Chicken producer Ingham's Group still expects the strong growth in poultry volumes it experienced last financial year to ease back to average levels in 2017/18.
Ingham's told investors at its annual general meeting on Tuesday that its outlook is unchanged and implementation of its business strategy remains on track.
The company says feed prices continue to rise but much of the increase can be passed on.
"We have continued to make progress on extending key customers' contractual coverage, with more than 60 per cent of our chicken volumes now subject to agreements that include feed cost pass-through mechanisms and other cost adjustments," chairman Peter Bush said.
Ingham's also reiterated that improvements in its New Zealand business in the second half of the prior financial year had continued into the current year.
The company expects that the benefits from its business improvement program, dubbed Project Accelerate, will underpin cost cuts and profit growth, and help offset increases in electricity costs.
Further asset sales, expected under the Accelerate strategy, will support debt reduction and help offset any ongoing restructuring costs, it said.
Ingham's is also reviewing its commercial stockfeed business.
In an update on its operational expansion in Western Australia, which will require relocating from existing facilities at Wanneroo in northern Perth, Ingham's said it had contracted to sell the Wanneroo site for $54 million, with settlement due in December 2017.
The sale is expected to generate an $11 million profit.
Ingham's plans to build a new feed mill at Muchea outside of Perth by 2020, and develop a new hatchery at a site yet to be finalised.
It will lease the Wanneroo site until the new facilities start operation.
Ingham's, which listed on the share market in November 2016, delivered a full-year net profit of $59.1 million in 2016/17, ahead of its forecast, with a boost from strong chicken sales to supermarkets and restaurants.
The company's shares dropped 14 cents, or 3.8 per cent, to $3.55 on Tuesday.
