May 2, 2006

HK Ruokatalo reports strong performance

HK Ruokatalo, a Finnish meat processor reported an 8.3 percent rise in revenue but poor profitability from its domestic operations.

The company performed well in the Baltics and Poland during the early part of the year. Net sales were up and earnings improved in both markets. The processed meat and convenience food business met their targets. However, profitability in the domestic fresh meat and the poultry business were below expectations.

The company's revenue for the first quarter of 2006 rose 8.3 percent to EUR213.5 million (US$269.2 million) with operating profits up 14 percent to EUR 6.6 (US$8.3 million).

In January, the company initiated a two-year programme to overhaul its industrial structure in Finland with regards to its processed meat production, logistics and fresh meat processing. These efforts were part of a programme to streamline operations and enhance cost competitiveness.

Several plants in Finland would be closed this year and the next that would bring about cost savings of EUR 15-20 million (US$18.9 million to US$25.3 million) for the company.

The company expects operating profit to improve during this year.