Raisio reports across-the-board quarterly profits

By Shane Starling

- Last updated on GMT

Raisio has notched a 20 per cent increase turnover for the first
quarter of the year as its ingredients and food divisions have
surged.

Quarterly sales leapt from €96.8m in the corresponding period last year to €118.9m as its food-based business turned a profit for the first time in years, making all of its operating sectors profitable. Its ingredients business, which revolves around its plant stanol ester Benecol ingredient, is expected to increase turnover and improve profitability from the previous year. Net profit came in at €4.2m compared to 1.2m in 2007, with a further €4.2m banked from the withdrawal from joint ventures with the giant Swedish food cooperative, Lantmannen. "The improvement in operating profits resulted from the implementation of flexible pricing systems, growth and cost-effective operations,"​ the company said. "Raisio's forecast for the Group's outlook in 2008 is unchanged. Raisio's turnover is expected to increase and the operating result from continuing operations in 2008, excluding one-off items, is expected to improve from the previous year."Forecasts ​The company said all divisions expected to continue turning profits although its prediction of five per cent growth for the food division "will probably not be achieved due to increased marketing inputs, new product launches and preparations for entry into new markets." ​The animal feed division would also face "pressure on profitability"."Raisio's financial performance in the first quarter indicates that the measures the company took last year to improve profitability were the right ones and that their impact is now beginning to show,"​ said Raisio chief executive officer, Matti Rihko. "What most improved the operating result were the divestment of unprofitable operations, enhancement of business model, cost-effectiveness and new, flexible pricing systems. After a long, unprofitable period the food division posted a profitable result, which speaks of a healthier cost structure and a new approach in business operations." Green credentials ​ He noted several factors as potential threats to the food supply including rising living standards in Asia, climate change, increasing production of biofuels, urbanisation and contamination. "The food industry must develop ecological and healthy food without the consumer having to compromise on flavour or convenience,"​ Rihko said. Raisio was one of the first companies in Europe to add a carbon footprint label to its oat product Elovena. "In the future, CO2 emissions labels that show the environmental impact of the product will become increasingly more common on food packages alongside price and nutritional information labels,"​ Rihko said. Ingredients division ​ In its recently delivered annual report Raiso noted the prosperity of its ingredients division that had benefited from a restructuring and reigning in of licensing arrangements. While it only accounts for nine per cent of the Group's turnover, the division saw earnings rise from €7.8m to €9.5m even as sales fell from €49.7m to €44.9m as the effects of restructuring kicked in. This included regaining regional rights to its plant stanol ester compound from its partners McNeil Nutritionals​ and Cilag GmbH International in the USA, Great Britain, France, Ireland, Belgium, the Netherlands and Luxembourg. It also regained the rights to the Benecol brand in France and the USA in the product categories in which McNeil and Cilag are not currently active. Raisio produces the Benecol plant stanol, cholesterol-lowering​ ingredient as well as Benecol cholesterol-lowering food range it sells in more than 30 countries. The range includes margarines, spreads, cream cheese-style spreads, yoghurts, yoghurt drinks, cereals, milk and soy drinks, pasta and olive oil. Raisio had sales of €422m in 2007. The Finnish-based firm employs 1100 people in nine countries. It specialises in functional foods ingredients, feeds and malts.

Related topics: Polyphenols, Cardiovascular health

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