Scandi Standard today (24 August) booked higher first-half sales after a “strong” second quarter but the Nordic poultry producer saw issues in production and price pressure weigh on profits.

The company reported net sales of SEK2.89bn for the first six months of 2016, up 9% on a year earlier. Scandi Standard’s sales rose 12% or by 15% at constant exchange rates in the second quarter, which MD and CEO Leif Bergvall Hansen said was “significantly above the growth in the market”.

Hansen said: “The increase referred mainly to additional distribution in Norway in combination with a strong recovery of the Norwegian market, strong growth in Sweden in chilled products and a significant number of new listings in Finland.”

First-half operating income was up 1% at SEK141.5m over the same period a year ago. However, Scandi Standard’s adjusted operating income fell 1% to SEK142.6m as the company lapped a half when it booked higher transaction costs.

In the second quarter, Scandi Standard’s adjusted operating income dropped 4% to SEK74.3m. The company’s adjusted operating income rose in Sweden and Norway. However, operating losses widened during the quarter and half in Finland, amid costs for handling iinefficiencies and bottlenecks as production volumes were increased to meet demand from new and extended customer contracts. The group’s adjusted operating income fell in Denmark due to pressure on prices.

In Sweden, Hansen said there had been additional costs to meet strong demand “and to maintain service levels” while the group rebuilt its Valla production facility, near Katrineholm, to boost production. Scandi said earlier this year that the facility slaughters around 50 million chickens annually. The rebuilding of Valla is expected to be completed in the third quarter of this year.

Scandi Standard’s first-half net income fell 7% to SEK81.1m amid an increase in finance expenses. 

In April, the group said it had acquired a majority stake in Danish peer Sodams Oko Fjerkræslagteri.