Apetit is amending its profit guidance for 2014 and lowering its estimate of full-year net sales and operating profit excluding non-recurring items.
The outlook of the associated company Sucros for the rest of the year has deteriorated due to the still continuing decline in the market price of sugar. The outlook of the Food Business is also adversely affected by the persistent challenging market conditions combined with the poor profitability of fish products continuing for longer than previously expected. The effects of the profitability improvement programme for the fish product group in Finland, which was begun this year, are not expected to be evident in the profit performance until 2015. In Norway and Sweden, the price increases carried out as a result of higher raw material costs will not have an impact on the profit level until the end of 2014.
Apetit will continue to implement the long-term profitability programmes launched this year in its Food Business in Finland, affecting fresh products as well as fish products. The programmes are expected to have a positive effect on the profitability of the Food Business as of 2015. The expected financial impact of these programmes will be presented later in the year.
The reference in the profit guidance to the resolution of the shareholder agreement dispute regarding Sucros was separately announced in the Stock Exchange Release of 19 August 2014.
New profit guidance for 2014:
The Apetit Group’s net sales will be affected particularly by the level of activity in the grain and oilseed markets and by changes in the price level of grains and oilseeds. As a result of the lower global market prices of grains, the Group’s net sales for this year are expected to decrease from the previous year’s level.
The Group’s full-year operating profit excluding non-recurring items is expected to be down significantly from the previous year. In the Food Business, the market conditions are expected to remain challenging and, furthermore, the profitability of fish products will be lower in 2014 than previously estimated. In comparison with the same period in 2013, the profitability of the Grains and Oilseeds Business has been positively influenced by the volume growth in the grain trade and in packaged vegetable oil products, and by the success in raw material procurement. Lower market prices for sugar are expected to weaken the result considerably for the associated company Sucros, which is in the Other Operations segment. The Group’s July-December operating profit excluding non-recurring items is expected to fall short of the previous year’s level.
In addition, the 2014 operating profit will be affected by non-recurring expenses in the form of Apetit’s expert costs and the process costs ordered to be paid by Apetit in relation to the shareholder agreement dispute regarding Sucros.
Previous profit guidance for 2014:
The Apetit Group’s net sales will be affected particularly by the level of activity in the grain and oilseed markets and by changes in the price level of grains and oilseeds. As a result of the lower global market prices of grains, the Group’s net sales for this year are expected to decrease or to be no higher than the previous year’s level.
The Group’s full-year operating profit excluding non-recurring items is expected to fall short of the previous year’s level. In the Food Business, the market conditions are expected to continue to be challenging. In comparison with the same period in 2013, the profitability of the Grains and Oilseeds Business has been positively influenced by the volume growth in the grain trade and in packaged vegetable oil products, and by the success in raw material procurement. In the Other Operations segment, lower market prices for sugar are expected to weaken the result for the associated company Sucros. The Group’s July-December operating profit excluding non-recurring items is expected to be no higher than the previous year’s level.
In addition, the outcome of the shareholder agreement dispute concerning Sucros may have a significant effect on the result for 2014. Apetit has received a notification from the Arbitral Tribunal that the Arbitral Award regarding the dispute is rendered to the Parties on Tuesday 19 August 2014, unless nothing unexpected will take place.
Apetit will publish its January-September Interim Report on 6 November 2014 at 8.30 am.
APETIT PLC
Veijo Meriläinen
CEO
Further information:
Veijo Meriläinen, CEO, tel. +358 10 402 00
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www.apetitgroup.fi