HKScan Adjusts Profits Forecast

by 5m Editor
5 August 2011, at 8:45am

FINLAND - Finnish meat processor, HKScan, has readjusted its profits forecast for the second quarter of the year, predicting it will fall short of estimates announced in at the time of the first quarter results.

In its first quarter interim report released on 6 May, HKScan Corporation stated that “the Group's full-year EBIT is expected to improve compared with 2010.”

Now the company says that according to current projections, as the international pork market remains difficult and the prices of raw materials and other production inputs remain high, EBIT will fall short of the level projected earlier.

HKScan has adjusted its earlier guidance to state that the group’s full-year EBIT is estimated to be lower than in 2010.

The company's earnings development in the early part of the year has been weaker than anticipated. The ongoing difficult conditions in the international pork market and the rising prices of raw materials and other production inputs are eroding business profitability in all markets, especially in Finland.

The overproduction of pork elsewhere in Europe has brought about increased pressure in HKScan's markets to import meat. Pork profitability in Finland is furthermore weakened by the low price level in export markets.

Sales prices will be increased in a bid to improve the poor profitability of pork. The company will also take steps to accomplish an orderly adjustment of pork production volumes in Finland. The initiated efficiency programmes in Finland and Sweden provide the foundation for more positive development in the Group’s competitiveness and profitability.

HKScan’s second quarter interim report will be released on 10 August.

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