HKScan hit by struggles in Denmark

By Oscar Rousseau

- Last updated on GMT

Despite headwinds, HKScan's results mark a good year-on-year performance.
Despite headwinds, HKScan's results mark a good year-on-year performance.

Related tags: Baltic sea, Estonia, Meat, Beef, Lamb, Pork, Poultry

Poor performance in Denmark hit HKScan’s fourth quarter results, although it has defied the effects of the Russian meat ban, African Swine Fever and stiff competition to boost annual pre-tax profit.

HKScan Group improved its performance during 2015, and the comparable result was up on the previous year,​” said the Finnish meat manufacturer’s deputy CEO Aki Laiho, commenting on the release of full-year trading figures today (February 10).

Net sales, by region

Sweden - €841.9m
Finland - €801.6m
Denmark - €175.9m
Baltics – €173.6m

Looking at specific market areas, Sweden, Finland and the Baltics improved their comparable EBIT [pre-tax profit], but Denmark was down on the previous year. The balance sheet remained strong, and financial expenses were reduced. In the fourth quarter, the Group’s EBIT fell below the previous year, although the Baltics and Sweden showed improvement.​”

HKScan is one of the most prominent suppliers of meat in Scandinavia, producing a range of pork, poultry, beef and lamb products, processed meats and convenience foods. It exports to to more than 50 countries but, like the majority of Europe, has struggled in the wake of Russia’s meat ban, China’s economic slowdown and outbreaks of animal disease.

Price competition
 
The business environment remained challenging during 2015, and political and economic uncertainty continued globally,​” Laiho added. “The meat industry witnessed ever-tougher price competition in food retail, and the Russian ban on meat imports continued. In the Baltics, African Swine Fewer began to spread in Estonia at the end of July.

Despite the headwind, we resolutely initiated the implementation of our profitable growth strategy. At the beginning of October, the Board approved a new strategic green-field poultry production facility investment in Rauma, Finland. Demand-based export activities expanded, and culminated in the official inauguration of the Group’s Asian business operation in Hong Kong early January 2016.​"

Net sales top €1.98bn​ 

HKScan Group posted pre-tax profit of €55.5m ($62.5m) between January-December 2015, in a financial statement published on 10 February 2016. The result marks an improved year-on-year performance to results in 2015, with Sweden, Finland and the Baltic region all enjoying pre-tax profit growth. Net sales topped €1.98bn ($2.22bn).

Fourth quarter earnings fell by 0.6%, or €7.1m ($7.99m) between October and December 2015 with profits before tax slipping to €4.3m (-2.3%) in the same period.

Despite a poor last quarter, HKScan – bereft of a commander-in-chief after CEO Hannu Kottonen resigned​ in January – expects operating profits in 2016 to improve on the results made public today.

Related topics: Meat

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