AarhusKarlshamns Reports Improvements in Q4

Date:18 Feb 2010

Type:Business News

Source:Food Ingredients First

Sector:Fats & Oils

Summary:Record operating profit was achieved in the fourth quarter for the Group, Food Ingredients and Technical Products & Feed. Chocolate & Confectionery Fats saw further improvements since the third quarter.

18 Feb 2010 --- Oils and fats supplier AarhusKarlshamns (AAK) has reported record operating profit, up 36 percent to SEK 289 million (212) (US$40 million) in the fourth quarter of 2009. Cash flow generated from operating activities continued to be high at SEK 750 million (379). Earnings per share were SEK 3.85 (4.54); including the IAS39 adjustment and nonrecurring items, earnings per share were SEK 4.53 (-1.58). Net sales amounted to SEK 3,788 million (4,764). Record operating profit was achieved in the fourth quarter for the Group, Food Ingredients and Technical Products & Feed. Chocolate & Confectionery Fats saw further improvements since the third quarter.

Further, during the quarter, AAK has benefited from the first part of savings from the rationalisation programme. Costs in the fourth quarter 2008 were relatively high due to the start up of the Danish plant. Cash flow from operating activities continued the positive development reported during the third quarter, reaching SEK 750 million (379).

For the full year, operating profit reached SEK 827 million (851). The company recorded additional preliminary insurance compensation in the second quarter of SEK 70 million, which is not included in the operating profit of SEK 827 million. There was strong cash flow from operating activities at SEK 2,265 million (17). Net sales amounted to SEK 15,884 million (17,207).

Operating profit and cash flow developed strongly despite the recession. Net debt decreased by about SEK 2 billion. The strengthened balance sheet provides the foundation for continued development and acceleration of the specialisation strategy.

During 2009 there were significant changes in consumer behaviours as a consequence of the global recession. In the market there is a clear trend towards substituting more expensive products with less expensive vegetable oil solutions. Further, private labels are gaining market shares. This aligns very well with the AAK Group strategy and enhances growth opportunities based on value-added solutions.

“The strengthened balance sheet provides the foundation for continued development and acceleration of the specialisation strategy,” says Group CEO - Jerker Hartwall in his comments to the report. Arne Frank has been appointed as President and CEO for AAK as from April 6, 2010.