Apetit Plc's Half-Year Financial Report 1 January–30 June 2018: A weak harvest lowered Grain Trade volumes and Group result - strategic measures lay foundations for future
Apetit Plc's Half-Year Financial Report 1 January–30 June 2018: A weak harvest lowered Grain Trade volumes and Group result - strategic measures lay foundations for future
Apetit Plc, Half-Year Financial Report, 16 August 2018 at 8:30
This release is a summary of Apetit’s Half-Year Financial Report for the January-June 2018. The complete report is attached to this release as a pdf file and it is also available on the company’s website at apetitgroup.fi/for-investors.
April–June, continuing operations*
- Net sales from continuing operations were EUR 72.8 (76.8) million
- Operational EBITDA was EUR 0.1 (0.8) million
- Operational EBIT was EUR -1.4 (-0.5) million
January–June, continuing operations*
- Net sales from continuing operations were EUR 132.5 (150.8) million
- Operational EBITDA was EUR 0.1 (1.2) million
- Operational EBIT was EUR -2.8 (-1.5) million
Key events during the period
- Apetit invests EUR 9.7 million in a new patty and ball production line in Säkylä.
- Apetit invests EUR 3.7 million in the construction of a bioenergy plant in conjunction with the Avena Kantvik Oy rapeseed oil milling plant in Kirkkonummi.
- Avena Nordic Grain Oy and Viljelijän Berner joined their purchasing and sales organisations in production input and grain trade under a new operating model based on partnership.
- Apetit Vegepops Porkkana-mango was chosen as the Finnish Food of the Year 2018
*Continuing operations include Food Solutions, Oilseed Products and the Grain Trade.
The information has not been audited. The figures in parentheses are the equivalent figures for the same period in 2017, and the comparison period means the corresponding period in the previous year, unless otherwise stated.
REVISED (3 August 2018) PROFIT GUIDANCE FOR 2018
The Group’s full-year operational EBIT from continuing operations is expected to fall short of the 2017 level (2017: EUR 1.3 million). Due to the seasonal nature of the Group’s operations, most of the annual profit is accrued in the second half of the year. Sales volumes and the profit outlook for 2018 are burdened by the weak harvest of 2017 and the poor harvest outlook of the current year.
Juha Vanhainen, CEO:
“Apetit has continued with the measures of the strategy announced in March 2018 in its focus areas, which are internationalisation, renewal and efficiency improvement. These measures reinforce Apetit’s position as number one in vegetables and help in building a foundation for the further development of the business.
In June, we announced that we invest nearly EUR 10 million in a new patty and ball production line at our Säkylä plant. The new line will double our production capacity, meet current demand and enable us to produce new products for the Finnish and international markets.
As a part of the project to improve efficiency, Apetit is building a bioenergy plant in conjunction with the Avena Kantvik Oy rapeseed oil milling plant in Kirkkonummi. The bioenergy plant will replace the current energy solution that uses non-renewable fuels and will significantly reduce the carbon dioxide emissions of the entire Group.
Apetit participated in the share issue of the food business development company Foodwest which took place in May-June. Apetit’s holding in the company will promote our strategic goals to focus on product development and to renew and lead the way in vegetable-based diets. One result of the work we have done to date is the nomination of Apetit Vegepops Porkkana-mango as the Finnish Food of the Year 2018 in May. We also continued work on a project to develop a rapeseed ingredient in order to develop a new ingredient with high nutritional content for the international food market.
The goals of renewal and continuous development of operations took concrete form when Apetit’s subsidiary Avena Nordic Grain Oy and Viljelijän Berner joined their purchasing and sales organisations in production input and grain trade under a new operating model based on partnership. Business will be conducted under the name Viljelijän Avena Berner and it will offer Finnish farmers a one-stop-shop for production input and grain trade services.
Increasing the share of food sales abroad has proceeded according to plan. At the end of August Apetit will launch a new selection for the Swedish market called Free From which includes five patty and ball products. In Russia we are continuing work on reinforcing our position through local food product chains.
As expected, the aftermath of the weak harvest of 2017 continued in the first half of 2018 and substantially lowered grain trade volumes and consolidated net sales on the comparison period. The shrinking of the Sales Services network had a negative impact on the net sales of Food Solutions. Oilseed Products’ performance remained stable as volumes slightly grew on the comparison period. The low price of sugar on the global market led to a weaker result for the associated company Sucros.
During the spring Apetit has carried out adjustment measures to improve profitability, including personnel reductions and other cost saving measures. Their combined impact in 2018 will be EUR 1.0 million and the annual total impact will be EUR 1.8 million.
It is likely that the 2018 harvest season will also be significantly worse than average, as was the 2017 season, which will have a negative impact on the Group’s profit-earning capacity in the second half of the year. The Finnish grain harvest is estimated to be the weakest of the 21st century, which will limit trade opportunities especially in exports. The harvest of field vegetables is also likely to be lower than usual.”
KEY FIGURES
| EUR million | 4-6 2018 | 4-6 2017 | Change | 1-6 2018 | 1-6 2017 | Change | 2017 |
| Continuing operations | |||||||
| Net sales | 72.8 | 76.8 | -5% | 132.5 | 150.8 | -12% | 311.8 |
| Operational EBITDA | 0.1 | 0.8 | 0.1 | 1.2 | 6.8 | ||
| Operational EBIT | -1.4 | -0.5 | -2.8 | -1.5 | 1.3 | ||
| Operating profit | -2.7 | -0.7 | -4.1 | -1.7 | 1.1 | ||
| Share of profit of associated company Sucros | -0.4 | 0.2 | -0.9 | -0.5 | 1.0 | ||
| Profit for the period | -2.8 | -0.5 | -4.5 | -2.0 | 2.9 | ||
| Earnings per share, EUR | -0.45 | -0.08 | -0.72 | -0.32 | 0.46 | ||
| Working capital, at end of period | 28.5 | 25.3 | 30.0 | ||||
| Investment | 1.8 | 2.5 | 5.2 | ||||
| Group (incl. discontinued operations during comparison period) | |||||||
| Earnings per share, EUR | -0.45 | -0.27 | -0.72 | -0.56 | -0.10 | ||
| Equity per share, EUR | 16.75 | 17.58 | 18.10 | ||||
| Return on capital employed (ROCE), % | 0.9% | 1.9% | 2.4% | ||||
| Net cash flow from operating activities | -0.1 | 23.1 | 20.0 | ||||
| Equity ratio | -76.1% | 71.1% | 72.6% | ||||
| Gearing | -4.7% | -1.5% | -9.6% |
NEWS CONFERENCE AND WEBCAST
A news conference (in Finnish) will be held today at 10:00 a.m. at Apetit’s office, Sörnäistenkatu 1 A, Helsinki. A live webcast of the news conference can be followed via apetitgroup.fi/for-investors. The presentation material and a recording of the webcast will be available after the news conference on the company’s website.
Apetit Plc
For further information, please contact:
Juha Vanhainen, CEO, Apetit Plc, tel. +358 10 402 2100
Apetit is number one in vegetables. It is a food industry company firmly rooted in Finnish primary production. We create well-being with vegetables by offering healthy and tasty food solutions that make daily life easier. We also produce high-quality vegetable oils and rapeseed expellers for feeding stuff, and trade grain on the international markets. Apetit seeks to lead the way in vegetable-based food solutions. Apetit Plc’s shares are listed on Nasdaq Helsinki. In 2017, the company’s net sales were EUR 312 million and it had approximately 640 employees. Read more at apetitgroup.fi.
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