Scandi Standard saw its first-half profits slide despite booking higher sales as the European meat group continued to feel the impact of the bird-flu outbreak in its key markets.

Adjusted operating income, which takes into account non-comparable items, dropped 9% in the first six months to SEK129m (US$15.9) from a year earlier, the Stockholm-based company said in a statement today (23 August). The same metric fell 6% to SEK70m in the second quarter from the corresponding three months in 2016, with the bird-flu impact taking out SEK11m in Sweden and SEK2m in Denmark.

Reported operating income declined 15% to SEK120.3m.

Net income slid 22% to SEK63m during the half and was 14% lower from the year-earlier quarter.

Noting the strains felt from the outbreak, the statement noted: “As a new case of bird flu was detected in a Swedish commercial flock in the second quarter, trade restrictions for Swedish poultry products are expected to remain for some time, with accompanying adverse effects on operating income. However, as restrictions for Danish products have been lifted, we expect the bird-flu effects for the group to decline to about SEK3-5m in the third quarter and to gradually decline thereafter.”

First-half revenue rose 11% to SEK3.2bn and was up 8% on a quarterly basis, with Scandi pointing to growth across all its geographic areas. Adjusted EBITDA was down 1% at SEK237m (a margin of 7.4% versus 8.3%)  in the six months through June and was flat for the quarter.

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The company counts its key markets as Sweden, Denmark, Norway and Finland and has a total of five plants spread across the Nordic region. Amid capacity constraints, Scandi said in today’s statement it’s considering long-term expansion options.

With respect to Sweden, along with bird flu, the business was also hit by weaker-than-normal demand for retail chilled products because of greater attention paid to campylobacter levels. Efforts to reduce those levels took SEK17.6m off operating income, but the company expects demand for chilled products to “gradually improve”.

In June, Scandi Standard struck an agreement to buy Manor Farm in a cash-and-shares deal that valued Ireland’s largest chicken processor at about EUR94m (US$105.2m at the time). Scandi Standard said today it expects to complete the acquisition on 28 August.