HKScan admits ‘unsatisfactory’ performance
The company reported a €4.3m (£3.3m) decline in operating income, compared to a loss of €0.8m (£0.6m) in the same period a year earlier.
The Nordic meat processor’s deputy chief financial officer, Aki Laiho, described the results as “unsatisfactory” and said performance was “weaker” than it was at the same period a year ago.
Danish demand
“The most significant factors were weakened by intense price competition and an oversupply of pork in Finland, and the scarcity of beef in Sweden, which led to high prices and lower volumes sales,” said Laiho in a statement on Wednesday 4 May.
He added that HKScan had benefited from the implementation of efficiency measures and steady sales across Denmark and the Baltic region. However, this was not enough to offset the company’s second successive Q1 decline.
HKScan also posted a pre-tax loss of €7.3m (£5.7m) for the first quarter of 2016, down from the €3.1m (£2.4m) on the previous year. Net sales came to €439.1m(£347.1m), down from €466m (£368.3m) when compared to the first quarter of 2015.
Bacon strength
Despite the weak result, HKScan still believes its operating profit will improve by the end of 2016 and has not changed its full-year financial projections.
The company also reported that its global strategy implementation programme was showing good signs of progression, citing recent investments it had made in Finland and Hong Kong.
HKScan also used its financial report to announce a €12m (£9.4m) investment to expand its bacon production facility in Świnoujście, Poland – one of HKScan’s most sophisticated facilities. This will be used to strengthen its position in the bacon segment and produce more value-added pork products.
The company has still not appointed a new CEO after previous incumbent Hannu Kottonen resigned in January 2016.
