Having divested all its overseas operations over the past 12 months, Finland-based poultry meat company HKScan is focusing on building on improvements in sales and profitability reported for the first quarter of its fiscal year.
For the first quarter of 2024, HKScan reports improvements in net sales and operating profit compared with the same period of last year.
Following a series of divestments over the past 12 months, the company’s financial reporting covers its continuing operations, which are confined to its original home base, Finland.
At EUR228.7 million (US$246 million), net sales for the January-March period were 4.9% higher than in the first quarter of 2023. While strikes in the last month of the reporting period adversely impacted exports, the firm attributes the rise in sales to strong consumer demand as well as successful commercial activity.
Compared with a negative figure of EUR400,000 for Earnings Before Interest and Taxes (EBIT) in the first quarter of last year, a positive figure of EUR1.2 million is reported for the quarter just ended.
Comparable EBIT for the group’s continuing operations was also turned around to EUR1.4 million.
HKScan reports that its costs remained high in the first three months of this year. However, consumer demand in Finland was stronger than in the comparative period, and the group was able to strengthen its position in its home market.
Commenting on the results, CEO Juha Ruohola welcomed the positive developments in the company’s profitability.
“We have achieved this in cooperation with our own staff as well as our contract farmers and other partners,” he said. “Our profitability is not satisfactory. In order to achieve our targeted profit development and improve profitability, we will continue to tightly manage costs, improve production efficiency, optimize our product portfolio in the face of changing consumer demand, and carry out our commercial efforts.”
Recent business divestments have strengthened HKScan’s balance sheet, he said, and the proceeds have been used to repay the company's loans.
“As a result of the significant structural and operational measures taken, our future looks brighter,” according to Ruohola.
Looking ahead to the rest of the financial year, HKScan forecasts continued year-on-year improvement in EBIT for its continuing operations.
More on HKScan
With annual slaughterings of 95 million poultry, HKScan is among the largest poultry producers in Europe, according to WATTPoultry.com’s Top Poultry Companies survey. The figure includes chickens, turkeys, and ducks, and It was compiled before the recent sale of the group’s overseas businesses.
Over the past 12 months, HKScan has announced a number of significant changes to its business.
In September of 2023, final agreement was reached for the sale of its Baltic business in Estonia and Latvia to the Maag Group of Estonia.
Agreement was reached in December to sell its Swedish subsidiary, HKScan Sweden AB, to Swedish Lantmännen. The sale was completed in March of this year, and the firm has been renamed Scan Sverige.
Following the divestment of its Swedish business, HKScan announced it was changing its name to HK Foods Plc in April of this year. The change is expected to come into effect later this month, after the new name has been officially registered.
Earlier this month, HKScan sold its Danish operation to Plukon Food Group. The purchase of HKScan Denmark A/S was Netherlands-based Plukon’s fourth acquisition already this year.
