However, reported operating profit, EBIT, for January–December was €55.5 million compared to €11.7 million in 2013.

Comparable EBIT excluding non-recurring items for the year was €12.4 million compared to €11.2 million.

For the fourth quarter, reported EBIT was €7.1 million compared to €10.9 million for the same period in the previous year.

Profit before taxes was €51.2 in 2014 million compared to €6.7 million in 2013 and €4.3 million compared to €7.7 million in the fourth quarter.

HKScan said it expects the operating profit (EBIT) excluding non-recurring items to improve from 2014, and anticipates the last quarter to be the strongest.
* The Board’s proposal for dividend is € 0.10 (0.10) per share. The Board proposes also an additional dividend of € 0.39 per share.

Hannu Kottonen, HKScan’s President and CEO, (pictured) said: “Last year saw excellent progress of HKScan’s strategic transformation process, which started at the end of 2012.

“We have streamlined our production set-up and simplified the Group structure to a great extent. The major strategic reviews and restructuring of our operational footprint have now been completed.

“Divestments and working capital improvement actions have strengthened the balance sheet substantially. As a result, HKScan’s financial position is now strong and financial expenses have decreased significantly. In addition, refinancing was supported by a bond issuance balancing the debt portfolio.

“The process of building One HKScan continued and was supported by the HKScan brand identity renewal. Company names were harmonized across all home markets. HKScan’s first Group brand, Flodins, was launched as an outcome of the brand strategy implementation. The Flodins brand complements the existing strong local brands.

“In general, the business environment in 2014 was turbulent. Markets and demand were weak throughout the whole year and led to tough sales price competition in all market areas. Sales volumes declined and the product mix followed consumer behaviour favouring lower price products.

“Russia’s embargo on EU pork imports was followed by a further ban on the agricultural goods from the west. The export bans resulted in global pork oversupply, which negatively impacted directly and especially our sales, profits and volumes, both on our home markets and in exports.

“Despite the challenging circumstances, the Group strategy implementation advanced well and I am pleased to recognise that our restructuring efforts and Group-wide operational work improved our financial results in our biggest market areas, Sweden and Finland. This played a key role in doubling year-on-year Group EBIT in the fourth quarter.

“The Baltics and Denmark in particular posted a disappointing result, with EBIT declining on the previous year.

“The Baltics suffered most from Russia’s embargo. Denmark continued to suffer from a structural imbalance, and the situation will remain challenging into 2015.

“In January 2015, we initiated statutory negotiations at the Skovsgaard plant regarding plans to centralise poultry slaughtering and cutting at the Vinderup facility in Denmark.

“The negotiations were concluded at the end of January. This is an important move toward building a profitable business structure in the future.

“The profit development programme for 2014 proceeded as planned, and we met our target of achieving an annual cost reduction exceeding €20 million and a reduction of over €50 million in net debt.

“The development programme was essential in mitigating sales and margin shortfalls. Work to improve our operational profit will continue as part of our continuous improvement efforts.

“We will continue building synergies between our home markets, focusing on improving productivity and investing in our top brands. Last autumn we initiated feasibility studies in preparation for major investment programmes in Finland and Estonia.

“The investments are targeted at consolidating the Group’s foothold in value-added product categories and growing segments. Our strategic target is profitable growth.”