(Alliance News) - Kerry Group PLC on Thursday warned its annual earnings will land at the lower end of expectations, as it grapples with tricky market conditions in its Dairy Ireland arm.

The Tralee, Ireland-based firm announced a share buyback programme of EUR300 million, however.

The food ingredients maker said group volumes in the third-quarter of 2023 increased 0.1% on-year. In its Taste & Nutrition arm alone, they rose 1.6%.

Year-to-date, pricing has risen 1.3% annually, though Kerry warned its third-quarter pricing outturn reflected a "deflationary environment".

Pricing in the Dairy Ireland unit alone was 18% lower annually in the third-quarter. Dairy Ireland provides dairy ingredients, as well as consumer products.

Chief Executive Officer Edmond Scanlon said: "We delivered a good overall performance in the period recognising varying conditions across our markets. North America saw good improvement through the third quarter, Europe performed in line with expectations while APMEA continued to deliver strong growth. Our unique positioning in foodservice supported our continued strong growth in the channel.

"Taste and Nutrition remains strongly positioned for volume growth and margin expansion while recognising current market conditions, however, Dairy Ireland performance continues to be impacted by challenging industry dynamics."

Kerry expects constant currency adjusted earnings growth to be at the lower end of a 1% to 5% guidance range.

The company said it will kick off a EUR300 million share buyback at the beginning of next month.

"The buyback is underpinned by the group's strong balance sheet and cash flow," it added.

By Eric Cunha, Alliance News news editor

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