Although net sales for Atria Plc contracted by 1.6% year-on-year for the first six months of the 2024 fiscal year, profitability over the period was significantly improved.
According to the group’s latest results for the January-June period just published, net sales amounted to EUR871.2 million (US$952.2 million), while consolidated Earnings Before Interest and Taxes (EBIT) was up by EUR5.5 million to EUR26.4 million. At 3.0%, EBIT margin as a percentage of net sales was six percentage points higher than in the same period of 2023.
The drop in net sales was attributed to lower feed sales prices and reduced food-service sales in the firm’s home market, Finland.
All of the group’s operations — located in Finland, Denmark, Estonia, and Sweden — delivered a positive EBIT, driven by improvements in sales structure, and operational and organizational efficiencies. In the comparable period, the company reported that its EBIT had been constrained by one-off items.
Commissioning of the firm’s poultry processing plant in Nurmo, Finland and its optimization have proceeded as scheduled, Atria reports. Its plant in Sahalahti has been closed, and production transferred to Nurmo.
Positive developments continued in second quarter
“The good development of Atria’s result continued during the second quarter,” said CEO Kai Gyllström. “The results of all business areas improved in April-June compared with the previous year. We increased the profit forecast for 2024, thanks to good profit development and successful implementation of investments.”
Compared with the EUR457.2 million posted last year, net sales for the April-June period slipped to EUR454.3 million. Again, this was attributed to lower food-service and feed sales in Finland. However, sales in Sweden, and Denmark & Estonia were all higher year-on-year.
In terms of consolidated EBIT, all the operations performed better than the comparative period. They contributed to a year-on-year increase of more than EUR8 million for this measure to EUR18.4 million for the latest quarter. As a percentage of net sales, consolidated EBIT was reported at 4% — up from 2.2% in the comparative period.
Finland was Atria’s leading market in the three-month period, with net sales at EUR336.1 million — down from EUR345.4 million in the comparative period. Next comes Sweden, with an increase of EUR6.0 million to EUR93.8 million, while the Denmark & Estonia operation generated a 2.2% rise in this measure to EUR32.1 million. EBIT figures (without adjustments) were EUR17.1 million, EUR1.6 million, and EUR1.5 million, respectively.
Prospects for the rest of 2024
There is some uncertainty about the outlook for Atria Plc over the rest of the 2024 fiscal year, according to Gyllström.
He said that European food companies are facing the possibility of future restrictions on exports to China. Chinese authorities are reported to be considering an increase in tariffs on foods imported from Europe, or even a total ban, he said. For Atria, such a move would adversely impact exports of pork from its Finnish operation to China.
The CEO repeated an earlier announcement that the group’s adjusted EBIT for 2024 is expected to be higher than the EUR49.6 million reported for the last financial year.
However, uncertainties remain not only about the future of Chinese trade, but also on consumer spending and its impacts on the structure of the company’s sales.
More on Atria Plc
North European food company Atria Plc among the leading poultry companies in Europe. According to WATTPoultry.com’s Top Poultry Companies, the group's annual slaughterings are around 45 million birds.
The company has operations in Sweden, Denmark and Estonia, as well as its home market, Finland.
For the last full fiscal year, Atria reported year-on-year increases in sales to more than EUR1.75 billion, while adjusted EBIT was up only marginally. At that time, the company announced it would be focusing on different areas of the business in its four countries of operation over the following 12 months.
Ahead of the publication of its second-quarter and half-year results, Atria Plc announced that its profit in 2024 is likely to exceed the previous forecast.
