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Oatly reports record Q4 revenues despite doubling losses

Published: 15:54 09 Mar 2022 GMT

credit: Maddie Red / Shutterstock
credit: Maddie Red / Shutterstock

Oatly Group (NASDAQ:OTLY) AB ADR advanced 3.1% on impressive revenue growth and a promising outlook for this financial year, despite losses more than doubling.

The plant-based milk maker saw fourth-quarter revenues surge 46% to a record US$186mln on growth across retail and foodservice channels.

Alex Smith, Third Bridge global sector lead for consumer industries said: “The pandemic gave a huge boost to the plant-based milk industry - as consumers explored new grocery products and stocked up on items they could store at home.

“In parallel, many shoppers came to associate plant-based milk with health, rightly or wrongly.  Fast-forward two years and oat milk is now very much on trend with Oatley a main beneficiary.”

The company, which expects its 2022 revenues to be roughly US$900mln, said it’s set “for an increased rate of growth” as macroeconomic obstacles ease in Europe.

Oatly’s oat milk performance at Starbucks exceeded expectations, Reuters reported, while its chief executive Toni Petersson said the company plans to provide 85-90% of the coffee chain’s oat milk this year.

The company is increasing capacity and aims to generate gross profit of 40% in the long term and expects the additional capacity to reduce costs via economies of scale.

This positive outlook comes despite Oatly facing higher raw material and logistics costs last year.

On the contrary, Smith added: “Our experts warn that soaring production costs could dent Oatley’s rise as cost conscious shoppers switch back to lower priced milk alternatives.”

Its Q4 loss before income tax more than doubled to approximately US$85mln due to higher finance costs and depreciation because of three new facilities, the company commented.

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