Lantmännen’s result for the first four months of 2014, after net financial items and adjusted for items affecting comparability, amounts to 38 MSEK – compared to 15 MSEK for the same time period last year. The Food Sector increases its result significantly, and all businesses in the sector continue to develop well. The result in the Energy Sector is also higher than the previous year, while the result in the Machinery Sector is at about the same level. The Agriculture Sector’s result is lower than last year.
“Lantmännen’s result for the first four months is slightly higher than last year. The development in the Food Sector reflects the many improvements that have been made in the business, while the Agriculture Sector has had a weak start to the year and needs to strengthen its competitiveness further,” says Per Olof Nyman, Lantmännen’s Group President and CEO.
All figures below refer to operating profit/loss, adjusted for items affecting comparability. Last year’s results are shown in brackets.
The Agriculture Sector’s result for the first four months amounts to -53 MSEK (-15). Demand in most categories has been weaker than the previous year, and seed sales have been significantly lower as a result of last year’s large autumn sowing and very small winter losses of crops.
During the spring, it was decided to make cost adjustments within Lantmännen Lantbruk’s white-collar organization: the workforce will be reduced by a total of 98 jobs, of which about half in Malmö.
“Competition in the agricultural market has intensified significantly for several years, and Lantmännen needs to continue strengthening its competitiveness. These cost adjustments are a necessary measure to take both in the short and long term, which unfortunately also has consequences for our employees,” says Per Olof Nyman.
To increase the availability and service level towards farmers, five more grain reception facilities will be opened in time for this year’s harvest: four of them in Karpalund, Staffanstorp, Vara and Vårgårda – in addition, Lantmännen’s big silo in Stockholm will be reopened in order to handle the anticipated large harvest north of Lake Mälaren.
The Machinery Sector’s operating profit for the first four months amounts to 3 MSEK (2). Tractor sales in Sweden have increased from last year’s low level: Lantmännen is driving the positive trend, with an increased total market share, and Valtra as continued market leader. The market for larger construction machinery remains cautious in Sweden.
The Energy Sector shows a slightly higher result than the previous year: -6 MSEK (-22). This is partly due to considerably lower amortization of the ethanol plant in Norrköping, as a result of the write-down made in connection with the final accounts of 2013. Despite continued cost reductions and productivity improvements in the plant in Norrköping, the current business situation remains challenging: the price of ethanol continues to be low, and it is uncertain when new political instruments for biofuels will come into effect.
The Food Sector’s operating profit for the first four months amounts to 146 MSEK (99). All businesses within the sector have improved their performance, and continue to develop in a positive manner. Cerealia continues to strengthen its position in the market, and has during the first four months continued its work on concept development as well as made a number of successful product launches. Gooh continues to develop well. Unibake shows a stable development, and the long-term efforts to improve competitiveness and growth continue as planned.
Lantmännen Real Estate’s operating profit is slightly higher than the previous year: 47 MSEK (43), mainly due to lower operating and heating costs during the winter, because of the mild weather.
“We continue to develop Lantmännen’s businesses throughout the entire value chain, from field to fork, in line with our strategy. Through closer collaboration with our owners and customers, we improve the conditions for viable and thriving Swedish agriculture, and a competitive and sustainable Swedish food production,” says Per Olof Nyman.
The full interim report is available at www.lantmannen.se/finance.