HKScan, the Finnish meat processor, has slowed its earnings decline in the face of falling sales and pressure on pricing.
During the third quarter, HKScan booked net earnings of EUR5.6m (US$7m), down from EUR7m in the comparable period of last year. However, this represents a slowing of the group’s earnings decline – which fell to EUR3.3m from EUR9.8m in the first nine months of this year.
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The group was able to report improved operating earnings, with third-quarter EBIT rising to EUR7.3m, up from EUR7m last year.
CEO Hannu Kottonen said “good headway” was made in inventory and working capital management. However, he also stressed the challenging market in which HKScan is operating.
“All markets remained weak in the third quarter. Tough sales price competition and a further decline in sales volumes continued. However, the decline in value was less than in volume, and we managed to increase our market share especially in the branded products.”
Sales were down in the three month period, dropping to EUR498.4m, compared to EUR526.9m last year.
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By GlobalDataThe company is restructuring its operations to improve efficiency while also focusing on developing its higher margin brands. Kottonen said the firm continued to progress its strategic adgenda in the quarter.
“The development program for 2014 proceeded with good performance. Production restructuring was advancing on schedule in Sweden, which involved the discontinuation of pig slaughtering in Skara. Good progress is also being made in group-wide brand strategy implementation as well as in technology and operations footprint enhancement.”
