Adverse exchange rate trends held back overall net sales for the latest quarter by Finland-based HKScan.
For the July-September period of 2023, net sales were just under EUR460 million (US$491 million). This compares with almost EUR468 million for the third quarter of last year. However, the firm reports that net sales grew by more than 2% at constant exchange rates.
While costs of production were generally similar to the comparable period, energy prices were down significantly, and some other costs were higher. On balance, Group operating profit (Earnings Before Interest and Taxes; EBIT) was reported at EUR13.3 million — up from EUR6.3 million year-on-year. Comparable EBIT for continuing operations was EUR12.8 million, which was an increase of EUR5.5 million.
According to CEO Juha Ruohola, a superior sales mix, more efficient production, and key cost savings contributed to this improvement in profitability.
He commented that consumer demand had remained the same as in the previous three-month period, leading to a higher sales volume through retail channels. While volumes through exports and industrial channels were lower than last year, those through food service were similar.
Of the group’s three current business units, those in Finland and Denmark reported higher figures for comparable EBIT year-on-year at EUR7.6 million and EUR1.1 million, respectively. For the Swedish operation, this metric slipped to EUR5.0 million.
Net sales, operating profit higher for January-September
For the first three quarters of the current fiscal year, HKScan reports a 5.4% increase in net sales to just over EUR1.39 billion.
At EUR21.7 million, Group operating profit was significantly higher than the EUR5.0 million reported for the same period a year ago.
Comparable EBIT from all continuing operations was reported at EUR19.3 million.
Following similar trends to those in the latest quarter, the Finnish and Danish business units contributed significantly more to the Group figure for this metric at EUR12.5 million and EUR3.4 million, while the figure dropped to EUR8.9 million in Sweden.
For greater financial flexibility, Ruohola stated that the Group constantly reviews the position of each business within HKScan.
More on HKScan Group
At the end of August this year, a transaction was closed that saw HKScan sell its Baltic business to AS Maag Grupp of Estonia.
According to the latest HKScan financial report, the fixed purchase price was EUR70 million. Of this, EUR55 million was transferred at the close of the transaction, and the balance will be paid over the next three years. The deal covered the group’s former Baltics business unit, which comprised operations in Estonia, Latvia, and Lithuania. Ruohola reported that the proceeds of the sale were used to repay the company's loans.
With annual slaughtering of 95 million poultry, HKScan is within the Top 30 poultry meat companies in Europe, according to WATTPoultry.com’s Top Poultry Companies survey.
One of the leading food companies in northern Europe, HKScan sells meat from chickens, turkeys, and ducks, as well as pork, beef, processed meats and convenience products. Among its brands are HK, Kariniemen, Via, Scan, Pärsons, and Rose. It has a workforce of 5,400.
A publicly listed company, HKScan reported net sales of over EUR1.8 billion by its continuing operations in the last financial year.
