For the first quarter of the fiscal year, net sales amounted to EUR457.6 million (US$500 million), reports HKScan. This represents a year-on-year increase of 15.6% for the January-March period.
According to Group CEO Juha Ruohola, the improvement was supported by higher sales prices in the quarter, and driven by rising costs experienced last year.
In terms of costs for energy and logistics, there has been a levelling-off from a peak in the autumn/fall of 2022. However, expenditure on these items continues to be higher than in the comparable period 12 months previously.
For its continuing operations, HKScan reports an improving trend in profitability for its continuing operations. From a negative figure of EUR4.4 million 12 months previously, the latest figure reported for Earnings Before Interest and Taxes (EBIT) is a deficit of EUR100,000.
This improved profitability Ruohola attributed to the introduction of production efficiencies, and cost-saving measures.
“Despite the improved performance, the profitability of HKScan’s continuing operations is not satisfactory,” he said.
As reported earlier this year, the CEO again stressed that raising profitability is among the company’s top priorities in 2023.
Performance by markets, business unit
In all the group’s continuing home markets — Finland, Sweden (including Poland), and Denmark — net sales rose year-on-year. Reported figures for the last quarter were around EUR217 million, EUR180 million, and EUR61 million, respectively.
For the Finnish business unit, comparable EBIT improved to around EUR100,000 from a negative EUR1.2 million in the first quarter of 2022. In Denmark, this metric rose from EUR500,000 to EUR1.2 million over the same period. In contrast, EBIT for the Swedish business unit was approximately EUR400,000 lower for the quarter just ended at a negative EUR200,000.
Of the group’s overall net sales, 47% were generated in Finland, 40% in Sweden (and Poland), and 13% in Denmark.
Across all sales channels, HKScan also reports higher net sales year-on-year. In the quarter just ended, 73% were generated through retail, and 15% through food service. Industry and exports accounted equally for the remaining 12%
In terms of category, Beef & Pork continued to account for 40% of the group’s overall net sales in the first quarter of 2023. Meanwhile, Poultry gained one percentage point at 24%, and the “Charcuterie, Sausage and Bacon” category dropped by the same amount to 22%. Making up the remaining 14% was “Meals and Meal Components.”
Significant developments highlighted by Ruohola were continued growth in value-added products in Denmark. In the first quarter, ready-to-eat chicken sales were up by 44%. Finland and Sweden also achieved higher retail sales.
Progress in divestment of Baltic business
The regulatory process continues for the sale of HKScan’s Baltic business, according to the company's latest report.
In Latvia, the regulatory authority has approved the transaction, and this procedure is ongoing in Estonia. Closure is expected by the end of September this year.
HKScan agreed the sale of its Baltic business to Estonian AS Maag Grupp in December of 2022.
Recent developments at HKScan
Founded more than 110 years ago, HKScan is a northern European food company, according to the group’s web site.
Based in Turku, Finland, its home markets also include Sweden, Poland, and Denmark. With a workforce of around 5,400, net sales from its continuing operations amounted to more than EUR1.8 billion in the last financial year.
Among the firm’s leading brands are HK, Kariniemen, Via, Scan, Pärsons, and Rose.
In March of this year, the board of directors appointed Juha Ruohola as CEO of HKScan Corporation.
By increasing automation at its poultry processing plant in Rauma, Finland, the group announced in April that it was reducing its workforce at that facility.
With annual slaughterings of around 93 million birds, HKScan is among the top 40 poultry companies in Europe, according to the WATTPoultry.com’s Top Poultry Companies survey.