sluggish at 1.6%, particularly because of an unimpressive international performance. According to Phibro, in the second fiscal quarter, the company witnessed tough currency challenges in its Animal Health segment, particularly in the dairy market.

Moreover, significant customer consolidations are expected to consequently ramp up the product pricing pressures that Phibro’s business faces. Phibro also faces competition from generic alternatives of some of its products that may weigh on its future financial health and operational performance.

However, Phibro is advancing well with its Animal Health product portfolio. We are encouraged to note that, Phibro as a leading provider of Medicated Feed Additives (MFA) products, has the potential to best capture the huge and growing animal health market worldwide.   

Currently, the company is focused on expanding its footprint in the poultry, swine and cattle industries in both the domestic and international markets. The complementary nature of its animal health and mineral nutrition portfolio provides Phibro with unique cross-selling opportunities that can help it reach out to new customers or strengthen relationships with existing ones.

Moreover, the company has been expanding its share in many significant emerging markets for quite some time now. Of late, the company has ramped up penetration of some of its specialties in the dairy industry in the markets of Latin and South America. Currently, the company is expanding its dairy business in the markets of Australia, Brazil and Mexico. Further, the company’s distribution rights deal with MJ Biologics is expected to expand Phibro’s business in and out of North America.