Swedish vegetable oils company AAK has reported a new record high operating profit and continued organic volume growth, with Food Ingredients reporting a very strong quarter and continued improvement in Chocolate and Confectionery Fats.
Swedish vegetable oils company AAK has reported a new record high operating profit and continued organic volume growth. Food Ingredients reported a very strong quarter due to a further improved product mix, continued organic volume growth and a relatively moderate fourth quarter last year. Chocolate and Confectionery Fats continued to improve but, as expected, at a slightly slower pace after some very strong quarters.Operating profit, excluding acquisition costs of SEK 15 million, reached SEK 388 million (343 excluding net positive, non-recurring items of SEK 16 million), an improvement of 13% compared to the corresponding quarter in 2014. Operating profit at fixed foreign exchange rates, and adjusted for acquisition costs and non-recurring items, improved by 7%. During the quarter AAK said it has continued to invest in the organisation by adding more resources in sales and customer innovation, particularly in growth markets. Food Ingredients continued to grow organically and reported a 2% volume increase. The picture between the segments was, however, very variable. The Bakery segment had a challenging quarter, particularly in Europe. Other regions, such as the US, continued to show good organic volume growth. The Dairy segment continued the strong trend from the third quarter and reported double-digit organic volume growth despite the low prices on milk fat. Europe and the US showed particularly strong growth in this segment. Infant Nutrition speciality volumes, comprising InFat business in Advanced Lipids AB, a joint venture of AAK and Enzymotec, continued the organic growth trend from the last two quarters. For the full year though, AAK said it sees a modest organic volume growth after the extraordinary first quarter in 2014. Infant Nutrition product range Akonino continued to show good organic volume growth.Food Service reported low organic volume growth, however with continued good growth in the UK. Market conditions in the US were more challenging. Commodity products showed organic volume growth for the fifth consecutive quarter, but still from a very low level and bringing in some incremental profit. Total volumes for Chocolate & Confectionery Fats increased by 2%. The organic volume growth in the quarter was negative by 2%. The business area was, however, again negatively influenced by the deteriorating market conditions in Russia. After 24 months of deteriorating market conditions, Ukraine has during the fourth quarter stabilized at a low level. Total volumes excluding Russia were stable in the quarter. Low-end products continued to be under very strong competitive pressure, a trend since several quarters.