Finnish food producer Raisio, maker of Benecol products, has announced lower sales for the first half of 2005, but the company made a profit after losing money last year.
Turnover for the first half was €211.0m (US$258m), compared with €216.2m in the same period last year. The company’s result before tax was a profit of €8.8m, compared with a loss of €33.4m last year.
Turnover for the second quarter amounted to €112.9m, compared with €117.5m for continuing operations in Q2/2004. Operating result was €2.9m, compared with a loss of €27.8m or €4.7m profit excluding one-off items.
“Profit development in Q2 was weaker than that of the first quarter and the comparison period, although the performance of both Raisio Nutrition and Raisio Life Sciences was up from the comparison period,” said CEO Rabbe Klemets. “Raisio’s aim to renew itself and get on a growth track calls for considerable input in research and product development, business internationalisation and in sales and marketing. Unallocated additional strategic input in research and product development, as well as other group-level development expenses, led to a clear increase in the costs for other operations and reduced the group’s overall result.
“In Finland, retail trade was slow, which could also be seen in the demand for Raisio’s food products,” he said. “Sales were particularly weak in the potato and margarine products, whereas feed and vegetable oil operations continued in an upward direction.”
“In line with its strategy the company will continue to expand its home market to Russia” he said. “Raisio and Lännen Tehtaat have decided to start farm feed production in northwestern Russia by setting up a 50/50-owned joint venture. In Russia it is difficult to achieve sustainable competitive advantage without local production, of which weaker demand for imported malt and lower malt price levels are the most recent indications. This is why Raisio is also considering the option to start oat flake production in the country. In addition, the group is working on plans concerning the production and marketing of Benecol products in both Russia and the new EU Member States.”
“Raisio’s operations in Poland have seen good growth and profitability throughout the first part of the year,” he said. “The Benecol yoghurt drink produced by Obory, in which Raisio holds a minority share, and the coffee drinks produced by Emmi and sold in Poland by Raisio’s sales organisation were successfully launched on the market.”
“The sales of Benecol yoghurt drinks continued to increase in Europe, which, in turn, led to a growth in ingredients sale,” he said. “Positive development was also seen in the diagnostics business.”