View all newsletters
Receive our newsletter - data, insights and analysis delivered to you
  1. News
September 14, 2017

Cloetta issues EBIT warning for Q3 as volumes dip on fire impact

Swedish confectionery group Cloetta said operating profit is expected to drop by as much as 22% in the third quarter due to lower volumes, increased raw material costs and exchange-rate effects.

By Simon Harvey

Swedish confectionery group Cloetta said operating profit is expected to drop by as much as 22% in the third quarter due to lower volumes, increased raw material costs and exchange-rate effects.

The Helsinki-listed company said today (14 September) adjusted EBIT is expected to be SEK40-50m (US$5-$6m) lower than the third quarter of 2016, when it booked adjusted profit of SEK224m. That would still be above the second-quarter result of SEK90m.      In a statement today, Cloetta said a fire at its plant in Turnhout, Belgium, had a bigger impact on production than was originally anticipated, which caused capacity constraints and lower volumes. The company did flag the fire in its second-quarter report.

President and CEO Henri de Sauvage-Nolting said the fire had knock-on effects on the company’s factory network as some production was outsourced and shift patterns were changed. The damaged production line in Turnhout will be replaced with a new one and is expected to be fully operational in the second quarter of 2018.

“In combination with higher raw material costs and negative exchange-rate differences, this has created some short-term challenges,” the CEO said. “However, this is in our own control and we will be able to solve them. To increase our profitability, we are also working on a cost-savings program that we intend to launch later this year.” 

Operating profit in the second quarter of 2017 declined from SEK148m in the corresponding period a year earlier, while net income turned to a SEK329m loss.

Related Companies

Topics in this article: ,
NEWSLETTER Sign up Tick the boxes of the newsletters you would like to receive. A weekly roundup of the latest news and analysis, sent every Friday. The industry's most comprehensive news and information delivered every other month.
I consent to GlobalData UK Limited collecting my details provided via this form in accordance with the Privacy Policy
SUBSCRIBED

THANK YOU

Thank you for subscribing to Just Food