HKFoods Oyj (HEL:HKFOODS)
Finland flag Finland · Delayed Price · Currency is EUR
1.640
-0.004 (-0.24%)
Sep 10, 2026, 6:29 PM EET
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Earnings Call: Q1 2021

May 6, 2021

Speaker 1

HKScan's profit improvement continued in the review period. We have now improved our comparable EBIT for 10 consecutive quarters. Our profit improvement was nearly EUR 3 million, and comparable EBIT for the review period was the best first quarter result in six years. Our rolling 12 month comparable EBIT already rose to nearly EUR 20 million. Our profit improvement was clear, taking especially into account that in the comparison period, the pandemic situation as a whole did not yet have a significant impact on our business, while in the review period, the pandemic situation was difficult. This was especially seen in food service sales, which were significantly down from the comparison period. Our net sales were at the comparison period level. It was especially nice to see the clear increase in sales of our own branded products.

We were also successful in processed products and meal components, and in this way, we were able to add value to our raw material base in our home markets. This in turn reduced the need for exports to balance the use of our raw material base. Finland and Sweden clearly improved their performance. In Denmark, our strategy to focus on value-added products proceeded as planned. However, Denmark's EBIT weakened due to the continuing avian flu situation in Denmark, resulting industry-wide export ban to countries outside the EU. In the Baltics, the difficult pandemic situation in Estonia weakened our EBIT. As a result, our production volumes fell slightly down from the planned level and our operational costs increased. The low market prices of meat in Europe also created price pressure in the Baltics, especially in industrial sales.

During the review period, in addition to developing our operational business, we focused on strengthening the company's financial position. In February, we sold the land and the buildings of our Vantaa production unit. With this transaction, the amount of the company's interest-bearing debts decreased significantly. The lease agreement done in the same connection allows us to continue and develop our business in Vantaa for at least the next 20 years. For HKScan, it is important to be close to growing pool of consumers in the Finland's capital region, where new ways of food production and deliveries are constantly evolving. In the review period, we also extended our market-based bond financing. A significant part of the bond maturing in 2022 was renewed with a new loan of EUR 90 million that will mature in 2025.

The financial measures taken will now enable us to focus more comprehensively on operational development of our business and the company's strategic renewal in the coming years. In March, already earlier announced EUR 6 million investment in our Rauma poultry unit was carried out successfully. It was already known in advance that this kind of an investment is very demanding, and the pandemic situation created even more challenges to the implementation of the project. We, however, succeeded in this very well. I would like to thank everyone participating in this investment project for its successful implementation. This investment allows us to focus more comprehensively on utilizing the market potential with our evolving poultry product portfolio and with our strong Kariniemen brand. The responsibility is the basis of HKScan strategy and very high on top management's agenda.

We believe that the long-term and goal-oriented responsibility work will be seen in company's performance and business developing in the right direction. We are a company whose responsibly produced meat and other products are valued by consumers and whose products are an important part of diverse nutrition. In our responsibility work, our target is to be among the top in our industry. It has also been a pleasure to get recognition for our responsibility work from outside of the company. At HKScan, we have taken the pandemic very seriously from the beginning. We have been able to perform for over a year without having any significant disruption in our operations. Our service level has remained good throughout the pandemic. Our profit improvement has slowed down due to the situation. In our success having no significant disruption, the personnel have played a crucial role.

For this, I want to give my warmest thanks to all our employees. As a whole, the third year of the turnaround program started as planned and clearly better than in the comparison period. I'm pleased with the performance of the company and its entire personnel, taking into account the market situation that was even more difficult than expected due to the pandemic and animal diseases. Our outlook for 2021 remains unchanged. Company's management and all employees are ready to take HKScan towards a versatile food company that rewards its shareholders.