AAK reports all-time high profit

20 Jul 2016

An all-time high operating profit for a second quarter has been reported by AAK, with a continued double-digit year-on-year improvement for the group. Operating profit reached SEK 368 million, an improvement of 13%.

An all-time high operating profit for a second quarter has been reported by AAK, with a continued double-digit year-on-year improvement for the group.

Operating profit reached SEK 368 million (326 excluding non-recurring items), an improvement of 13% compared to the corresponding quarter in 2015. The currency translation impact was negative SEK 8 million (positive 39), mainly related to Food Ingredients.

Food Ingredients reported a strong quarter due to a further improved product mix and positive contributions from recent acquisitions. Chocolate & Confectionery Fats reported what the company described as an impressive quarter with high single-digit volume growth and a double-digit profit growth.

Total volumes continued to grow nicely, AAK said, and were up 6%. Organic volume growth was 1% (last year 4%) despite continued declining commodity volumes in Food Ingredients, where the growth in 2015 was exceptional. However, the demand for speciality and semi-speciality products was strong, generating organic volume growth of 5%..

Business area operating profit in Food Ingredients improved by 8%, reaching SEK 238 million. Chocolate & Confectionery Fats reported a result of SEK 146 million, an improvement of 26%.

Sales amounted to SEK 5,090 million, up from 4,954 million. The increase was mainly due to the positive product mix, the company said, partly offset by a negative currency translation impact of SEK 221 million, and the effect of acquisitions.

AAK said that the demand for speciality and semi-speciality products was good, generating organic volume growth of 3%. The picture between the different segments was mixed though. The Bakery segment had another challenging quarter globally. Volumes continued to decline, although at a slower pace than during the first quarter 2016. The Dairy segment continued the strong trend from the last three quarters and reported double-digit organic volume growth despite the very low prices on milk fat. North Latin America, the U.S. and the Nordics showed particularly strong growth in this segment. Infant Nutrition reported a strong volume development. This was driven by product range Akonino, which showed an “impressive” double-digit volume growth. Foodservice reported organic volume growth with good development particularly in the U.K. and the U.S. Volumes in the Nordics were stable. Commodity products showed a negative volume development after an exceptional growth in 2015.

“Based on AAK’s customer value propositions for health and reduced costs, and our customer product co-development and solutions approach, we continue to remain prudently optimistic about the future,” said Arne Frank Chief Executive Officer and President. “The main drivers are the continued positive underlying development in Food Ingredients and a continued improvement in Chocolate & Confectionery Fats.”