Atria’s profits rise despite tough competition

Price competition at retail level across Atria’s home markets of Finland, Sweden, Estonia and Russia meant the company posted a 2% rise in pre-tax profits when compared to same period a year ago.

“The product groups currently facing the toughest price competition are meat products and pork in Finland and Estonia, as well as some meat-product segments in Scandinavia,​” said Juha Grohn, CEO of Atria in a financial statement. “During the spring, raw-material markets turned a corner as the price of pork began to rise in Europe. This change will increase the pressure for price rises among ready-made products."​

He added that “fierce price competition​” continued across its markets in the first six months of 2016.

Russian sales down​

The meat processor posted pre-tax profits of €4.5m, with overall net sales of €655.8m for the second half of the year. Six-month net sales for Atria dropped by more than 16% in Russia with a 0.5% slide in Scandinavian sales, but sales growth was recorded in Finland and the Baltics.

Growth was cooled by a drop in sales prices, upfront costs incurred through the launch of a pig cutting plant in Finland and investment in its Lagerbergs poultry acquisition. In June, but only confirmed now, Atria’s board of directors authorised a two-year €14m investment programme for the development of the Lagerbergs poultry operation in Sweden. “The aim is to make Lagerbergs a strong player on Nordic poultry markets by joining forces with Atria Finland’s poultry operations,​” said Grohn.

Surplus clear-out​

Atria has also confirmed its plans to acquire a 70% stake in Well-Beef Kaunismaa, a Finnish raw beef specialist operating in the foodservice sector. The deal still requires approval by competition authorities.

The company’s “most significant investment​” over the last six months is at its Nurmo pig cutting plant. Thanks to investment in production efficiency, the company is expecting annual running costs to drop by €8m per year.

Atria has also sold several sites deemed surplus to requirements: the Linnamae pig farm, the Vastse-Kuuste production plant in Estonia and a logistics unit in Gothenburg, Sweden.