HKScan turnaround plan making progress
For the half-year (January to June), net sales were €841.2m, down from €844.5m in the same period of 2018. EBIT was down €21.2m and the EBIT margin was -2.5%, an improvement on the previous year.
Any financial improvements made were attributed to the continuing recovery of its Finnish poultry business, operational efficiency improvements at all home markets as well as group-wide savings in both personnel and administrative costs. Its Finnish Rauma poultry processing facility had previously been the source of problems for HKScan with production halted however this has since been remedied.
Tero Hemmilä, HKScan’s CEO said: “HKScan’s second-quarter comparable result was still slightly negative but improved clearly from the comparison period. The result is not on a satisfactory level, but the direction during the first half of the year has been correct.”
Earlier this year, HKScan announced plans to improve its cost-efficiency and to assess the way of working in its Categories & Concepts function. The related statutory negotiations were started among white-collar employees and management in all HKScan’s operating countries. HKScan’s headcount is expected to be reduced by 183. The actions will result in annual savings of €10m which are expected to materialise on a phased basis starting in Q4 2019, gradually taking full effect at the beginning of 2020.
He said that progress on exports to China has been slow but African Swine Fever incidents in the region has helped matters. “Pork export from Finland to China proceeded according to plan and the targets for the first year of export have been met, being though still marginal on Group figures. The strong reduction of pork production in China caused by African Swine Fever has increased the demand of pork in the global market and has a positive impact on the price level of export sales. The exceptional pork situation in China also affects, to an extent, the demand and price level of other meat categories.”
