Apetit’s profitability was lower than last year – Grain Trade still unprofitable, Food Solutions and Oilseed Products improved their operating profit
Apetit Plc, Half-Year Report on 20 August 2021 at 8:30 a.m.
Apetit Plc's Half-Year Report 1 January - 30 June 2021
Apetit’s profitability was lower than last year – Grain Trade still unprofitable, Food Solutions and Oilseed Products improved their operating profit
April–June 2021, continuing operations*
- Net sales amounted to EUR 68.7 (73.7) million
- EBITDA was EUR 0.3 (1.6) million
- Operating profit was EUR -1.2 (0.1) million
January–June 2021, continuing operations*
- Net sales amounted to EUR 136.4 (138.8) million
- EBITDA was EUR 2.8 (3.3) million
- Operating profit was EUR -0.3 (0.3) million
*) Apetit’s continuing operations are Food Solutions, Oilseed Products and Grain Trade. In addition to the three reporting segments (Food Solutions, Oilseed Products, Grain Trade), Apetit will report Group Functions, consisting of the expenses related to Group management, strategic projects and listing on the stock exchange that are not allocated to the three business segments.
The information in this report is unaudited. The figures in brackets refer to the corresponding period in 2020, and the comparison period means the corresponding period in the previous year, unless otherwise stated.
PROFIT GUIDANCE FOR 2021 UNCHANGED
The full-year operating profit from continuing operations is expected to improve year-on-year (EUR 3.9 million in 2020).
Esa Mäki, CEO:
“Apetit Group’s net sales declined and profitability decreased year-on-year due to the continued weakening of the Grain Trade segment’s result. Oilseed Products continued its strong profit performance in the second quarter. The result of Food Solutions improved year-on-year but was slightly in the negative due to the seasonality of operations. On a positive note, the profit performance of Apetit’s processing businesses was good for the entire first half of the year.
In Food Solutions, retail demand remained strong in the second quarter, with sales being boosted particularly by the mixed vegetable products launched in the spring and targeted at the barbecue season. A clear recovery from the effects of the corona pandemic has also been seen in the Food service channel. It is particularly pleasing that profitability improved substantially in all sales channels.
In May, we announced we will invest approximately EUR 2 million in a new frozen pizza production line at our Pudasjärvi plant. The investment covers the modernisation of the entire production equipment in the existing building. The investment will bring about significant improvements to Apetit’s range of frozen pizzas, particularly with regard to taste and texture: we want to offer Finnish consumers even more delicious pizza made from ingredients with as high a degree of domestic sourcing as possible. The redesigned range of pizzas will be launched next year.
Retail sales in Sweden continued to grow in line with our targets throughout the first half of the year, and we have recently also seen a slight recovery in the Swedish professional food service segment. The value of food exports grew by a third and amounted to approximately EUR 2.5 million in January–June.
The demand for oilseed products remained strong in all product groups in the second quarter, with end product prices increasing substantially due to higher raw material costs. Towards the end of the review period, demand in the food service channel also returned to the pre-pandemic level. The excellent result was attributable to demand as well as the strong refining margin.
Our focus in the development of our rapeseed ingredient has been on the commercialisation of the product development project. We will begin test production of the ingredient at a subcontractor’s premises in August–September. The produced rapeseed ingredient will be delivered later in the year for production testing by customers as well as to be sold. In the initial stage, the end product use of the ingredient will be focused on plant protein products and gluten-free baked goods. Our aim is to start commercial scale production in 2022.
The Kantvik bioenergy plant was commissioned at the beginning of August. It significantly reduces the Group’s CO2 emissions and energy costs. Milling rapeseed to produce vegetable oil is the Group’s most energy-intensive production process.
The result of Grain Trade was negatively affected by the difficult market conditions in the international wheat trade and the unsuccessful response to unpredictable market changes. After a peak in supply caused by the export tariffs imposed by Russia, the international demand for wheat was very weak in March–April. Consequently, the large wheat reserves in the Baltic countries were delivered in their entirety to customers in May–June at a significant loss. In addition, Finnish grain exports in the first half of the year were lower than usual due to the previous year’s small harvest.
Exceptional arrangements related to the COVID-19 pandemic continue in Apetit Group. We are actively monitoring the situation and will react to any changes. Throughout the pandemic, we have successfully achieved our goal of ensuring the health and safety of our employees and ensuring undisrupted operations throughout the food supply chain.
The current cultivation season has been primarily characterised by hot and dry weather conditions. Autumn oilseed plants have nevertheless thrived. The total area under cultivation for domestic oilseed plants this year grew by nearly a third compared to last year and the harvest outlook is positive. Apetit’s systematic efforts to increase the cultivation area of oilseed plants and interest in oilseed plant cultivation are continuing: the contract farming of oilseed plants has nearly doubled from last year. The domestic grain harvest is expected to be weaker than average. In the Baltic countries, the harvest is expected to be fair, but substantially lower than the record harvest last year. The harvest of outdoor-grown vegetables, excluding peas, is expected to be moderate.
Corporate responsibility is an integral aspect of Apetit’s business throughout the value chain, from field to fork. As an example of this, we continuously develop our existing products as well as new products that respond to growing consumer demand for sustainable food choices. This autumn, we will strengthen our local fish strategy by expanding our product range with Baltic Sea fish fingers made from delicious herring caught in the Baltic Sea. Increasing the consumption of domestic fish has a significant impact on the health of Finland’s inland waters and the Baltic Sea: for example, the roach we used in 2020 saw us remove phosphorus from lakes in an amount that would otherwise have led to the growth of 60,000 bucketfuls of blue-green algae. Our sustainable food choices are meaningful.”
KEY FIGURES
| EUR million | 4–6 2021 | 4–6 2020 | Change | 1–6 2021 | 1–6 2020 | Change | 1–12 2020 |
| Continuing operations | |||||||
| Net sales | 68.7 | 73.7 | -7% | 136.4 | 138.8 | -2% | 292.9 |
| EBITDA | 0.3 | 1.6 | 2.8 | 3.3 | 10.1 | ||
| Operating profit | -1.2 | 0.1 | -0.3 | 0.3 | 3.9 | ||
| Share of profit of associated company Sucros | -0.2 | -0.3 | -0.6 | -0.7 | 0.3 | ||
| Profit for the period | -1.2 | -0.3 | -1.1 | -0.8 | 3.1 | ||
| Earnings per share, EUR | -0.19 | -0.05 | -0.17 | -0.13 | 0.49 | ||
| Working capital at the end of the period | 25.5 | 22.1 | 48.4 | ||||
| Investment | 3.4 | 3.3 | 7.8 | ||||
| Group (incl. discontinued operations) | |||||||
| Net sales | 68.7 | 73.7 | -7% | 136.4 | 138.9 | -2% | 293.0 |
| EBITDA | 0.3 | 1.7 | 2.8 | 3.4 | 10.2 | ||
| Operating profit | -1.2 | 0.2 | -0.3 | 0.4 | 4.1 | ||
| Profit for the period | -1.2 | -0.2 | -1.1 | -0.7 | 3.2 | ||
| Earnings per share, EUR | -0.19 | -0.04 | -0.17 | -0.12 | 0.52 | ||
| Equity per share, EUR | 14.48 | 14.65 | 15.26 | ||||
| ROCE % | 2.9 | 1.6 | 3.3 | ||||
| Net cash flow from operating activities | 24.4 | 45.9 | 26.8 | ||||
| Equity ratio, % | 76.3 | 68.8 | 66.5 | ||||
| Gearing, % | 3.1 | -4.7 | 21.7 |
WEBCAST
A news conference (in Finnish) will be held as a live webcast today on 20 August 2021 at 10:00. The news conference can be followed at apetit.fi/for-investors. The presentation material and a recording of the webcast will be available on the company’s website after the news conference.
Apetit Plc
Esa Mäki, CEO, Apetit Plc, tel. +358 10 402 2100
Apetit is a food industry company firmly rooted in Finnish primary production. Our operations are based on a unique and sustainable value chain: we create well-being with vegetables by offering 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 Plc's shares are listed on Nasdaq Helsinki. In 2020, Apetit Group's net sales were EUR 293 million.
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