The company said that it expects the merger to result in cost savings of €0.5m at a one-off cost of €0.1m, which will appear in its third quarter financial results.
“The aim of this is to combine the commodity market expertise of Avena Nordic Grain with Mildola's expertise in oil milling,” it said in a statement.
The company said that it plans to complete that intra-group merger in two stages, firstly transferring the administration, purchasing, sales and logistics functions of Mildola Oy to Avena Nordic Grain Oy, and then transferring Mildola Oy’s vegetable oils business to Avena Nordic Grain Oy towards the end of the year. Mildola Oy will continue its oil milling operation as a production unit of Avena, the company said.
Interim financial results
The move came as the Lannen Tehtaat Group released its interim financial report for the second quarter of 2009, recording a profit of €1.6m, excluding non-recurring items, down from €1.8m in the second quarter of 2008. Its second quarter earnings have improved on the first quarter, although H1 profits were still down on the first half of 2008.
The Group’s CEO Matti Karppinen said: “In all our operating segments the operating result was an improvement on the first-quarter figures. The year-on-year drop in consolidated net sales was mainly the result of the sharp fall in grain and oilseed market prices.”
Second quarter net sales of €65.5m were down 35 percent from €101m for the same period last year.
Karppinen added that the company’s balance sheet has seen a positive influence from increased sales of private label foods.
“In the prevailing economic circumstances, it is reassuring that our product range also includes basic food products that are currently attracting a great many consumers,” he said.