APF Holdings (hereinafter referred to as APF or the Group), which includes one of the largest egg producers in the Baltics, SIA Alūksnes putnu ferma, increased its volume of cage-free eggs by 51% in the first six months of this year year-on-year. The share of cage-free eggs in total production has grown from 49% in the first half of last year to 80% this year, which is strategically important given the growing market demand for cage-free eggs.
In the first six months, 48 million eggs were sold, which is 7% less than in the corresponding period last year, when 51.9 million eggs were sold. The decrease was mainly influenced by the replacement of the laying hen flock at one of the facilities, a routine and planned event in poultry farming, as well as a significant increase in egg imports produced in Ukraine.
In the first half of 2024, APF increased its egg export volume by 11%, reaching 43% of total egg sales. This growth is directly linked to APF's goal of developing new markets and expanding its network of partners outside Latvia, with a particular focus on the Baltic region.
Due to the reduction in egg production caused by the replacement of the laying hen flock, APF's turnover in the first six months of this year was 5.907 million euros, down from 6.988 million euros in the first half of 2023. Considering the high investments and lower production volume, as well as the record increase in egg imports from third countries that do not meet EU standards, the financial result of APF in the first half of this year was a loss of 476 thousand euros in the first six months of 2024.
"Following last year's initial public offering (IPO), when we emphasized our goal of becoming a significant producer and exporter of cage-free eggs in the region, in the first half of this year we focused on both adapting production to our strategy and rapidly expanding our operations. We are working simultaneously in different directions—increasing the volume of cage-free egg production where we anticipate growing demand, investing in new poultry facilities, developing new egg products, transforming APF into an environmentally friendly and sustainable company, and establishing new partnerships with trade partners. This is a substantial effort, and the results demonstrate that we are strategically progressing towards achieving our goals," says Jurijs Adamovičs, Chairman of the Board of AS APF Holdings.
New Partnerships with Retail Chains
In the first half of 2024, APF significantly expanded its market presence by forming new strategic partnerships in the Baltic States. The company successfully initiated collaborations with several new large retailers, including SKY, Maxima (Latvia, Estonia, Lithuania), and LIDL (Lithuania). In addition, APF signed a contract with Prisma (Estonia), effective from July 15th of this year. APF has also started cooperation with well-known and popular Latvian food producers, such as Lāči, and the modern HoReCa sector representative, the Ezītis miglā restaurant chain. Moreover, we have started collaboration with Maxima Latvia's culinary department after their announcement to transition from cage eggs to using only cage-free eggs.
Strategic Investments in Development According to IPO Plans
In the first half of this year, APF continued to implement its development plans announced during the company's IPO last year. On May 22nd of this year, APF signed a cooperation agreement with the construction company SIA Aimasa for the construction of two new poultry facilities. The total construction cost will be 2.728 million euros, which is 30% of the total investment allocated for this project.
The land preparation work has been completed, and construction has begun. The first facility will be commissioned by the end of this year, and the second in April next year. The total area of the new facilities will be approximately 4,700 m², increasing APF's egg production by 73 million eggs per year, reaching a total of 180 million eggs annually. These poultry facilities will be among the most modern in Europe, allowing APF to offer cage-free eggs both in the Baltics and export markets.
This investment will significantly increase production capacity and strengthen APF's position as a modern and sustainable producer.
Furthermore, in May, APF signed a significant contract with Big Dutchman, a leading agricultural equipment manufacturer, to equip both new laying hen facilities. The investment in new equipment will be 4 million euros. The equipment will be installed in parallel with the construction of the two laying hen facilities, overseen by SIA Aimasa. Big Dutchman will provide APF with modern aviary systems for cage-free housing, manure collection systems, automated egg counting solutions, and climate control technologies to improve the welfare of the laying hens. Furthermore, APF will be the first in the Baltics to use emission reduction solutions, significantly reducing its environmental impact.
APF Continues to Develop Operations Based on Circular Economy Principles
APF Group is steadily moving towards fully circular economy-based operations, ensuring sustainably produced eggs and egg products for consumers that meet the latest consumption trends.
As of July 1st, APF has fully transitioned to the use of renewable energy for its operations. APF has signed an electricity supply agreement with SIA Ignitis Latvia, which provides for the purchase of electricity only from renewable resources. Currently, APF has also started using its solar park, which successfully began energy production after tests in the spring. The full commissioning of the solar park is planned for October, covering the warehouse building and egg processing plant. The solar park's capacity is 250 kWp, supported by 384 solar panels. During the summer months, this park provides all the electricity for APF's poultry facilities, which is about 25% of the company's total electricity consumption annually. The total investment in the solar energy park exceeds 240,000 euros, and the project is being implemented in cooperation with SIA Ignitis Latvia. Additionally, in February 2024, APF reaffirmed its adherence to energy management standards by receiving the international energy management standard ISO 50001.
APF Holdings (NASDAQ: EGG) is a dynamic group of companies engaged in poultry farming, chicken egg production and trading, as well as gas and organic fertilizer production related to poultry farming processes. Our portfolio includes SIA Alūksnes putnu ferma (poultry farming and egg production), SIA APF Trading (wholesale trade in chicken eggs), SIA Oluksne (providing poultry farming and egg production services), SIA APF Energy (gas and organic fertilizer production), and SIA Preiļu putni (poultry farming and young chicken rearing). Founded in 2017, APF Holdings has become a leading player in the Baltic region's poultry and egg industry