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Atria Expects Lower Profits on Higher Sales

30 October 2014

FINLAND - Finnish meat processor Atria Group's net sales for July-September reached €364.4 million compared to €358.4 million a year ago.

Net sales grew by €6.0 million year-on-year.

Consolidated EBIT was €16.2 million compared to a loss of €1.8 million for the same time last year, while EBIT without non-recurring items was €15.6 million (compared to €14.5 million in 3013.

Atria Finland's net sales for July-September totalled €238.5 million compared to €224.8 million in 2013, up by €13.7 million year-on-year.

This increase was due to the consolidation of the operations acquired from Saarioinen and the increase in poultry feed sales.

Summer barbecue season sales were a success despite fierce price competition.

The €11.8 million EBIT compared to last year’s €9.8 million was €2.0 million higher than the EBIT for the corresponding period last year.

EBIT includes a non-recurring sales profit of €0.6 million for the sale of real estate company shares. EBIT was increased by improved cost-efficiency.

Atria Scandinavia's net sales for July-September totalled €93.3 million comopared to €99.7 million in 2013.

At comparable exchange rates, net sales fell by 2.0 per cent year-on-year.

Atria said that this decrease was affected by the slow growth of the total market and stronger market position of private labels. EBIT amounted to €5.9 million compared to €4.7 million in 2013.

Atria said that the growth of EBIT was due to better cost-efficiency and the stable raw material prices.

Atria Russia's net sales for July-September reached €29.2 million compared to 2013’s €32.0million.

However, at a comparable exchange rate, net sales grew by 0.6 per cent year-on-year.

The weak growth of comparable net sales was due to the decline in consumers' purchasing power and in retail sales, together with the discontinuation of primary production at the end of last year.

Inflation in food prices is currently about 10 per cent according to Rosstat.

EBIT saw a loss of €1.5 million compared to a drop loss of €16.4 million in 2013.

EBIT for the comparative period includes €15.4 million of non-recurring costs.

The prices of meat raw materials continued to rise in July-September. Atria Russia was not able to fully pass on the increased costs to sales prices.

Atria Baltic's net sales for July-September totalled €9.0 million compared to 2013’s €8.5 million. EBIT amounted to €0.1 million (€0.3 million).

Atria's own brands sold well during the summer barbecue season. EBIT was weakened by tight price competition.

Atria Group's net sales for January-September totalled €1,062.7 million compared to €1,050.4 million for the first nine months of 2013.

Net sales grew by €12.3 million year-on-year.

EBIT reacehd to €22.0 million compared to €9.1 million in 2013. EBIT without non-recurring items was €22.6 million compared to €24.4 million for the same period last year.

Atria lowered its EBIT forecast in April. The company expects the 2014 EBIT without non-recurring items to be clearly lower than the previous year's EBIT of €37.0 million.

According to the previously published EBIT forecast, the Group's EBIT for 2014 was estimated to be higher than €37.0 million.

Net sales are expected to grow in 2014. The EBIT forecast was adjusted due to the difficult conditions in the Finnish and Russian meat markets.

Atria's share of the January-September income from joint ventures and associates was €5.4 million (€1.9 million). Atria's joint venture, the Finnish Meat Research Institute LTK Co-operative, sold its subsidiary Maustepalvelu Oy. For the deal, LTK realised a profit that increased Atria's share in LTK's net assets.

Atria acquired Saarioinen Oy's procurement, slaughtering and cutting operations for beef, pork and chicken. The operations were consolidated into Atria as of 1 February 2014. The purchase price was €29.2 million. In addition, €4.2 million was paid for producer receivables.

Investments during the period reached €55.3 million.

The company expects the 2014 EBIT without non-recurring items to be lower than the previous year's EBIT of €37.0 million. Net sales are expected to grow in 2014.

 

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