Russia's Ban on EU Pork, Weak Demand Hit HKScan's Prospects18 June 2014
FINLAND - Finnish-based meat processor, HKScan, has adjusted its full-year outlook as its operating profit is now below previous expectations.
HKScan Group has continued to face a tough business environment throughout the second quarter, particularly in the retail sector. Consumer demand for meat and meat products has not picked up as expected and thereby, sales volumes and prices remain lower than forecast.
Profit trend has been weaker than anticipated, especially in Finland. The challenges have been exacerbated by Russia’s ban on pork imports from the EU, which has had both direct and indirect impacts on the Group’s profitability.
HKScan expects its full-year operating profit (EBIT) margin excluding non-recurring items, to be 0.5 to 1.0 per cent. Performance in the last quarter is anticipated to be the strongest. HKScan’s earlier forecast for its operating profit (EBIT) margin excluding non-recurring items was one to two per cent. In 2013, the corresponding figure was 0.5 per cent.
However, the full-year reported operating profit including non-recurring items is estimated to be significantly higher as a result of the sale of HKScan’s shares in Saturn Nordic Holding AB. The financial impact of the transaction is reported as part of the HKScan Group’s interim report for January-June 2014, which will be published on 6 August 2014.
HKScan will continue to intensify its profit development programmes and speed up strategic work to invest in the development of its brand offering and production facilities and technologies.
TheMeatSite News Desk