Raisio, the company behind the Benecol range of products, has warned profits from its food business may miss targets this year due to rising input costs.
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The note of caution came as Raisio posted a turnaround in the company’s performance in 2007 compared to 2006.
The Finnish firm posted underlying operating profit of EUR9.9m (US$14.4m) for 2007, a year after reporting a loss of EUR2.4m. Turnover rose 4.8% to EUR421.9m, Raisio said.
The company said its revenue is expected to rise this year but cautioned that, while profits will rise, they may not meet its target of 5% growth.
Raisio said rising commodity costs would weigh on earnings but added that it was looking to sure up the future supply of raw materials with direct contracts with farmers.
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By GlobalData“It is becoming increasingly important to future success to ensure the availability of raw materials at the right time, as well as their quality and competitive pricing,” Raisio said.
“Controlling the volatility of raw material prices is the most significant factor affecting Raisio’s profitability in 2008.”
CEO Matti Rihko added: “As a forerunner in ecological, plant-based nutrition and one of Europe’s most innovative grain companies, Raisio is excellently positioned to face the change in the food industry. Essential in this change is the impact that climate change will have on consumers’ choices.”
