HKScan reports quarterly loss, staff reductions
New operating model results elimination of 160 personnel
Meat and poultry company HKScan reported a loss before taxes of EUR8.2 million (US$8.9 million for the first quarter of 2107. The company’s net sales for the period were EUR 420.7 million (US$458.9 million).
“The group’s first quarter result remained dissatisfactory. This was mainly due to the declined sales margins of the processed category in Finland, and increased Group administration costs related to the new way of working renewal process,” said Jari Latvanen, HKScan’s president and CEO.
“During the first quarter, we managed to stabilize our pork meat raw material supply in Finland, which improved our margins. We also gained some market share in value terms, despite the overall market decline. In Sweden, where we have suffered from scarce availability of beef raw material, we saw some recovery in sales of beef and in the processed category. Moreover, our consistent work to improve efficiency of the Group’s Danish operations paid off in the form of reduced costs. Our Danish export business, which was challenging during the entire past year, showed signs of improvement. In the Baltics, red meat margins recovered after a longer period of unsatisfactory low margin levels.”
Latvanen said consumer confidence is strengthening on HKScan’s home markets, and the Asian export business is showing a positive trend.
“A new export license from Finland to Japan, growing business in Hong Kong, as well as a rising interest in our elementary antibiotic-free grown pork and poultry are good examples of the opportunities we systematically continue to seize,” he said.
New operating model
HKScan announced a new leadership team in February and a new operating model. Changes in the operating model will result in a staff reduction of 160 people. The company says the new operating model will be in place on June 1.
“During the past months, we have been conducting an evaluation of HKScan’s strategic market presence, ways of working and the cornerstones of our future success. We are now on the final stretch of the path to defining our renewed strategic direction and we aim to communicate and implement it from the third quarter onwards,” Latvanen said. “The new strategic direction and operating model will together secure us a sharper focus on consumers and customers. It will also give us the leading role in the food value chain as one, unified company. By putting all these measures into effect, we will strive to improve our recipe to being more competitive and consequently more profitable.”