HKScan has warned that it could book a drop in full-year profits after weakness in its Swedish business weighed on first-quarter results.

The company said there is “a risk” the group’s operating profit for 2012 will be down on 2011 levels. As recently as last month, the Finnish meat group was predicting year-on-year EBIT gains during the fiscal year.

HKSkan said operating profit dropped from EUR1.4m in the first quarter of last year to a loss of EUR0.6m in the three months to 31 March.

Sales in the period rose 2.3% to EUR606.1m, but gains were offset by a lower operating profit margin, which fell from 2.2% to 1.8%.

Net losses increased to EUR5.2m, up from EUR2.7m in the year-ago period.

The company said its performance in markets including Finland, the Baltics, Denmark and Poland was “according to plan”. However, in Sweden the firm’s results were hit by increasing volumes sold under private label and higher sales of imports. As a result, HKScan racked up losses totalling EUR5.5m in the market.

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In April, the company announced the launch of a two-year programme that aims to generate EUR20m in annal performance improvements. The company added that it would consider “long-term strategic alternatives” for its Swedish business, without providing further details.

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