Scandi Standard reports improved margins for past year

For the fiscal year just ended, the Sweden-based chicken company reports a strong cash flow.

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Yurii Bukhanovskyi | Bigstock

Over the January-December 2023 period, net sales by Scandi Standard are reported at more than 13.0 billion Swedish krona (SEK; US$1.24 billion). This corresponds to a year-on-year increase of 4% when expressed at constant exchange rates.

At SEK457 million, operating income (Earnings Before Interest and Taxes; EBIT) was up by 57% compared with the previous financial year. This helped to drive up the EBIT margin from 2.4% in 2022 to 3.5% for the year just ended.

Based in Sweden, Scandi Standard also manufactures, markets, and sells a range of foods based on chicken in other Nordic countries and the Republic of Ireland. It is also has a table egg business in Norway. 

Fourth-quarter operational developments

At just over SEK3.01 billion, Scandi Standard’s net sales for the October-December quarter were 3% lower than in the corresponding period of 2022 (at constant exchange rates). However, the company reports an increase in EBIT for the quarter from SEK99 million to SEK105 million. These figures led to an improvement in EBIT margin from 3.2% to 3.5%

In the fourth quarter, there was a 5% year-on-year improvement in sales to SEK2.28 billion for the firm’s Ready-to-Cook (RTC) business, and EBIT more than doubled to SEK77 million. These developments were attributed to a higher sales volumes, lower input costs, and improved profitability for the operation in Denmark.

This performance contrasted with the Ready-to-Eat (RTE) segment, where falls in net sales and operating income were blamed on reduced capacity utilization at the company’s plant in Farre, Denmark. This resulted from the termination of a contract with a key customer, and Scandi Standard reports working to restore its order book.

For the group’s third business segment, Other/Ingredients, a return to normalized pricing was behind a significant drop in EBIT to SEK10 million for the October-December quarter.

Commenting on these results, Scandi Standard’s Managing Director and CEO Jonas TunestĂĄl highlighted that operational and financial measures made over the past year have led to higher earnings. These improvements continued into the fourth quarter, which has previously been the weakest period for the company due to the holidays.

Over recent months, he noted, input prices have trended downwards, and markets have become less volatile. The prolonged period of implementing substantial price increases to counteract cost inflation appears to have passed, he added.

Among the company’s business developments during the last quarter of the fiscal year was an agreement by its Finnish subsidiary Naapurin Maalaiskana Oy to acquire Landeli Oy Group's RTE business in Honkajoki. Scandi Standard saw the acquisition as an opportunity to add further capabilities, differentiate its business, and strengthen the brand. 

More on Scandi Standard

With annual slaughterings of more than 177 million birds, Scandi Standard is easily among the largest 20 poultry companies in Europe, according to the WATTPoultry’s Top Poultry Companies survey.

The firm’s web site states that Scandi Standard is the leading producer of chicken-based foods in the Nordic region and Ireland.

It manufactures, markets, and sells RTE, chilled, and frozen products. Among its brands are KronfĂĄgel, Danpo, Den Stolte Hane, Manor Farm, and Naapurin Maalaiskana. In Norway, the company also produces and sells eggs. Its total workforce is around 3,200.

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