At first glance, the fiscal results for the January-March period just published by Atria Plc appear to show a dip in performance compared with the same period of 2023.
However, both sales and growth were exceptionally high in the comparative period last year, according to Kai Gyllström, CEO of the Finland-based company.
He commented that the results for the first quarter of 2024 are satisfactory, especially taking into consideration the challenging market conditions — particularly in the home market.
Overall, he described the levels of both net sales and operating profit as “very good,” and reported that Earnings Before Interest and Taxes (EBIT) was positive for all business areas.
At EUR416.8 million (US$447 million), Atria’s reported net sales for the first quarter of the fiscal year were down 2.6% year-on-year. This the firm attributed mainly to lower feed prices than in the comparative period, as well as cuts in exports and sales to Finland’s food service sector.
Overall, adjusted EBIT for the period is reported at EUR8.0 million. This is down from EUR10.9 million for the first quarter of 2023. As a result, EBIT margin dropped to 1.9% from 2.5%, respectively.
Before adjustment for comparability, all of Atria’s operations show a positive EBIT for the quarter, according to the CEO.
For Finland, this measure halved to EUR7.2 million, However, the Denmark & Estonia operation reversed a small loss the year before to EUR1.4 million, and Sweden reported turned a negative EUR3.3-million figure in the first quarter of 2023 into a zero EBIT.
First-quarter business developments
In Finland, the fall in grain prices compared with first quarter of last year has hit net sales in Atria’s home market, according to Gyllström. Furthermore, he said that strikes led to a slowdown in exports for several weeks, and weaker consumer purchasing power fed through into lower sales for the company through food service channels.
Overall, the situation in Finland has been further exacerbated by surplus supplies of red meat putting downward pressure on poultry and pork prices, general inflation, and the costs of commissioning the new poultry plant.
Atria strengthened its position in the Swedish poultry market, and food service sales there were up. Together with last year’s closure of the Malmö plant and shift of production to Sköllersta, Gyllström reported that performance in Sweden ended slightly positive.
While price competition in retail has been fierce, Atria’s business in Denmark achieved an increase in exports, as well as achieving improvements in efficiency. With good results and increased market share, the Estonian operation raised its net sales to become second in the market.
More on Atria Plc
With annual slaughterings of around 45 million chickens, Atria Plc is among the top 50 poultry companies in Europe, according to WATTPoultry.com’s Top Poultry Companies survey.
Based in Finland, the firm is one of the leading meat producers in its domestic market. With operations in both the poultry and pork sectors, it also has operations in Sweden, Denmark, and Estonia.
For the 2023 financial year, Atria Plc reported net sales of more than EUR1.75 billion, and adjusted EBIT of EUR49.6 million or 2.8%.
Other recent developments in Atria’s business noted by Gyllström include the recent acquisition of Swedish convenience food company Gooh.
Meanwhile, the acquisition of two pig farms in the south of the country has boosted the position of Atria Estonia in the home pork market.
The company has announced ambitious sustainability targets for a carbon-neutral food chain, Gyllström has confirmed.
He reports that progress has already been made on several projects, including the development of models to calculate progress towards the goal.
“Sustainability is at the heart of our strategy – and we will invest in it even more in the coming years,” the CEO concluded.
