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HKScan Reports Modest Recovery in Sales

08 November 2013

FINLAND - Finnish meat company HKScan Group reports that net sales were EUR 1 838.0 (1 840.7) million in January–September, and EUR 623.5 (612.2) million in the third quarter.

During January to September, HKScan reports that EBIT was EUR 15.3 (21.2) million, and the EBIT margin was 0.8 (1.1) per cent. Comparable EBIT excluding non-recurring items for the period was EUR 18.8 (21.2) million, and the corresponding EBIT margin was 1.0 (1.1) per cent.

For the third quarter, reported EBIT was EUR 10.5 (15.4) million, and the EBIT margin was 1.7 (2.5) per cent. Comparable EBIT excluding non-recurring items for the quarter was EUR 11.0 (15.4) million, and the corresponding EBIT margin was 1.8 (2.5) per cent.

Cash flow before debt service was EUR 13.8 (26.1) million in January–September, and EUR 14.6 (23.7) million in the third quarter.

Profit/loss before taxes was EUR 1.1 (-1.2) million in January–September, and EUR 5.9 (7.3) million in the third quarter.

EPS was EUR 0.06 (0.03) in January–September, and EUR 0.12 (0.11) in the third quarter.

Net financial expenses were EUR -16.7 (-24.4) million in January–September, and EUR -5.3 (-8.5) million in the third quarter.

Net debt was EUR 445.3 (474.1) million, and net gearing was 111.0 (122.2) per cent in January–September.

Outlook for 2013 (amended on 25 September): The comparable EBIT for 2013, excluding non-recurring items, will fall short of 2012.

Hannu Kottonen, CEO of HKScan, said: "Demand in both consumer and away-from-home businesses remained at a lower level compared to the previous year. Price competition was tough. In general, consumers’ purchasing behaviour has shifted towards lower priced-products. The increase in animal purchasing prices has stopped or turned towards a decrease as grain and feed costs have declined.

"Net sales for the third quarter increased compared to the same period in the previous year. Even though the Group EBIT decreased during the quarter compared to 2012, the market area Baltics recovered and showed improvement. Of the other market areas, Sweden also continued to improve, though from a low level, and Poland kept up its good performance.

"The good development in Sweden, Poland and the Baltics could not compensate for the negative impact of declined sales margins in Finland and Denmark. In addition, the margins were also hit due to extraordinary actions taken to decrease excess frozen stock in other market areas except Poland and the Baltics. However, despite the poor margin development, the Group’s profit before taxes was ahead of the previous year as net financial expenses kept decreasing.

"Another positive development was the development programme launched in 2012, which has met the targets for reducing the annualised costs by more than EUR 20 million and a significant reduction in capital employed. The improvements will reach their full effect from the beginning of 2014. At the end of September, a new development programme was launched. The new programme will run until the end of 2014 and it targets an annual cost reduction exceeding EUR 20 million and a reduction of over EUR 50 million in net debt. The main objectives are building a unified Group, materialising Group synergies further, and building demand-driven management of operations.

"The Group was further strengthened by founding a Group Marketing function to enhance long-term group-level brand management and offering development. Product innovation exchange between the home markets is to be increased further."

TheCattleSite News Desk



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