For Finland-based meat and poultry company Atria PLC, market conditions over the last quarter contributed to an overall improvement in earnings despite a dip in net sales.
For the latest quarter (June to September 2023), Atria PLC is reporting a 17.7% year-on-year improvement in margin for its overall business.
According to the fiscal report just published, Earnings Before Interest and Taxes (EBIT) amounted to EUR19.3 million (US$20.5 million) for the period. While net sales were 2% lower year-on-year at EUR429.5 million, adjusted EBIT was 4.5%, which compares with 3.7% one year previously.
For its Finnish business, Atria attributes a dip in sales to weaker feed sales and exports, while currency changes and shrinking retail sales were the main issues for the Swedish operation.
In more positive developments, the Group’s company covering Denmark and Estonia achieved a significant improvement in EBIT. In Finland, this metric was strengthened by higher selling prices and a more favorable sales structure.
Atria reports stronger performance for year so far
For the January-September period, Atria PLC is reporting a 5.5% year-on-year increase in consolidated net sales to more than EUR1.31 billion. Meanwhile, Group EBIT was around EUR7.9 million higher at EUR40.2 million.
On sales volumes through retail and foodservice channels were described as “stable,” Atria reports that selling prices were higher than the previous year. The Group notes that the general economic situation has helped drive particularly retail sales of its diverse product range.
Recent business developments
According to the Group’s CEO Kai Gyllström, two of the firm’s investments continue to make progress as planned. Construction and commissioning continue at its new poultry plant in Nurmo, Finland. In Sweden, the facility in Sköllersta has been completed. Although both projects were subject to extra costs, these are described as “relatively moderate.”
Of the near EUR430-million net sales by the Group over the quarter just ended, EUR322.6 million was generated by its Finnish business. This compared with EUR327.2 million for the same period of 2022.
An increase of EUR6.3 million in EBIT to EUR19.0 million is attributed mainly to higher sales prices through both retail and foodservice customers.
For Atria Sweden, net sales for the June-September quarter slipped from EUR92.7 million last year to EUR80.5 million. EBIT for this business was reported as zero, compared with EUR3.4 million in the third quarter of 2022.
These developments in sales and EBIT were attributed to a combination of changes in consumer behavior arising from strong food prices inflation in the country, as well as the discontinuation of a number of the company’s products following the closure of its plant in Malmö.
At EUR32.0 million, Atria’s smallest business covering Denmark and Estonia achieved a near 10% year-on-year increase in net sales for the third quarter. Over the same period, EBIT more than doubled to EUR1.5 million.
Gyllström remarked that net sales for the quarter increased by more than 20% in Estonia, while a focus on efficiency in Denmark helped improve profitability despite disappointing sales.
More on Atria PLC
With annual slaughterings of 45 million head, Atria PLC is among the largest 50 poultry producers in Europe, according to WATTPoultry.com’s Top Poultry Companies survey.
For the first six months of the current fiscal year, the Group reported that investment in its production plants was holding back some measures of reported profit, despite increases in net sales compared with the same period of the previous year.
Last month, Atria issued a profit warning, stating that the company is raising its adjusted earnings before interest and taxes (EBIT) guideline for 2023.
A few days later, the group announced that Jennifer Paatelainen had been appointed vice president of Human Resources.
