Currency rates bite into Aarhus profits
Monday, felt the negative impact of currency rates and a sharp drop
in demand for bulk oils with results for the first six months of
2003 delivering a sharp drop in profits.
Aarhus Oliefabrik, baptised Aarhus United by the company's board on Monday, felt the negative impact of currency rates and a sharp drop in demand for bulk oils with results for the first six months of 2003 delivering a sharp drop in profits.
Operating profit (EBIT) fell by 46 per cent to DK51m (€6.87m), down from DK93m for the same period in 2002. Across the group - foodservice, healthcare and bulk oils - figures fell on 2002.
Hit by a downturn in the demand for bulk oils from the food industry, Aarhus United reported a 20 per cent fall in net margin for bulk oils from DK176m for the first six months of 2002 to DK141.7m in 2003.
But a ray of light could be found in the company's strategic focus area - chocolate and confectionery fats where sales and net margins developed 'according to expectations'. Figures revealed a marginal 0.2 per cent increase, up from DK193.7m for the first half of 2002 to DK194.2m for the same period in 2003. The company pointed out in a statement that net margins for the area were also knocked by declining exchange rates, resulting in a reduced net margin in Danish kroner for the first half of 2003.
Results for the speciality fats segment were boosted by the group's company Aarhus United Denmark that showed an improvement in net margin of just under DK10m to DK130.4 for the first six months of June 2003, compared to DK118.3m for the same period in 2002.
By contrast, Aarhus United USA saw a decline in volumes, with figures in speciality fats dropping from DK37.8m in 2002 to DK31.9m in 2003.
Wiping DK30 million from the 2003 accounts, Aarhus has pulled out of Maritex, the DNA salts manufacturer it jointly owns with diary company Tine Biomarin. Earlier in the year Aarhus United warned that because Maritex products were not representative of core business, the company had decided to stop the cash flow, or 'capital injection'.
Based on the decline in bulk oil sales, and on the condition that Maritex is carried on by new owners, the company adjusted expected results for the year downwards with pre-tax profits for 2003 now pitched at DK130-150m, falling from the previously announced result of DK160-180m.
