HKScan has lowered its full-year forecast

HKScan has lowered its full-year forecast

Finnish meat processor HKScan has reduced its forecast for its 2011 EBIT on the back of rising raw material costs and other high production input costs.

The company said today (26 July) that it now expects full-year EBIT to be lower than in 2010. It said that its earnings development in the early part of the year has been "weaker than anticipated".

The company initally forecast that full-year EBIT in 2011 would improve against 2010.

"The ongoing difficult conditions in the international pork market and the rising prices of raw materials and other production inputs are eroding business profitability in all markets, especially in Finland," the company said.

It also said that over-production of pork elsewhere in Europe led to increased pressure in HKScan's markets to import meat. "Pork profitability in Finland is furthermore weakened by the low price level in export markets," HKScan said. 

The company plans to increase prices to improve profitability and it will also take steps to accomplish an "orderly adjustment" of pork production volumes in Finland. It said that efficiency programmes in Finland and Sweden provide the foundation for more "positive development in the group's competitiveness and profitability".