November 7, 2013

 

 

Due to unprofitability, Atria, one of Finland's biggest meat processors, has decided to close its primary pork production in Russia as well as ending its production at its industrial production and logistics unit in Moscow by end of 2014.

 

Sales in Moscow will continue under the Campomos brand. The impairments resulting from the discontinuation of business operations were recognised for third quarter of 2013. Atria recognised impairments totalling €23.0 million (US$31 million), of which €15.4 million (US$21 million) was allocated to earnings before interests and taxes (EBIT).

 

Furthermore, €2.0 million (US$2.7 million) will be recognised as a provision for expenses related to the discontinuation of the aforementioned operations and will be allocated to the fourth quarter of 2013.

 

On October 2013, Atria lowered its EBIT forecast due to the non-recurring costs of its Russian business operations. The company expects the full-year EBIT for 2013 to be weaker than the previous year's EBIT, which amounted to €30.2 million (US$41 million). The company's EBIT without non-recurring items is expected to be higher than €30.2 million (US$41 million).

 

On October 28, 2013, the Finnish Competition and Consumer Authority (FCCA) gave its decision to commence phase two proceeding in a deal whereby Atria Plc acquires Saarioinen Oy's slaughtering, meat cutting and meat procurement operations.

 

Atria Group's net sales for July-September totalled €358.4 million (US$484 million) compared to €341.1 million (US$461 million) last year, up by €17.3 million (US$23.4 million) on-year. During the period under review, Atria recognised €23.0 million (US$31 million) of non-recurring costs for its Russian business operations, of this, €15.4 million (US$21 million) was allocated to EBIT.

 

Furthermore, an impairment of €0.9 million (US$1.2 million) was recognised for the Scandinavian business operations due to an asset held for sale. Consolidated EBIT weakened by €18.4 million (US$25 million) compared to the previous year, standing at negative €1.8 million (US$2.4 million) compared to €16.6 million (US$22.4 million) last year.

 

Atria Finland's net sales for July-September totalled €224.8 million (US$304 million), up by €19.7 million (US$26.6 million) on-year. EBIT was €9.8 million (US$13.2 million) compared to €12.5 million (US$17 million) last year, down by €2.7 million (US$3.6 million) on-year. During the period under review, net sales grew in all sales channels. Fiercer price competition in retail products at the end of the quarter, low export prices and the high prices of meat raw materials weighed down the EBIT.

 

Atria Scandinavia's net sales for July-September totalled €99.7 million (US$ 135 million) compared to €100.1 million (US$135 million) in 2012, down by €0.4 million (US$541,000) on-year. In the local currencies, net sales increased by 2.8% on-year. EBIT was €4.7 million (US$6.4 million) compared to €4.4 million (US$6 million) in 2012.

 

Atria Russia's net sales for July-September totalled €32.0 million (US$43 million) down from €33.9 million (US$46 million) last year. In the local currency, net sales increased by 2.8% on-year. EBIT showed a loss of €16.4 million (US$22 million) compared to a small profit of €0.6 million (US$811,000) for the same period in 2012.

 

EBIT without non-recurring costs for July-September was negative due to the poor profitability of primary production. It is estimated that the discontinuation of the unprofitable primary production and the Moscow-based production operations will generate annual cost savings of about €6 million (US$8.1 million) compared to 2013. The cost savings will be fully realised as of the beginning of 2015.

 

Atria Baltic's net sales for July-September totalled €8.5 million (US$11.5 million) compared to €8.4 million (US$11.4 million) in 2012. Efficiency improvement measures saw EBIT improved by €0.7 million (US$946,000) to €0.3 million (US$405,000) compared to a loss of €0.4 million (US$541,000) on-year. In the nine months to September, net sales reached €1,050.4 million (US$1.4 billion) compared to €982.9 million (US$1.3 billion), up by €67.5 million (US$91 million) on-year. During the nine months, Atria recognised €23.0 million (US$31.1 million) of non-recurring costs for its Russian business operations. Of this, €15.4 million (US$21 million) was allocated to EBIT.

 

In March, Atria issued a fixed-interest bond worth €50 million (US$67.6 million). The funds were used for refinancing and for the Group's general financing needs.