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Atria's Results Start to Improve

30 July 2012, at 8:16am

FINLAND - Finnish pig meat processor Atria Group's net sales for the second quarter of 2012 totalled €333.3 million (€333.6 million), down by €-0.3 million compared to the corresponding period last year.

EBIT improved by €6.6 million year-on-year, amounting to €5.7 million (€-0.9 million). The results for the comparative period include net €0.6 million of non-recurring profit.

Atria Finland's net sales for the second quarter of 2012 totalled €204.6 million (€203.0 million), showing growth of €1.6 million year-on-year. The €7.8 million EBIT (€2.6 million) was €5.2 million higher than the EBIT for the corresponding period last year. This increase was due to an improved sales structure, implemented efficiency improvement measures and higher sales prices.

Atria Scandinavia's net sales for the second quarter of 2012 totalled €95.0 million (€95.8 million), representing a fall of €0.8 million year-on-year.

In the local currency, net sales decreased by 1.7 per cent year-on-year.

Increase in the raw material costs weighed down EBIT to €1.8 million (€2.7 million), which is €0.9 million lower than in the comparative period.

Atria Russia's net sales for the second quarter of 2012 amounted to €31.3 million (€32.5 million).

In the local currency, net sales decreased by 3.5 per cent year-on-year.

EBIT was €-2.0 million (€-5.6 million), showing an improvement of €3.6 million over the comparative period. This increase was due to implemented efficiency improvement measures and the raising of sales prices.

Atria Baltic's Q2/2012 net sales amounted to €9.1 million (€9.1 million).

EBIT was €-0.4 million (€0.2 million), which is €0.6 million weaker than in the same period last year. The results for the comparative period contain €0.6 million of non-recurring profit.

Atria revamped its strategy during the review period. The new strategy focuses on strengthening core business and improving its profitability in all business areas. The aim is to improve Atria's position especially in cold cuts and other meat products in all business areas. This requires the revising of category management, improvement of productivity and strengthening of customer focus throughout the Group.

Olle Horm was appointed Executive Vice President of Atria Baltic and a member of Atria Group's Management Team. He will assume his position by 15 August 2012 and report to Juha Gröhn, CEO, Atria Plc. Atria Baltic's current Executive Vice President, Rauno Väisänen, will return to Atria Finland.

Atria Group's net sales for the first half of 2012 totalled €641.8 million (€637.6 million), showing growth of €4.2 million compared to the corresponding period last year.

EBIT improved by €11.0 million year-on-year, amounting to €5.8 million (€-5.2 million). The results for the comparative period include net €0.1 million of non-recurring profit.

Atria Finland's net sales for the first half of 2012 totalled €393.0 million (€389.3 million), up by €3.7 million year-on-year. The €13.0 million EBIT (€3.2 million) was €9.8 million higher than the EBIT for the corresponding period last year. This increase was due to an improved sales structure, implemented efficiency improvement measures and higher sales prices.

Atria Scandinavia's net sales for the first half of 2012 totalled €184.5 million (€183.6 million), representing an increase of €0.9 million year-on-year.

In the local currency, net sales were at the same level as last year. Increase in the raw material costs weighed down EBIT to €1.9 million (€5.0 million), which is €3.1 million lower than in the comparative period.

Atria Russia's net sales for the first half of 2012 amounted to €59.6 million (€60.8 million). In the local currency, net sales decreased by 3.0 per cent year-on-year. EBIT was €-5.3 million (€-11.1 million), showing an improvement of €5.8 million over the comparative period. This increase was due to implemented efficiency improvement measures, price increases and the streamlining of the product range.

Atria Baltic's net sales for the first half of 2012 totalled €17.0 million (€17.3 million), representing a fall of €0.3 million year-on-year. EBIT was €-0.9 million (€0.0 million), which is €0.9 million weaker than in the same period last year.

The results for the comparative period contain €0.9 million of non-recurring profit. The slow development was caused by the increase in raw material prices, which could not be fully transferred to sales prices.

Due to an increase in investments, the Group's free cash flow during the review period (operating cash flow - cash flow from investments) was €-9.6 million (€-8.7 million). Interest-bearing net liabilities came to €419.8 million, showing an increase of €17.0 million since the turn of the year.

During the review period, a programme was launched to improve the profitability of Atria Scandinavia's production of meat products. Atria is investing approximately €4.7 million in new production equipment for the Malmö plant.

The manufacture of ham products and the slicing of cold cuts will be transferred from the Halmstad plant to the Malmö plant. The Halmstad plant will be closed down after the production transfer. The programme is expected to generate annual cost savings of approximately €1.5 million.

The savings will begin to materialise in 2012 and will be fully effective from the beginning of 2013.

During the review period, Atria Russia launched a programme aimed at improving production efficiency at the Sinyavino and Gorelovo plants. These measures are expected to generate annual cost savings of around €2.0 million, which will be fully realised from the beginning of 2013. Meat products are now produced at the centralised Sinyavino and Gorelovo plants in St Petersburg.

Atria Plc's Board of Directors decided to terminate the share incentive plan for Atria Group's key personnel and replace it with a new long-term reward programme. The share incentive plan will no longer be applied in 2012.

The copmany said that the Group's EBIT was €8.0 million in 2011, but a considerably higher EBIT is anticipated for 2012 and some growth in net sales is expected for 2012.